In my previous blog posts, I have discussed at length the complexities of establishing an enterprise pricing structure, the dials on the model to optimize revenue and growth, and building a long term view of the price strategy. In this last post in the series, I want to go back to an even more fundamental concept: Value.

There seems to be a certain camp in the writing and publishing worlds that feels like selling a novel at $2.99 is somehow devaluing that novel, and novels in general. The idea seems to be that readers will refuse to pay more than $2.99 for novels eventually, and that will somehow topple the publishing industry. But no one is asking whether readers should pay more than $2.99 for most books. We’ve just accepted that paperbacks are priced at $8.99-$16 and that hardcover books are priced at $20-$30. And so we feel like ebooks should be priced somewhere along that line, too. But does anyone know why a mass market paperback is priced at $9? Or a trade paperback at $16? Or why a hardcover book is $25?

1. You create 3 different plans/packages, and intend to sell mainly the middle one. If your product is expensive, make your website look expensive.
2. The first plan is a decoy. It’s similar to the middle plan, but offers visibly less value while costing almost as much. Think of it as A- (as per The Economist example).
3. Second plan, the one you want to sell, offers good value for money. The price ends with 9. Maybe it even shows that it has been reduced from a previously higher price or it’s a sale (either way, it has to be true / ethical).
4. Third plan is to serve as a contrast to the middle one, it’s role is to anchor in a high figure. Make it much, much more expensive than the middle plan. You don’t actually intend to sell it, but there always the type that wants the most expensive plan – so make sure you can actually deliver on it.

I’m not saying that it’s impossible to be successful if you launch with a free plan.

Obviously free plans have worked well for companies like Wufoo, MailChimp, and FreshBooks, so we know they can work. But the problem is that we’re not them.

We need to stop blindly copying them and start thinking about ways to bring in revenue.