Case Study:
Redesign Pricing Strategy
Service
Strategy Advisory
Industry
Education
Client
Coderschool
Country
Vietnam
“TRIVE has been my single most trusted advisor on all aspects of the business.”
— Charles Lee, Founder
The Challenge
We were approached to look at a startup revenue structure and improve their profit margins for a sustainable business mode.
The Outcome
With our redesign pricing strategy, we were able to generate x7 more in revenue after implementing new pricing structures.
Our Approach
Developing a new pricing model
As a venture capital firm, we collectively identified a major challenge in the startup we were advising: the Product Revenue Fit problem. The startup had a quality coding course which was priced significantly lower than its potential market value at US$250 for a six-month course. Initially, the marketing team of the company considered this low price as an advantage given the affordability for a broad range of students. However, our team identified a disparity between the inherent value of the course and its low price tag, which we believed was limiting the company's revenue potential.
The product-revenue-fit problem
To address this issue, our team developed a new pricing strategy. By bringing together the expertise of the product and marketing teams, we sought to align the course's value with an appropriate price. After thorough discussion and analysis, we collectively decided to increase the price to US$1000, a significant leap from its original cost. Despite the initial reservations of the marketing team, we believed that the course’s high quality could command this higher price point.
What we have learned
Pricing can drive perceived value: The new pricing led to increased revenue, demonstrating that customers in this specific market, Vietnam, equate higher price with higher value. This correlation indicated that the original low price may have unintentionally signaled lower value.
Cultural values play a crucial role: In Vietnam, education is viewed as a potential escape from poverty. As such, customers were willing to pay a premium price for what they perceived as high-value education, reinforcing the importance of cultural factors in determining pricing strategies.
Collaborative decision-making is effective: Our team’s collective decision to restructure the pricing model despite initial concerns proved successful. This underscored the effectiveness of a collaborative approach, emphasizing that diverse perspectives within the team can lead to innovative and successful strategies.
What’s next?
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