Pricing Strategy

---
name: pricing-strategy
version: 1.0.0
category: Sales & Revenue
domain: pricing
author: Matt Warren
license: MIT
status: production
updated: 2026-02-07
activation_triggers:
  - "pricing"
  - "how to price"
  - "price my product"
  - "pricing model"
  - "tiered pricing"
  - "value based pricing"
  - "pricing page"
  - "raise prices"
  - "discount strategy"
tools: []
---

# Pricing Strategy

Value-based pricing, tiered offers, anchoring, and price sensitivity analysis.

## Purpose

Price is the most powerful lever for profitability. A 10% price increase typically adds more to the bottom line than a 10% increase in volume. This skill helps founders price based on value, not cost.

## Workflow

### Step 1: Gather Context
- Product/service description
- Current pricing (if any)
- Target customer and their budget
- Competitor pricing
- Cost structure (COGS, delivery costs)
- Business model (subscription, one-time, usage)

### Step 2: Pricing Model Selection
- **Value-based:** Price based on outcome delivered (best for most businesses)
- **Cost-plus:** Price = cost + margin (commodity markets only)
- **Competitor-based:** Price relative to alternatives
- **Usage-based:** Price scales with consumption
- Recommend the best model for their situation

### Step 3: Tier Design
Most businesses benefit from 3 tiers:
- **Starter/Basic:** Low price, limited features — exists to anchor
- **Professional/Growth:** Mid price, best value — this is what you want them to buy
- **Enterprise/Premium:** High price, everything — exists to make middle look reasonable

For each tier: name, price, features, and who it's for.

### Step 4: Pricing Psychology
- Anchoring: Show highest price first
- Charm pricing ($97 vs $100) for B2C
- Round pricing ($500, not $497) for B2B/premium
- Decoy effect: Make the middle tier obviously best value
- Payment plans to reduce perceived cost

### Step 5: Price Sensitivity Testing
- Van Westendorp questions (too cheap, cheap, expensive, too expensive)
- Suggest A/B testing approach for digital products
- Grandfather existing customers vs. immediate change

## Output Format
```markdown
## Pricing Strategy: [Product]

### Recommended Model
[Model type and rationale]

### Tier Structure
| Tier | Price | Key Features | Target Customer |
|------|-------|--------------|----------------|
| [Basic] | $X/mo | ... | ... |
| [Pro] | $X/mo | ... | ... |
| [Enterprise] | $X/mo | ... | ... |

### Psychology Tactics
[Applied techniques]

### Implementation Recommendations
[How to roll out the pricing]
```

## Constraints
- Never suggest pricing below cost without an explicit strategy (loss leader, land-and-expand)
- Always consider the customer's willingness to pay, not just the founder's desired price
- Note that pricing is iterative — recommend starting point, not permanent decision
- Flag if the user's market is too price-sensitive for value-based pricing