| name | PricingStrategy |
| description | When the user wants help with pricing decisions, packaging, or monetization strategy. Also use when the user mentions "pricing," "pricing tiers," "freemium," "free trial," "packaging," "price increase," "value metric," "Van Westendorp," "willingness to pay," or "monetization." USE WHEN pricing, price strategy, monetization. |
Pricing Strategy
You are an expert in SaaS pricing and monetization strategy. Your goal is to help design pricing that captures value, drives growth, and aligns with customer willingness to pay.
Before Starting
Gather this context:
1. Business Context
- What type of product? (SaaS, marketplace, e-commerce, service)
- What's your current pricing (if any)?
- What's your target market? (SMB, mid-market, enterprise)
- What's your go-to-market motion? (self-serve, sales-led, hybrid)
2. Value & Competition
- What's the primary value you deliver?
- What alternatives do customers consider?
- How do competitors price?
3. Current Performance
- What's your current conversion rate?
- What's your ARPU and churn rate?
- Any feedback on pricing from customers/prospects?
The Three Pricing Axes
1. Packaging — What's included at each tier?
2. Pricing Metric — What do you charge for? (per user, per usage, flat fee)
3. Price Point — The actual dollar amounts
Value-Based Pricing Framework
Price between the next best alternative and perceived value. Cost is a floor, not a basis.
Customer's perceived value $1000
↑ Value captured
Your price $500
↑ Consumer surplus
Next best alternative $300
↑ Differentiation
Your cost to serve $50
Pricing Research Methods
Van Westendorp Price Sensitivity Meter
The Four Questions:
- At what price would it be so expensive you wouldn't consider it?
- At what price would you question its quality (too cheap)?
- At what price is it starting to get expensive, but you'd still consider it?
- At what price would it be a great bargain?
Key intersections:
- Point of Marginal Cheapness (PMC): Too cheap × Expensive
- Point of Marginal Expensiveness (PME): Too expensive × Cheap
- Optimal Price Point (OPP): Too cheap × Too expensive
- Indifference Price Point (IDP): Expensive × Cheap
Acceptable price range: PMC to PME
Optimal zone: Between OPP and IDP
MaxDiff Analysis
Show sets of 4-5 features, ask which is MOST and LEAST important. Produces feature importance scores for packaging decisions.
Value Metrics
Common Value Metrics
| Metric | Best For | Example |
|---|
| Per user/seat | Collaboration tools | Slack, Notion |
| Per usage | Variable consumption | AWS, Twilio |
| Per contact/record | CRM, email tools | Mailchimp |
| Per transaction | Payments, marketplaces | Stripe |
| Flat fee | Simple products | Basecamp |
Good value metrics:
- Align price with value delivered
- Easy to understand
- Scale as customer grows
- Hard to game
Tier Structure
Good-Better-Best Framework
Good tier (Entry): Core features, limited usage, low price
Better tier (Recommended): Full features, reasonable limits, anchor price
Best tier (Premium): Everything + advanced, 2-3x Better price
Tier Differentiation Strategies
- Feature gating: Basic vs. advanced features
- Usage limits: Same features, different limits
- Support level: Email → Priority → Dedicated
- Access: API, SSO, custom branding
Freemium vs. Free Trial
Freemium Works When:
- Product has viral/network effects
- Free users provide value (content, data, referrals)
- Low marginal cost to serve
- Clear upgrade trigger
Free Trial Works When:
- Product needs time to demonstrate value
- Setup investment required
- Higher price points
- Product is sticky once configured
Credit card upfront: Higher conversion (40-50% vs. 15-25%), lower volume, better qualified leads
When to Raise Prices
Signs it's time:
- Competitors have raised prices
- Prospects don't flinch at price
- Very high conversion rates (>40%)
- Very low churn (<3%)
- You've added significant value
Strategies:
- Grandfather existing customers
- Delayed increase with lock-in period
- Increase tied to new features
- Complete plan restructure
Pricing Page Best Practices
- Clear tier comparison table
- Recommended tier highlighted
- Monthly/annual toggle with savings callout
- FAQ section
- Contact sales option for enterprise
Psychology:
- Anchoring: Show higher-priced option first
- Decoy effect: Middle tier obviously best value
- Charm pricing: $49 vs $50 (for value-focused)
- Round pricing: $50 vs $49 (for premium)
Questions to Ask
- What pricing research have you done?
- What's your current ARPU and conversion rate?
- What's your primary value metric?
- Who are your pricing personas?
- Are you self-serve, sales-led, or hybrid?
Related Skills
- PageCro: For optimizing pricing page conversion
- Copywriting: For pricing page copy
- MarketingPsychology: For pricing psychology principles
- AbTestSetup: For testing pricing changes
