Penetration Pricing

Entering a market with an intentionally low price to quickly gain customers and market share, typically planning to raise prices once established.

Penetration pricing works for new entrants in competitive markets where price sensitivity is high. The risk is attracting bargain-hunters who will not stay when prices rise.

You launch a new SaaS tool at £9/month (competitors charge £29) to build users fast. After 12 months and 1,000 customers, you raise to £19, existing customers are grandfathered, new ones pay full price.