High launch price, then controlled reductions — Skimming maximises revenue per customer group and demands strict discipline on the way down.
What it is
Skimming sets a high price at launch, deliberately addressing buyers with the highest willingness-to-pay. The price is then lowered step by step to successively reach the next segments.
How it works in practice
- Consumer electronics: smartphones launch at premium prices and step down over 12–18 months.
- Pharma: patent-protected medicines start expensive and decline under generics pressure once the patent expires.
- Publishing: hardcover first, paperback and e-book with a delay.
What customers gain
- Early access to innovations for adopters with high willingness-to-pay.
- Clear value signals via the launch price.
- Subsequent price reductions for more price-sensitive buyers.
What providers gain
- Maximum revenue capture in the first months.
- Refinancing of R&D investments.
- Clear brand positioning as a premium provider.
Where to be careful
- Competitive incentive: high entry prices attract imitators.
- Reputation risk: aggressive markdowns annoy early buyers.
- Volume sacrifice: a premium launch dampens broad adoption.
When does the method fit?
Skimming works when you have a product with real differentiation, protected IP or short-term competitive lead. The prerequisite is a clearly segmentable market in which at least part of the customer base is willing to pay a premium for early access. Without that segmentation, the strategy is purely a launch margin that later collapses.
Andreas Stauber
Founder & Managing Director, Resilient Value GmbH