Sustainable Pricing Models for First-Time Sellers

Pricing is a hot topic. At KPMG High Growth Ventures, we are fielding a high volume of enquiries on how to price here and when our clients launch internationally. It's clear that pricing strategies for #startups are evolving rapidly due to shifting market dynamics, customer expectations, and unpredictable macroeconomic conditions. The below is what I've been discussing in the last 2 weeks alone. 💹 Usage-Based & Value-Driven Pricing Startups, especially in SaaS, are moving away from fixed subscription models and adopting usage-based pricing (UBP), where customers pay based on consumption (e.g., API calls, storage, or active users). Why? It aligns revenue with customer success, making it easier to land and expand within accounts. 💹 AI-Driven Dynamic Pricing AI-powered pricing models are enabling real-time price adjustments based on demand, customer behavior, and competitor benchmarking. Example: E-commerce and B2B platforms are using AI to optimize discounting strategies based on customer lifetime value (LTV) predictions. 💹 Freemium + Premium Hybrid Models The traditional freemium model is evolving, with startups integrating premium feature unlocks, AI-assisted functionalities, or paywalled analytics to increase conversion rates. Example: Companies like Notion and OpenAI offer free tiers but monetise advanced capabilities. 💹 Localisation & Regional Price Sensitivity Startups are implementing geo-based pricing to maximize revenue in different markets, using regional purchasing power to justify tiered pricing. Example: Companies like Spotify and Netflix price their services differently in India vs. the U.S. 💹 Transparent & Ethical Pricing Customers demand pricing clarity—startups that eliminate hidden fees and offer straightforward pricing gain trust. Trend: More "cost-plus" models, where pricing is based on production costs + a margin, are emerging in sectors like direct-to-consumer (DTC) and fintech. 💹 Financial Engineering in Pricing Founders are leveraging payment flexibility—offering pay-over-time options, revenue-sharing models, and financing plans to improve accessibility. Example: B2B startups using monthly vs. annual prepayment toggles to balance cash flow and customer acquisition. 💹 AI & Data Monetisation as a Revenue Lever Startups are increasingly monetising data insights, analytics dashboards, and AI-powered recommendations as add-ons. Example: Companies selling anonymised, aggregated customer data insights as a separate revenue stream. ⚠️ Key Takeaway ⚠️ Pricing is no longer static and one size doesn't fit—startups must adopt flexible, data-driven, and customer-aligned pricing models to stay relevant and competitive.

For 2 good years, I underpriced my services. Because I was scared to ask for money😂 If you’re just starting out and wondering “How do I charge when I’m new?” this post is for you. Here are 10 beginner-friendly pricing strategies I wish someone shared with me when I was starting out: ✅ Start with a “Pilot Pricing” Strategy Offer your services at a discounted rate for a limited number of clients. Let them know it’s a beta or pilot offer, and their feedback/testimonial will help you refine your service. #Example: “I’m offering this service at a discounted rate for the first 3 clients in exchange for honest feedback/testimonials.” ✅ Package Your Value, Don’t Just Sell Time Don’t just charge per hour. Instead, bundle your value into a package. This makes it easier to justify your rate and reduces pricing comparisons. (I use this strategy often and it has worked every single time) #Example: Instead of saying “₦10,000/hr,” say “₦50,000 for a 3-day resume revamp package with 2 revisions and LinkedIn profile polish.” ✅Use the “Value Ladder” Pricing Approach Create 2–3 pricing tiers (e.g., Basic, Standard, Premium) so people can choose what suits their budget. This positions you as a professional, not a random freelancer. #ProTip This also helps filter unserious clients. ✅ Research Industry Rates but tailor for Your Level Check what others in your field are charging, then slightly reduce it while clearly stating what’s included. You don’t have to go super low just be clear and structured. How I used this: I’d google the global/international industry rate for that service and the average local rates then I charge something in between. ✅ Highlight Value Over Experience You may be new, but if you’re solving a real problem, that’s value. Focus on what the client gains: confidence, clarity, progress, time saved, peace of mind not just your hours. ✅Charge what feels fair to you If it doesn’t feel worth it, you’ll eventually resent it. So avoid undercharging just to get “experience.” Even beginner pricing should be respectful of your time, skill, and effort. ✅ Get Comfortable Talking About Money Practice saying your price confidently (even to yourself). No “umm... it’s just ₦X.” Say it cleanly: #Example: “My 2-week coaching program is ₦120,000 and includes XYZ.” ✅ Add Bonuses Instead of Discounting Rather than dropping your price, add value. #Example “I’ll also include a free 15-min check-in call” is better than reducing your fee by ₦5,000. ✅ Use Testimonials to Justify Raising Your Price Later Start small, collect social proof, and use that to gradually increase your rates. A beginner with 5 great testimonials can often charge more than someone experienced with none. ✅ Create a Pricing Document or Page Make your offers look polished, use a simple PDF or link to present your pricing and packages professionally. It communicates confidence and clarity. I created a pricing template for you. Get it here selar.com/0xj4e6

Do NOT copy the 'perfect' pricing models from Notion, Miro, Asana of the world. Not if you are early-stage ⛔ Pricing for early-stage startups is NOT about optimizing growth. I believe pricing should rather be good enough to NOT stop you from growing to 1€ million ARR. So it is primarily about: ✅ Aligning pricing model with growth motion (sales-led vs. product-led) ✅ finding the right value metric (for value-based pricing) ✅ Getting clarity on packaging So you need to analyze: - Packaging & Value Metrics - POC, Free Trials or Freemium - Pricing terms (contract length, payment schedule, cancellation policy) I like to thing about pricing as something iterative. You have a pricing to get from: 1️⃣ 0 to first 10 customers = pricing v1 2️⃣ 10-100 customers = pricing v2 3️⃣ 100 to X = pricing v3 Your pricing needs to match the stage of your company. So don't copy the 'perfect' pricing models from Notion, Miro, Asanas of the world. Not if you are early-stage. Instead, take it iteratively. Have a quarterly pricing meeting.

I wish someone had told me this BEFORE I launched my business. “It’s about long-term relationships, not short-term gains."      𝗛𝗼𝘄 𝗜 𝗱𝗶𝗱 𝗶𝘁 𝘄𝗿𝗼𝗻𝗴 When I started 1st Formations, I did what many founders do - I looked at my competitors, matched their prices, and tried to do what they did, just slightly better.  Big mistake.  I didn’t realise that my competitors were small-time operators. They weren't thinking strategically about:  ✅ Scaling their businesses  ✅ Building genuinely loyal customer relationships  ✅ Creating sticky, recurring revenue streams  And it was holding them back.  𝗛𝗼𝘄 𝘆𝗼𝘂 𝗰𝗮𝗻 𝗱𝗼 𝗶𝘁 𝗿𝗶𝗴𝗵𝘁 Prioritise building a sustainable subscription model from day one.  Too many businesses focus only on that first sale, on squeezing as much immediate profit as possible. But that’s a short-sighted strategy.  Here’s actionable advice for any founder:  ✅ Offer your initial product as attractively priced as possible (even at cost). This is your gateway product.  ✅ Use this initial sale to form a lasting relationship. It’s not the finish line, it's the starting point.  ✅ Develop subscription or refillable products and services that continuously solve real customer problems.  𝗪𝗵𝗼 𝗶𝘀 𝗱𝗼𝗶𝗻𝗴 𝗶𝘁 𝗿𝗶𝗴𝗵𝘁 Harry's.   Their genius wasn’t in their initial offering. It was creating products that required continuous engagement and loyalty.   Harry's provides attractively priced razors upfront, but they retain customers through subscriptions to ongoing blade and grooming product refills.  As the brilliant Sharmadean Reid MBE, founder of The Stack World, recently shared here on LinkedIn:  "Businesses built on subscription models succeed because they provide continuous value, not just a one-time purchase. Think long-term, build lasting relationships, not short-term gains."  𝗞𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆: Think ahead. Your goal isn't to maximise profit from the first sale; it's to maximise the lifetime value of your customer relationships.   Solve ongoing problems, build genuine connections, and sustainable growth will follow.  I share #FounderAdvice and #BusinessTips – follow me for more.