LinkedIn's decision to package some seldom-used features as high-margin "premium" accounts spawned a business line that now makes almost $250 million a year. At eBay, touting the benefits of a low-cost tool meant the difference between profitability and a loss.
Meanwhile, companies that didn't properly assess the value of their products and price them accordingly struggled or fizzled out.
Setting a price for a product is one of the most important decisions a company can make. But all too often it's treated as an afterthought. Startups in particular have a habit of setting their price low to attract customers and never raising it, or keeping a feature free long after it's clear people will pay.
"If you picked your price once and never changed it, it's probably wrong," says Phil Libin, chief executive of Evernote.
A more thoughtful approach to pricing can boost your company's profits, increase customer satisfaction and help you discover popular product variations that you hadn't considered.