You’ve spent months building your product. You’ve validated the problem. Schools love your solution. But when it comes to pricing, you’ve done what most EdTech founders do:
You looked at competitors, undercut them by 20%, and hoped that would win deals.
It won’t. Competing on price is a race to the bottom that you can’t win. There’s always someone willing to charge less, deliver less, and go out of business faster.
It’s time to stop guessing and start pricing strategically.
The Pricing Mistakes EdTech Founders Make
Mistake 1: Cost-Plus Pricing
You calculate your costs, add a margin, and call that your price. This ignores the value you create. A solution that saves schools £50,000 annually shouldn’t be priced based on your £10,000 development cost.
Mistake 2: Competitor-Based Pricing
You match or undercut competitors without understanding why they charge what they do. Their pricing might be wrong. Or they might be targeting different customers with different value propositions.
Mistake 3: One-Size-Fits-All Pricing
You charge the same price regardless of school size, usage, or value received. A 2,000-pupil secondary school gets the same value as a 200-pupil primary? Unlikely.
Mistake 4: Underpricing to “Get Traction”
You think low prices will accelerate adoption. They won’t. They’ll attract price-sensitive customers who churn quickly and devalue your solution in the market.
The Value-Based Pricing Framework
Price based on the value you create, not your costs or competitors’ prices. Here’s how:
Step 1: Quantify the Value You Create
What measurable outcomes does your solution deliver? Time saved? Cost reduced? Revenue increased? Student outcomes improved? Put numbers to these outcomes.
Example: If your solution saves teachers 5 hours per week and the school has 30 teachers, that’s 150 hours weekly or 5,400 hours annually. At £30/hour, that’s £162,000 in value.
Step 2: Identify Your Value Metric
What drives value for customers? Number of pupils? Number of teachers? Usage volume? Choose a metric that aligns with the value received. As they get more value, they pay more.
Step 3: Create Pricing Tiers
Segment customers by size, needs, or value received. Offer good/better/best options. Most customers choose the middle tier, but having a premium option anchors perceived value higher.
Step 4: Test and Optimise
Pricing isn’t set in stone. Test different price points with new customers. Track win rates, deal size, and customer feedback. Adjust based on data, not gut feel.
The Pricing Conversation
How you present pricing matters as much as the price itself:
Lead with Value, Not Price
Establish value before discussing price. “Based on your 40 teachers, you’ll save approximately 200 hours per week. That’s £6,000 in reclaimed time per week. Our annual fee is £15,000.”
Anchor High
Present your premium option first. This makes your standard pricing seem more reasonable. “Our enterprise package is £50,000 annually and includes… Our standard package at £25,000 includes…”
Frame Annually, Not Monthly
Education budgets are annual. Present annual pricing first, then break it down: “£12,000 annually, which works out to £1,000 per month or £33 per day.”
Bundle Value
Don’t itemise every feature. Bundle related capabilities into packages with clear value propositions. “Our Growth package includes everything you need to improve literacy outcomes across Key Stage 2.”
When to Increase Prices
Most EdTech companies wait too long to raise prices. Increase prices when:
- Your win rate exceeds 40% (you’re winning too easily)
- Customers rarely negotiate or push back on price
- You’ve added significant new features or capabilities
- You’ve proven measurable outcomes with case studies
- Your costs have increased (but only if value has too)
Grandfather existing customers for 12 months, then migrate them to new pricing. Most will accept it if you’ve delivered value.
The Pricing Tiers That Work
Structure your tiers to drive customers toward your target package:
Starter (Entry Point)
Limited features, smaller schools, lower price. This gets customers in the door but encourages upgrade as they see value.
Professional (Target Package)
Full features, most customers, optimal price point. This is where you want most customers to land. Price it for profitability.
Enterprise (Premium)
Unlimited usage, dedicated support, custom features. This anchors value high and serves your largest customers profitably.
Make the Professional tier obviously a better value than the Starter. Most customers will choose it.
Handling Price Objections
When prospects say “That’s too expensive,” they’re really saying one of three things:
“I don’t see the value” → Re-establish value. Quantify outcomes. Share case studies.
“I don’t have a budget” → Explore budget cycles, alternative funding sources, or phased implementation.
“I can get it cheaper elsewhere” → Differentiate on value, not price. If they’re comparing on price alone, you haven’t established unique value.
Never discount without getting something in return: longer contract, case study participation, referrals, or faster payment terms.
Stop Competing on Price, Start Capturing Value
Your pricing communicates your value. Price is too low, and schools assume your solution isn’t as good as the competitors’. Price is based on value, and you attract customers who care about outcomes, not just cost.
The goal isn’t to be the cheapest—it’s to be the obvious choice for schools that value what you deliver.
Ready to develop a pricing strategy that captures the value you create?
Join the free EdTech Founder’s Growth Playbook course for the complete Pricing Strategy Framework, including value quantification templates, pricing tier structures, and objection handling scripts.
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Because in EdTech, your pricing strategy determines your profitability—and your positioning.
About the Author: Stella is the founder of Seventh Sibling and has over 20 years of experience in EdTech sales, business development, and leadership. She’s helped EdTech companies achieve £2.2m profit turnarounds, 41% YoY revenue growth, and has won six innovation awards for her work in the education sector.
