What are the key factors to consider when pricing a product or service?

Depends how unique your USP is

Competitors!

Pricing is part of a grand strategy that works with both the product and the marketing.

One key factor to consider when pricing a product or service is the perceived value to the customer. The price should align with the benefits and solution it provides. E.g. I sow many products on PH that allow you to create a beautiful screenshot with a background for social networks, but they cost 10$/m. Considering that I can do the same thing in Figma for free, it's so much. But if the cost were something like 1-3$, I would consider the subscription

Competitor pricing. Customer's price sensitivity. The quality of service being offered. Brand positioning.

Market research is your starting point - what's the competition charging? Then, cost of production - gotta cover those and still make a profit.

We did a price sensitivity analysis just a few weeks ago, and one surprising thing we found out is how strong the impact of psychological price levels is and how this differs per country. For example, for one country, we increased the price from 84 to 96 and saw no statistically significant decrease in conversion rate. But when we tried stretching it more to 108, there was a discernable drop. Interestingly, some countries have psychological levels that we wouldn't have discovered if we didn't run the test. A natural guess for us is that these levels come in multiples of 1000, for example, but when we analyzed the data, some actually come in multiples of 500 or 250. This was a small optimization on the grand scale of things, but it did provide us with an almost instantaneous 15-20% increase in revenue at a price of a survey.