Pricing Strategy

---
name: pricing-strategy
description: "When the user wants help with pricing, packaging, or monetization — 'pricing tiers,' 'freemium,' 'value metric,' 'Van Westendorp,' 'willingness to pay,' 'how much should I charge,' 'annual vs monthly,' 'per seat pricing,' 'should I offer a free plan.' For in-app upgrade screens, see paywall-upgrade-cro."
category: marketing
tier: on-demand
---

# Pricing Strategy

Design pricing that captures value, drives growth, and aligns with customer willingness to pay.

## Before Starting

**Product context:** If `.agents/product-marketing-context.md` exists (or `.claude/product-marketing-context.md` in older setups), read it first and tailor output to it; only ask for what it doesn't cover.

Gather (ask if not provided):

1. **Business Context** — product type (SaaS, marketplace, e-commerce, service); current pricing; target market (SMB, mid-market, enterprise); GTM motion (self-serve, sales-led, hybrid)
2. **Value & Competition** — primary value delivered; alternatives customers consider; competitor pricing
3. **Current Performance** — conversion rate, ARPU, churn; pricing feedback from customers/prospects
4. **Goals** — optimizing for growth, revenue, or profitability? Moving upmarket or downmarket?

---

## Pricing Fundamentals

### The Three Pricing Axes

1. **Packaging** — what's included at each tier (features, limits, support level) and how tiers differ
2. **Pricing Metric** — what you charge for (per user, per usage, flat fee) and how price scales with value
3. **Price Point** — actual dollar amounts; perceived value vs. cost

### Value-Based Pricing

Price on value delivered, not cost to serve: **customer's perceived value** is the ceiling; **next best alternative** is the floor for differentiation; **your cost to serve** is only a baseline, not the basis.

**Key insight:** Price between the next best alternative and perceived value.

---

## Value Metrics

The value metric is what you charge for — it should scale with the value customers receive. Good value metrics align price with value delivered, are easy to understand, scale as the customer grows, and are hard to game.

### Common Value Metrics

| Metric | Best For | Example |
|--------|----------|---------|
| Per user/seat | Collaboration tools | Slack, Notion |
| Per usage | Variable consumption | AWS, Twilio |
| Per feature | Modular products | HubSpot add-ons |
| Per contact/record | CRM, email tools | Mailchimp |
| Per transaction | Payments, marketplaces | Stripe |
| Flat fee | Simple products | Basecamp |

### Choosing Your Value Metric

Ask: "As a customer uses more of [metric], do they get more value?" Yes → good value metric; no → price doesn't align with value.

---

## Tier Structure Overview

### Good-Better-Best Framework

**Good (Entry):** core features, limited usage, low price. **Better (Recommended):** full features, reasonable limits, anchor price. **Best (Premium):** everything, advanced features, 2-3x Better price.

**Tier differentiation:** feature gating (basic vs. advanced), usage limits (same features, different limits), support level (Email → Priority → Dedicated), access (API, SSO, custom branding).

**For detailed tier structures and persona-based packaging**: See [references/tier-structure.md](references/tier-structure.md)

---

## Pricing Research

### Van Westendorp Method

Four questions that identify the acceptable price range:
1. Too expensive (wouldn't consider)
2. Too cheap (question quality)
3. Expensive but might consider
4. A bargain

Analyze intersections to find the optimal pricing zone.

### MaxDiff Analysis

Show sets of features; ask which is most/least important; results inform tier packaging.

**For detailed research methods**: See [references/research-methods.md](references/research-methods.md)

---

## When to Raise Prices

### Signs It's Time

- **Market:** competitors raised prices; prospects don't flinch; "It's so cheap!" feedback
- **Business:** very high conversion (>40%); very low churn (<3% monthly); strong unit economics
- **Product:** significant value added since last pricing; product more mature/stable

### Price Increase Strategies

1. **Grandfather existing** — new price for new customers only
2. **Delayed increase** — announce 3-6 months out
3. **Tied to value** — raise price but add features
4. **Plan restructure** — change plans entirely

---

## Pricing Page Best Practices

**Above the fold:** clear tier comparison table, recommended tier highlighted, monthly/annual toggle, primary CTA per tier.

**Common elements:** feature comparison table, who each tier is for, FAQ, annual discount callout (17-20%), money-back guarantee, customer logos/trust signals.

**Psychology:** anchoring (show higher-priced option first); decoy effect (middle tier = best value); charm pricing ($49 vs. $50, for value-focused); round pricing ($50 vs. $49, for premium).

---

## Pricing Checklist

### Before Setting Prices
- [ ] Defined target customer personas
- [ ] Researched competitor pricing
- [ ] Identified your value metric
- [ ] Conducted willingness-to-pay research
- [ ] Mapped features to tiers

### Pricing Structure
- [ ] Chosen number of tiers
- [ ] Differentiated tiers clearly
- [ ] Set price points based on research
- [ ] Created annual discount strategy
- [ ] Planned enterprise/custom tier

---

## Task-Specific Questions

1. What pricing research have you done?
2. Current ARPU and conversion rate?
3. Primary value metric?
4. Main pricing personas?
5. Self-serve, sales-led, or hybrid?
6. What pricing changes are you considering?

---

## Related Skills

- **churn-prevention** — cancel flows, save offers, reducing revenue churn
- **page-cro** — pricing page conversion
- **copywriting** — pricing page copy
- **marketing-psychology** — pricing psychology principles
- **ab-test-setup** — testing pricing changes
- **revops** — deal desk processes and pipeline pricing
- **sales-enablement** — proposal templates and pricing presentations