Price makes a statement.
Prime Future 153: the newsletter for innovators in livestock, meat, and dairy
A poultry vet tells the story that a classmate of his in vet school wanted to open up a clinic but did not want to do the mundane & monotonous work of spaying and neutering dogs & cats. To signal to pet owners that they should have their pets spayed and neutered elsewhere, he set his price for those services about 2x what other clinics would charge.
That outta do it, he thought.
But a funny thing happened.
Pet owners saw that his price was 2x what other vets charge and interpreted that as a signal that he must be really, really good at spaying and neutering pets. And since nobody likes to open their wallets like pet owners, suddenly, the bulk of this guy's business at the clinic was spaying & neutering.
I love that story because it illustrates a fundamental truth:
Price makes a statement.
Of all the data points that a decision maker can use in their process from quality of a product to service level and so on, price is an important one because it makes a statement about value.
A book that I like to re-read every few years because it hits differently every time is "How to Sell at Higher Margins". It hits on all sorts of mental model forming ideas about all things commercial, including this core idea that price makes a statement. (But also a lot of others that we’ll circle back to soon.)
If the price is too low, we tend to assume quality is low. If the price is high, we tend to infer higher quality, to a point.
There are two layers to any discussion about pricing:
Pricing model - the structure.
Price point - the actual number.
Both are fascinating topics to explore.
In relation to this newsletter, I’ve played around with different ways to monetize this work, from speaking gigs (too time consuming) to sponsored deep dives (feels like I’m outsourcing some of my freedom which is kinda my whole thing). So I’m now shifting to a paid subscription model.
All of this to say, I've written 152 newsletter editions of Prime Future that were free to all subscribers.
Moving forward, the consistent weekly newsletters you’re used to will be available only to paid subscribers.
Occasional editions of Prime Future will be publicly available to free and paid subscribers.
I was talking through this decision with some friends last week and one of them asked, what would you do if you don’t hit your goal of x% of subscribers converting to paid subscriptions? Gulp. Good question.
I would have two options in that scenario:
Increase the amount of time I spend on Prime Future in order to increase the quality so people would see more value in it and be willing to pay something to subscribe. But that's not really conducive with my life or goals, so that's not an option I'm interested in.
Stop writing Prime Future. If the market tells you a product is not worth enough to pay for it at a price point that makes it worth producing, you stop producing it.
Turning on paid subscriptions is a way to gauge how objectively valuable of a thing Prime Future is in the world.
Which raises the questions of pricing.
Since the pricing model is a monthly or annual subscription for access to all Prime Future content, the only tricky pricing-related question is, what price point makes the most strategic sense for my goals with this product (the newsletter) ?
If I wanted only CEO's of packers/animal health/animal nutrition companies and hedge fund managers to stick around, then I should set the price high. I dunno, $1,200 annually? $1,500?
But that price point would alienate a whole lot of people that are my people (producers, startup CEO's, etc). And my bet is on Prime Future as a tool to learn out loud and in the process find those who are equally as interested in how the industry innovates its way from here to there and are 'long-term games with long-term people' kind of people.
Alternatively, if I set the price at $1 or $2/month (or $0/month…), that could send a signal that this isn’t very important work, and I think we can all agree that the future of livestock, meat, and dairy is super important work.
I want this product to appeal to a broad audience of innovators from every angle of the industry, so I've set the price point at $9/month or $99/year.
As the buzz around alt proteins dies away, the burden is heavier than ever on beef, pork, poultry, and dairy producers (and everybody upstream and downstream from them) to continue innovating in a way that delivers better outcomes for producers AND consumers. There's work to be done.
I hope you'll continue with me on the journey and that we can learn a thing or two or ten together.
I'm bullish on the future of animal protein and the innovations that will get us from here to there.
What a time to be alive😉
(If you are already a subscriber, that button should allow you to easily upgrade your subscription from free to paid.)
You make me think differently about familiar topics. That’s certainly worth a couple of cups of coffee a month. Happy to sub. 👍
Couldn't agree more on the connection between price point and value... when it comes to consulting.
Publishing is a terribly fast-moving space these days, and I hope you're more successful than I in gaining a leg up on the plethora of free content to launch a paid subscription service profitably. I am building a body of research that requires paid subscriptions to access older than 1-week-old reports. Mainly, my writing is a method to demonstrate competency to potential consulting clients.
The overpriced incumbents are another problem. Some readers are just accustomed to the old pdf's and the usual voices; some execs think they 'need' to subscribe to expensive broadly-read newsletters to stay relevant and current in the cash markets.