“We can’t call ourselves a ‘design tool’ because it implies a lower price.”

We hear this objection a lot... but here's why it's faulty thinking 👇🏻

To put it as simply as possible...

your product category does NOT determine your price.

As I've shown in the image below, there are cheap and expensive versions of every product category imaginable.

People will spend $12 on Sony headphones.

Others will spend over $5000 on Focal Utopia headphones.

Now you could argue that these have different features, and they do.

The sound quality will be exponentially better on the Focal Utopias than the Sonys.

But functionally, they fit into the same category:

→ headphones.

Similarly, you could argue that Salesforce's higher price point can be justified because they are more customizable and integrate-able than HubSpot.

Whether or not these are true product differentiators (or if you're simply paying a "brand tax" to go with the trusted market leader), it doesn't change the fact that your price point IS NOT limited by your category.

What then determines your price point?

→ it's a combination of your target customer segment and your brand value

The average person cannot afford an Hermès Birkin handbag.

But it wasn't made for the average person.

They're going after a different segment than the canvas totes being sold on Amazon.

Yes, your product will need to be PERCEIVED as being able to deliver the value that the segment requires.

And as I mentioned, this can be done with true product differentiation OR through perceived brand value, which can come from a variety of sources that have nothing to do with your product.

(The Bored Ape NFT's got their value from all the celebrities who bought them rather than some sort of intrinsic value.)

Here's the TL:DR 👇🏻

→ Resist the urge to invent a new category because you're worried existing ones will limit your price

→ Choose the category that best explains what your product is/does, and puts it in the best light — and don't worry about that implying a price point.