4 step pricing to build products to scale & more
The Growth Letter #89
Welcome to the new members of the Growth Letter who have joined us since last Tuesday. I hope you are enjoying the content. Feel free to send me a message on LinkedIn with your ideas and thoughts.
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Today at a glance:
Article: Pricing Framework to Build Products With Scalable Unit Economics
Post: 10 ways to 10x your LinkedIn revenue
Media: Acting out of love and not fear
Tool: No more being overwhelmed with tasks
Framework: Gain a competitive edge with Bowman
There's plenty of writing on innovative pricing models and strategies; this framework will show you how to adapt these models to your product and your business.
You’ll learn how to layer pricing models and customise them for your users.
Matt Gray’s 10 ways to grow your LinkedIn revenue are simple and effective. This is a great guide for those on their LinkedIn journey or want to start.
It's super valuable and is available for free!
I have recently started my journey as a Chief Growth Officer of TaskDrive. One of the videos that inspired me to work for the company and its Founders was David Henzel’s video focusing on “Acting out of love and not fear”. It’s great to work with him, and I look forward to tackling my days out of love.
You can watch the video here.
Don’t be overwhelmed with tasks or projects. The Momentum App is the planner app that puts your goals, projects, and schedules all in one place. Momentum is built on 10+ years of experience helping people set goals, plan effectively, and finish their most important projects.
Bowman’s Strategy Clock framework is a deeper take on Porter’s 5 forces focusing on the competitive edge of a company. This framework will help you position yourself in the market based on the perceived value and pricing by the market. There are 8 positions in the clock below, each showing a different strategy to succeed in the market.
There are 8 positions in the clock below, each showing a different strategy to succeed in the market:
Low Price & Low Added Value - Low quality but expected to sell in high quantity. Despite a low price, the product or service lacks differentiation, and the consumer perceives little value.
Example: The 1$ store.
Low Price - Compare to number 1, the market values the product/service. You need to sell in quantities to overcome low sales- low prices that are fatal. Example: Ryanair, Walmart
Hybrid - The consumer perceived high value in multiple low-pricing products or services. The added value is what’s important here, and this is challenging for businesses.
Differentiation - The companies provide the best offer products that are high in quality at an average price and wish to offer their customers the highest level of the perceived added value that makes them curate a distinctive identity in the market.
Focused Differentiation - They have extremely high perceived value and a price to match. Consumers buy the product based predominantly on perception. This perception allows companies to price themselves higher.
Examples: Rolex, Ferrari.
Risky High Margins - Sometimes companies take a gamble and simply increase their prices without any increase to the value side of the equation. When the price increase is accepted, they enjoy higher profitability. When it isn’t, their share of the market plummets, until they make an adjustment to their price or value.
Example - Gym Memberships,
Monopoly Pricing - These companies usually don’t exist anymore as there are many competitors and technology influx which doesn’t allow one company to dominate.
Example: Maybe your broadband network or one pharmaceutical drug is available in the market.
Loss of Market Share - Involves products with low perceived value but disproportionately high pricing. This is not desirable for any company as it means that the company cannot offer the products or services that the customers value.
Positions 6, 7, and 8 of Bowman’s Strategy Clock are not viable competitive strategies in truly competitive marketplaces. Whenever the price is greater than the perceived value, you have an uphill battle. There will always be competitors offering better quality products at lower prices, so you have to have your value and price aligned correctly.
The main and basic intention of Bowman’s Strategy Clock is for the companies to analyse and understand how the products should be positioned in the market to gain a competitive advantage.
Tim’s Hiring Zone:
You can find growth-related jobs here.