Product Differentiation & Pricing

[00:00:00]
>> So all of this boils down to is, how do I basically differentiate? How do I stand out from the competitors in the marketplace? And I can stand out with my features and functionality by solving and addressing a problem that isn't being addressed by the competitors. And market research and user feedback can help you find problems with your competitors that they haven't solved, or that they're addressing inadequately that you can address.

[00:00:29]
You can enhance existing features. You can take something that is already done by competitors and do it faster in a more user-friendly way or with more powerful features built into it. You could differentiate with technology as well, using emerging technologies like the AI example I gave or with offering better security than your competitors, or improve performance over your competitors.

[00:00:57]
You can differentiate with user experience, right? You can provide that better on-board experience that I was talking about earlier. You can ensure that those repeat actions that people are taking again and again in your app are not painful, are not annoying. You can ensure that your apps work on the broadest range of devices and for the broadest possible audience that you are targeting within the context of your targeting.

[00:01:25]
But the big one, of course, is you can differentiate with pricing. And often it comes back to a conversation around pricing. Pricing is one of the hardest things to do. And there are lots of ways, although we'll talk about pricing many times through this course, but you can use pricing as a way of differentiating yourself from the competition.

[00:01:47]
So for example, you can use a one-off payment for your product while everybody else does subscriptions, people are all getting sick of yet another subscription. So maybe you could do a one-off option instead. Maybe you could offer a freemium version, right, there's a free trial that can do the basics and it can be a great way of establishing yourself in a crowded marketplace.

[00:02:14]
You might wanna go entirely free, right? There is a place for that. And actually, there's some interesting research that says, if you ask for tips or for donations, actually, that can be a way of running a smaller business, right? I mean, it wouldn't scale particularly well, but if you're just creating something for a bit of fun and you wanna make a little bit of money off of it on the side, then tips and donations could work for you.

[00:02:47]
Or long side that I guess, is the pay as much as you like option which is basically the same thing, isn't it? And then there's the value added services or value added features that you could. So the core offering might be a very low price but you charge for extras that get added on to it in various ways.

[00:03:10]
So there are ways of doing pricing differently to your competitors that may appeal to a certain market group. So, one of the big things that you see from well-established competitors in the marketplace, is they've added feature after feature after feature over time, and they're charging for all of this as a big bundle.

[00:03:32]
And from a user's perspective, you go along and say, I wanna do that, but I don't care about the rest. I don't wanna be paying for all of the rest, right? And so there's an opportunity there. There are lots of different ways of working with pricing. Pricing is a really complicated issue that we will be coming back to because it is the trickiest thing to get right