The OpenAI team is currently researching how to build a pricing model for ChatGPT. Let’s break down their research effort.

The OpenAI team shared a survey on their Discord server to gather data on building a pricing model for ChatGPT.

I want to talk about the questions they’re asking related to pricing and how it might help you perform research for figuring out how to best price your product.

Survey – https://docs.google.com/forms/d/e/1FAIpQLScwuQEWBkxsNftEkvUgFx2Ov7pKcrOx8IUlZ241lvet7ziXCQ/viewform

Article – https://www.techradar.com/news/chatgpt-could-soon-start-charging-you-for-its-ai-skills

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Episode Transcript
Hey, folks, Sean here. And today what I want to talk to you about is that OpenAI is actively doing research, trying to figure out how to monetize ChatGPT.

And I want to talk to you about the research that they’re doing, some of the details of it, and what we can learn from it to help you figuring out how to design pricing for your product.

Now, I don’t know about you, but I’ve heard some really impressive use cases that people have come up with in getting very creative with how to leverage this technology.

Terms of generating a ton of value.

I’ve heard of everything from people leveraging Chat GPT to write code, all the way to creating poetry and writing books and everything in between.

It’s pretty wild. In fact, one of the most interesting things for me about all of this so far is outside the technology, hearing about the use cases and how people get really creative in figuring out how to generate value.

Now, the common theme in terms of what I’ve been paying particularly close attention to, in terms of what people are figuring out what to do with this technology, is how much value it’s generating. When I say value, what I mean is it’s providing them time back. It’s helping them become more efficient or generate even more effective results in terms of I can start to quantify some of this, which helps me get closer to this concept that I talk about a lot as well, too.

In ROI or return on investment, as in for the customer, they’re receiving time back. If they’re getting more value, we can start to figure out how to quantify that. And if we’ve got a better understanding in terms of what type of return on investment they’re getting, that can end up being a direct line for us to figure out where the product should appropriately be priced. As in you want to make sure you’re not charging too little and leaving a bunch of money on the table because you’re providing a lot of value and you’re under charging.

That can cause positioning problems and require people to kind of lose confidence in your product. Or you might be charging too much and chasing people away. Or there might not be enough value in your product. And if you set that price a little bit more appropriately, that will help you gain more traction and as such, generate that much more revenue because it’s priced appropriately relative to the value it’s providing for your customer.

So what I want to do next is I want to talk to you more about the process that OpenAI and the folks at Chat GPT are doing in terms of figuring out how to develop a pricing model for this product. Now, they’ve shared a survey through Google Forms, which is super straightforward and easy to use through their Discord server, which is asking a ton of questions about pricing.

And there’s two questions in particular that I’d like to focus on because I feel like they’re really insightful for those of us out there are trying to figure out how do we better understand whether or not our products are priced appropriately?

So let’s take a look at that survey and in particular those specific two questions.

The first thing I’ll mention is I love the simplicity of the survey. It’s just Google Forms. It doesn’t need to be all that advanced. And it’s pretty interesting when you think about how advanced the technology is that powers Chat GPT, but for this specific purpose, it works great. It’s a great way to get feedback from the users that are getting a lot of value out of the tool.

Now, the two questions in particular that I want to pay particularly close attention to are related to the upper and lower bounds of what they ultimately might charge for the product, which I think is a great way to gain context around how do we figure out whether or not the product is priced appropriately.

And one other thing I’ll mention before I speak specifically to these questions is this tool has provided so much value for so many people, the use cases are all over the place.

As I mentioned already, there is a lot of value that this product has provided a lot of people, meaning that they have almost unlimited potential to figure out how to price this product. But even so, even the fact that that is the case and they know that is the case, they’re still figuring out how to price it appropriately and they’re using techniques and strategies that I’ve leveraged to help people with their products as well too. In terms of figuring out the right pricing model, that could be a really key component for strong product market fit and figuring out what it is, I’ve worked on products that had almost everything else relatively well buttoned up with the exception of their pricing, and pricing mistakes can be made too low or too high.

Now, the two questions in particular that I want to talk about, they’re helpful in terms of providing context in terms of whether or not you might be charging too much or too little. And figuring out that right balance means that you’re going to have the opportunity to create the best experience for the customer as in you’re going to be providing them with more than enough value in the form of this return on investment, which is then going to in turn enable your product company to be able to generate maximum value as well. Too. So getting it right is really important.

Now, like I said before, the two questions in particular are about exploring these bounds.

And the first, which explores kind of the upper bound, is framed in a way to kind of get at whether or not to get more context around what the top end of that spectrum might look like. As in where would the product be priced at and what would that level look like to the extent where it would be too expensive, to the point where you wouldn’t consider buying It, as in what’s too high for this product.

Essentially, give me a little bit more context around that.

Now, on the other end of the spectrum, in order to figure out the bound on the lower end, the question is at what point would the product be priced in terms of that price being too low? To the point where you would question the value that you would get from the product.

And this speaks to positioning. So if you have a product that provides a ton of value, but it is charging too little, that can actually impact your customer’s perception of the value that the product is going to provide. It’s almost like seeing a high end product priced very low.

You might assume that it’s fake or it doesn’t work, or it doesn’t provide the value that it supposedly claims that it can because it’s not priced appropriately. It just doesn’t make sense. So from a psychological perspective, that also makes it very important to get this right.

Now, there are other questions on the survey, but these two, I feel like, are two of the most important ones and I would love to see the results.

I don’t know if I’ll get that opportunity, but I’ve issued surveys like this myself when I’ve helped other people with their products and figuring out pricing.

Now, if you’ve got everything else correct and you have questions about pricing your product in terms of is it set too low? Is it set too high?

Do you have it set right?

These are questions that I think can help you very much so in making sure that your pricing model is designed right.