Penetration Pricing

What is Penetration Pricing?

Penetration pricing is a strategy where a business sets a low price for a new product or service to attract customers and gain market share quickly. This approach is particularly effective in markets with high price sensitivity and where customers are willing to switch from existing providers to try a new offering.

The primary goal of penetration pricing is to establish a strong customer base and create brand awareness. By offering a lower price than competitors, businesses can entice customers to try their product and build loyalty over time. Once a significant market share is achieved, the business may gradually increase prices.

Penetration pricing is often used during the introduction phase of a product lifecycle. It can help overcome barriers to entry in competitive markets and disrupt established players. However, this strategy requires substantial financial resources to sustain lower prices until sufficient market penetration is achieved.

A key advantage of penetration pricing is its ability to generate high sales volume quickly, which can lead to economies of scale and lower production costs. Additionally, it can create a perception of value among customers, encouraging them to choose the new product over higher-priced alternatives.

However, penetration pricing also carries risks. Setting prices too low may result in minimal profit margins, making it challenging to cover costs and achieve profitability. Additionally, once prices are increased, there is a risk of customer churn if customers perceive the new price as too high. Businesses must carefully plan their pricing strategy to balance initial low prices with long-term profitability.

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Absorption Pricing

Accounts Receivable

ACH

Advance Billing

AI Agent Pricing

AI Model Pricing

AI Token Pricing

AISP

ARR

ASC 606

Automated Investment Services

Automated Invoicing

Basing Point Pricing

Basket-based Pricing

Billing Cycle

Billing Engine

Captive Product

Channel Incentives

Channel Pricing

Choke Price

Churn

Clearing and Settlement

Commercial Pricing

Competitive Pricing

Consolidated Billing

Consumption Based Pricing

Contribution Margin-Based Pricing

Conversation Based Pricing

Cost Plus Pricing

Cost-Based Pricing

CPQ

Customer Based Pricing

Customer Profitability

Deal Management

Deal Pricing Guidance

Deal Pricing Optimization

Decoy Pricing

Deferrred Revenue

Digital Banking

Discount Management

Dual Pricing

Dunning

Dynamic Pricing

Dynamic Pricing Optimization

E-invoicing

E-Money

EBIDTA

Embedded Finance

Enterprise Resource Planning (ERP)

Entitlements

ERP

Feature-Based Pricing

Finance AI

Fintech

Fintech Ecosystem

Flat Rate Pricing

Freemium Model

Frictionless Sales

Generative AI Pricing

Grandfathering

Guided Sales

Hedonic Pricing

High-Low Pricing

Hybrid Pricing Models

Idempotency

IFRS 15

Insurtech

Intelligent Pricing

Invoice

Invoice Compliance

KYC

Lending-as-a-Service (LaaS)

Lifecycle Pricing

Loss Leader Pricing

Margin Leakage

Margin Management

Margin Pricing

Marginal Cost Pricing

Market Based Pricing

Metering

Micropayments

Minimum Commit

Minimum Invoice

MRR

Multi-currency Billing

Multi-entity Billing

Neobank

Net Dollar Retention

Odd-Even Pricing

Omnichannel Pricing

Open Banking

Outcome Based Pricing

Overage Charges

Pay What You Want Pricing

Payment Gateway

Payment Processing

Peer-to-peer Lending

Penetration Pricing

PISP

Predictive Pricing

Price Benchmarking

Price Configuration

Price Elasticity

Price Estimation

Pricing Analytics

Pricing Bundles

Pricing Efficiency

Pricing Engine

Pricing Software

Product Pricing App

Proration

PSD2

PSP

Quotation System

Quote Request

Quote-to-Cash

Quoting

Ramp Up Periods

Real-Time Billing

Recurring Payments

Region Based Pricing

RegTech

Revenue Analytics

Revenue Backlog

Revenue Forecasting

Revenue Leakage

Revenue Optimization

Revenue Recognition

SaaS Billing

Sales Enablement

Sales Optimization

Sales Prediction Analysis

SCA

Seat-based Pricing

Self Billing

Smart Metering

Stairstep Pricing

Sticky Stairstep Pricing

Subscription Management

Supply Chain Billing

Tiered Pricing

Tiered Usage-based Pricing

Time Based Pricing

Top Tiered Pricing

Total Contract Value

Transaction Monitoring

Usage Metering

Usage-based Pricing

Value Based Pricing

Volume Commitments

Volume Discounts

WealthTech

White-label Banking

Yield Optimization

From startup to IPO and beyond

Designed for fast-growing businesses

Scale revenue operations across multiple countries, entities, and currencies, without having to build complex billing infrastructure.

From startup to IPO and beyond

Designed for fast-growing businesses

Scale revenue operations across multiple countries, entities, and currencies, without having to build complex billing infrastructure.

Why Solvimon

Helping businesses reach the next level

The Solvimon platform is extremely flexible allowing us to bill the most tailored enterprise deals automatically.

Ciaran O'Kane

Head of Finance

Solvimon is not only building the most flexible billing platform in the space but also a truly global platform.

Juan Pablo Ortega

CEO

I was skeptical if there was any solution out there that could relieve the team from an eternity of manual billing. Solvimon impressed me with their flexibility and user-friendliness.

János Mátyásfalvi

CFO

Working with Solvimon is a different experience than working with other vendors. Not only because of the product they offer, but also because of their very senior team that knows what they are talking about.

Steven Burgemeister

Product Lead, Billing