I don't think it was much the raising prices part, but the re-branding your product to resonate with the market. This is something a lot of people out there don't get. That is why you don't purchase used BMWs anymore, but certified pre-owned BMWs. The branding is very important.
The awesome thing is that you went and took a structured approach to it, and then used the data to re-focus your brand to the market that will buy your focus. The money will continue to pile on if you keep using such approach. I would suggest looking into offline marketing tools to broaden your horizons.
I tested increasing prices without touching anything else and it resulted in significant revenue increase but I hit a local maximum as the segmenting was off and value communication needed to be improved. The right branding with the wrong pricing can actually hurt so it's extremely important to get both pricing and value messaging (including the qualitative stuff) right.
The brand and the price are not separate entities. The brand is the entity and the price is a property of the brand. If you change the price you modify the brand, but if you change the brand you completely change the price.
Very true. Back when I released InfoCaptor [1] in 2005, I released the product as a Data browser product with Tabbing (remember browser tabbing was just invented by Netcaptor) so I thought it would be cool to have a browser just for database and such. I released it at around $35.
After lot of experimentations and frustrations I finally rebranded it as a "Dashboarding and BI solution" (see it is a solution and not calling it a product) and raised the price 10 fold, yep around $300
Not to mention, it automatically entered the "league of big BI solution providers" and increased revenues (10 times ofcourse). Still my product was considered cheaper.
I don't think it was much the raising prices part, but the re-branding your product to resonate with the market. This is something a lot of people out there don't get. That is why you don't purchase used BMWs anymore, but certified pre-owned BMWs. The branding is very important. The awesome thing is that you went and took a structured approach to it, and then used the data to re-focus your brand to the market that will buy your focus. The money will continue to pile on if you keep using such approach. I would suggest looking into offline marketing tools to broaden your horizons.
Good luck.