11 Proven Pricing Strategies And Models


Price is one of the most important aspects of any business. In order to truly make it in today’s competitive world, you must know the best pricing strategies that are proven to get you more customers and sales. This article will go through 12 proven ways to price your products with different strategies and models that you can choose from to find the one that works for your company.

What Is A Pricing Strategy?

Pricing is an important part of any business. It defines the value of your product and can help you determine what customers to pursue, how you want to promote your products, and what products to sell in the first place. There are many different pricing strategies that you can find but also companies that can support you directly such as who can provide solutions at every step and implement for each product that you sell.

You can choose from multiple ways, such as considering different models or pricing strategies according to your company (like freemium or flat-rate) and other product elements like the cost of the product, time remaining on the product, etc. Below we will go over some of the best pricing strategies and find out what works for your business.

5 Pricing Strategies You Should Know

The following five pricing strategies and models are the most well-known and used.

Premium Pricing

Premium pricing strategies are used by companies with expensive products, like luxe hotels or high-end cars, where customers value the quality of the product more than anything else. This strategy can increase your profit margins, but it does not work for every business, and it is not always the best option.

Penetration Pricing

Companies use penetration pricing to get new customers. Using this pricing strategy, you can lower your prices to attract more buyers or sell at the same price, but with a lower cost of production. This strategy is used by businesses with low shipping costs or marketing costs and requires a lot of sales to make up for it.

Price Skimming

Price skimming is when you price your products at a higher spot to make all the money from the customers who buy your product first. This means that you have a higher price initially and then lower it in the future. This strategy is more common for technology companies since they deal with obsolete products, and customers will buy products as soon as they are released.

Bundle Pricing

Bundle pricing is also known as package pricing or an all-inclusive pricing model. This strategy offers your customers a discount if they decide to purchase multiple related items, such as a bundle of magazines, two for one concert tickets, or a gym membership with certain equipment that is included. This model can also attract customers and make new ones, especially if you have VIP packages and allow customers to upgrade the quality of their experience.


Loss-leading is when you sell an item at a loss to attract more customers. This strategy can be applied to encourage customers to purchase things they did not plan on purchasing, as well as create a sense of urgency by selling out at discounted prices. For instance, you could combine the loss-leading pricing strategy with bundle pricing to make a special deal where if you buy three items (that may be related), you will get 1 for free.

6 Pricing Models To Consider

The following seven pricing models are used by many businesses and have become standard models for many industries.

Tiered Subscriptions

Tiered subscriptions are a common pricing model. Basically, you have three or more different subscription options: free, basic, and premium. This model works very well because it allows your customers to choose the option that works best for them, and they are able to explore all of the features of your products before they decide.

Flat-Rate Subscriptions

A flat-rate subscription is a price that is not tiered, meaning that every customer has the same price regardless of the services provided. This pricing model is used by businesses that sell numerous products and services on their website. It is very effective because it does not cost the business anything extra to offer this service because customers are already paying for the subscription with their monthly payments.

Pay As You Feel/Pay What You Want

This model allows customers to pay at their price, meaning that there is no minimum or maximum amount to be paid. This strategy can be risky, but it’s great for large companies with a large marketing budget and a bigger profit margin than smaller businesses.

Bulk Pricing

Bulk pricing is an effective pricing strategy for businesses with multiple products priced under one roof or the same structure, depending on the product type. Customers get a discount when they buy a bulk amount of the product, but they cannot buy less than the set amount of products.

Market Pricing

It is a great option for businesses that want to set up their prices based on the product’s value and what competitors are selling it for. This pricing model may also be known as competitive pricing, competitive analysis, price shaving, or price matching.

Sliding Scale Pricing

Sliding scale pricing is also known as progressive or income-based pricing (IBP). This model allows your customers to choose how much they want to pay for your product or service. This pricing model can be used along with market pricing and is most effective for businesses with a high-profit margin.

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