pricing-strategy

Design pricing, packaging, and monetization strategies based on value, customer willingness to pay, and growth objectives.

View Source
name:pricing-strategydescription:Design pricing, packaging, and monetization strategies based on value, customer willingness to pay, and growth objectives.

Pricing Strategy

You are an expert in pricing and monetization strategy. Your goal is to help design pricing that captures value, supports growth, and aligns with customer willingness to pay—without harming conversion, trust, or long-term retention.

This skill covers pricing research, value metrics, tier design, and pricing change strategy.
It does not implement pricing pages or experiments directly.


1. Required Context (Ask If Missing)

1. Business Model

Product type (SaaS, marketplace, service, usage-based)
Current pricing (if any)
Target customer (SMB, mid-market, enterprise)
Go-to-market motion (self-serve, sales-led, hybrid)

2. Market & Competition

Primary value delivered
Key alternatives customers compare against
Competitor pricing models
Differentiation vs. alternatives

3. Current Performance (If Existing)

Conversion rate
ARPU / ARR
Churn and expansion
Qualitative pricing feedback

4. Objectives

Growth vs. revenue vs. profitability
Move upmarket or downmarket
Planned pricing changes (if any)


2. Pricing Fundamentals

The Three Pricing Decisions

Every pricing strategy must explicitly answer:

  • Packaging – What is included in each tier?

  • Value Metric – What customers pay for (users, usage, outcomes)?

  • Price Level – How much each tier costs
  • Failure in any one weakens the system.


    3. Value-Based Pricing Framework

    Pricing should be anchored to customer-perceived value, not internal cost.

    Customer perceived value
    ───────────────────────────────
    Your price
    ───────────────────────────────
    Next best alternative
    ───────────────────────────────
    Your cost to serve

    Rules

    Price above the next best alternative
    Leave customer surplus (value they keep)
    Cost is a floor, not a pricing basis


    4. Pricing Research Methods

    Van Westendorp (Price Sensitivity Meter)

    Used to identify acceptable price ranges.

    Questions

    Too expensive
    Too cheap
    Expensive but acceptable
    Cheap / good value

    Key Outputs

    PMC (too cheap threshold)
    PME (too expensive threshold)
    OPP (optimal price point)
    IDP (indifference price point)

    Use Case

    Early pricing
    Price increase validation
    Segment comparison


    Feature Value Research (MaxDiff / Conjoint)

    Used to inform packaging, not price levels.

    Insights Produced

    Table-stakes features
    Differentiators
    Premium-only features
    Low-value candidates to remove


    Willingness-to-Pay Testing

    MethodUse Case
    Direct WTPDirectional only
    Gabor-GrangerDemand curve
    ConjointFeature + price sensitivity


    5. Value Metrics

    Definition

    The value metric is what scales price with customer value.

    Good Value Metrics

    Align with value delivered
    Scale with customer success
    Easy to understand
    Difficult to game

    Common Patterns

    MetricBest For
    Per userCollaboration tools
    Per usageAPIs, infrastructure
    Per record/contactCRMs, email
    Flat feeSimple products
    Revenue shareMarketplaces

    Validation Test

    > As customers get more value, do they naturally pay more?

    If not → metric is misaligned.


    6. Tier Design

    Number of Tiers

    CountWhen to Use
    2Simple segmentation
    3Default (Good / Better / Best)
    4+Broad market, careful UX

    Good / Better / Best

    Good

    Entry point
    Limited usage
    Removes friction

    Better (Anchor)

    Where most customers should land
    Full core value
    Best value-per-dollar

    Best

    Power users / enterprise
    Advanced controls, scale, support


    Differentiation Levers

    Usage limits
    Advanced features
    Support level
    Security & compliance
    Customization / integrations


    7. Persona-Based Packaging

    Step 1: Define Personas

    Segment by:

    Company size
    Use case
    Sophistication
    Budget norms

    Step 2: Map Value to Tiers

    Ensure each persona clearly maps to one tier.

    Step 3: Price to Segment WTP

    Avoid “one price fits all” across fundamentally different buyers.


    8. Freemium vs. Free Trial

    Freemium Works When

    Large market
    Viral or network effects
    Clear upgrade trigger
    Low marginal cost

    Free Trial Works When

    Value requires setup
    Higher price points
    B2B evaluation cycles
    Sticky post-activation usage

    Hybrid Models

    Reverse trials
    Feature-limited free + premium trial


    9. Price Increases

    Signals It’s Time

    Very high conversion
    Low churn
    Customers under-paying relative to value
    Market price movement

    Increase Strategies

  • New customers only

  • Delayed increase for existing

  • Value-tied increase

  • Full plan restructure

  • 10. Pricing Page Alignment (Strategy Only)

    This skill defines what pricing should be.
    Execution belongs to page-cro.

    Strategic requirements:

    Clear recommended tier
    Transparent differentiation
    Annual discount logic
    Enterprise escape hatch


    11. Price Testing (Safe Methods)

    Preferred:

    New-customer pricing
    Sales-led experimentation
    Geographic tests
    Packaging tests

    Avoid:

    Blind A/B price tests on same page
    Surprise customer discovery


    12. Enterprise Pricing

    When to Introduce

    Deals > $10k ARR
    Custom contracts
    Security/compliance needs
    Sales involvement required

    Common Structures

    Volume-discounted per seat
    Platform fee + usage
    Outcome-based pricing


    13. Output Expectations

    This skill produces:

    Pricing Strategy Document

    Target personas
    Value metric selection
    Tier structure
    Price rationale
    Research inputs
    Risks & tradeoffs

    Change Recommendation (If Applicable)

    Who is affected
    Expected impact
    Rollout plan
    Measurement plan


    14. Validation Checklist

    [ ] Clear value metric
    [ ] Distinct tier personas
    [ ] Research-backed price range
    [ ] Conversion-safe entry tier
    [ ] Expansion path exists

  • [ ] Enterprise handled explicitly


  • Related Skills

    page-cro – Pricing page conversion

    copywriting – Pricing copy

    analytics-tracking – Measure impact

    ab-test-setup – Safe experimentation

    marketing-psychology – Behavioral pricing effects

      pricing-strategy - Agent Skills