Pricing Packaging Brief
Build pricing that reflects value delivered - not cost to build. Structure every pricing decision with customer segmentation, value metric identification, competitive context, and a packaging recommendation.
Pricing Foundations
Three questions to answer before any pricing decision:
- Who is our buyer? (Role, company size, willingness to pay)
- What value do we deliver? (Quantifiable outcome - time saved, revenue generated, risk reduced)
- What is our pricing model? (Per seat, usage-based, flat, hybrid)
Pricing Models
| Model |
Best For |
Risk |
| Per Seat |
Collaboration tools, team software |
Disincentivises adoption as team grows |
| Usage-Based |
APIs, infrastructure, consumption tools |
Revenue unpredictability for both sides |
| Flat Rate |
Simple tools, early-stage |
Leaves money on table from power users |
| Tiered |
Products with clear user segments |
Feature gatekeeping frustrates users |
| Freemium |
Viral/PLG products with low marginal cost |
Conversion to paid is hard to engineer |
| Value-Based |
Enterprise, outcomes-driven products |
Requires strong ROI story |
Freemium Decision Framework
Use freemium when:
- Marginal cost per free user is near zero
- Product is inherently viral (network effects or sharing)
- Free tier creates genuine value (not just a demo)
- Clear upgrade trigger exists (feature, volume, or team size)
- Conversion benchmark is realistic (2–5% free-to-paid is typical)
Avoid freemium when:
- Support cost per free user is high
- No natural upgrade trigger in the product
- Core value requires features you'd need to gate
Packaging / Tiering Framework
Recommended 3-tier structure for SaaS:
| Tier |
Target |
Price Signal |
Key Features |
Lock-in Mechanism |
| Free / Starter |
Individual, early discovery |
$0 |
Core value, usage-limited |
Invite colleagues, export limit |
| Pro / Growth |
SMB, growing teams |
$[X]/seat/mo |
Full features, higher limits |
Team collaboration, integrations |
| Business / Enterprise |
Mid-market, enterprise |
$[X]/seat/mo or custom |
Admin, SSO, SLAs, dedicated support |
Security, compliance, volume |
Tier design rules:
- Each tier should be genuinely sufficient for its target segment
- The upgrade trigger should be felt naturally - not manufactured
- Price jumps of 3–5x between tiers are normal and defensible
Competitive Pricing Context
| Competitor |
Model |
Price |
Key Differentiator |
| [Name] |
[Model] |
[Price] |
[What they lead with] |
Positioning options:
- Premium: Price 20–40% above market. Justify with enterprise features, support, or brand.
- Parity: Match the market leader. Win on product or distribution.
- Value: Price below market. Win on volume. Dangerous without strong unit economics.
Output Format
Pricing Strategy Recommendation - [Product] - [Date]
Current State: [What pricing exists today, if any]
Problem to Solve: [Why pricing is being reviewed]
Recommended Pricing Model: [Model name + rationale]
Value Metric: [The single unit that scales with customer value - e.g., "active users", "API calls", "documents processed"]
Proposed Tiers:
[Table using 3-tier structure above]
Free-to-Paid Upgrade Trigger: [Specific moment or threshold that creates natural upgrade pressure]
Competitive Position: [Premium / Parity / Value + reasoning]
Pricing Change Rollout (if applicable):
- Grandfathering: [Yes / No - recommendation and rationale]
- Communication plan: [How to tell customers + timing]
- Rollback plan: [Under what conditions you'd revert]
Risks:
- [Risk] → Mitigation: [Action]
Metrics to Monitor Post-Change:
- Conversion rate (free to paid)
- Churn rate by tier
- Average revenue per user (ARPU)
- Expansion revenue
Required Inputs
Ask the user for these if not provided:
- Product or service being priced
- Current pricing (if any - and why it's being reviewed)
- Target customer segments (size, role, willingness to pay)
- Key competitors and their pricing (if known)
- Business model (SaaS / Marketplace / Usage-based / Other)
- Primary goal (grow adoption / increase ARPU / reduce churn / new market entry)
Quality Checks
Guidelines
- Never price based on cost - price based on value delivered to the customer
- Always A/B test price changes where possible; use geographic holdouts if A/B isn't feasible
- Recommend annual pricing with 15–20% discount - improves cash flow and reduces churn
- If enterprise pricing is "contact us", recommend adding a price floor to qualify inbound
1---2name: pricing-packaging-brief3description: Frame pricing and packaging decisions with segments, value metrics, tiers, risks, and tests.4---56# Pricing Packaging Brief78Build pricing that reflects value delivered - not cost to build. Structure every pricing decision with customer segmentation, value metric identification, competitive context, and a packaging recommendation.910## Pricing Foundations1112Three questions to answer before any pricing decision:131. **Who is our buyer?** (Role, company size, willingness to pay)142. **What value do we deliver?** (Quantifiable outcome - time saved, revenue generated, risk reduced)153. **What is our pricing model?** (Per seat, usage-based, flat, hybrid)1617---1819## Pricing Models2021| Model | Best For | Risk |22|---|---|---|23| **Per Seat** | Collaboration tools, team software | Disincentivises adoption as team grows |24| **Usage-Based** | APIs, infrastructure, consumption tools | Revenue unpredictability for both sides |25| **Flat Rate** | Simple tools, early-stage | Leaves money on table from power users |26| **Tiered** | Products with clear user segments | Feature gatekeeping frustrates users |27| **Freemium** | Viral/PLG products with low marginal cost | Conversion to paid is hard to engineer |28| **Value-Based** | Enterprise, outcomes-driven products | Requires strong ROI story |2930---3132## Freemium Decision Framework3334Use freemium when:35- Marginal cost per free user is near zero36- Product is inherently viral (network effects or sharing)37- Free tier creates genuine value (not just a demo)38- Clear upgrade trigger exists (feature, volume, or team size)39- Conversion benchmark is realistic (2–5% free-to-paid is typical)4041Avoid freemium when:42- Support cost per free user is high43- No natural upgrade trigger in the product44- Core value requires features you'd need to gate4546---4748## Packaging / Tiering Framework4950Recommended 3-tier structure for SaaS:5152| Tier | Target | Price Signal | Key Features | Lock-in Mechanism |53|---|---|---|---|---|54| **Free / Starter** | Individual, early discovery | $0 | Core value, usage-limited | Invite colleagues, export limit |55| **Pro / Growth** | SMB, growing teams | $[X]/seat/mo | Full features, higher limits | Team collaboration, integrations |56| **Business / Enterprise** | Mid-market, enterprise | $[X]/seat/mo or custom | Admin, SSO, SLAs, dedicated support | Security, compliance, volume |5758Tier design rules:59- Each tier should be genuinely sufficient for its target segment60- The upgrade trigger should be felt naturally - not manufactured61- Price jumps of 3–5x between tiers are normal and defensible6263---6465## Competitive Pricing Context6667| Competitor | Model | Price | Key Differentiator |68|---|---|---|---|69| [Name] | [Model] | [Price] | [What they lead with] |7071Positioning options:72- **Premium:** Price 20–40% above market. Justify with enterprise features, support, or brand.73- **Parity:** Match the market leader. Win on product or distribution.74- **Value:** Price below market. Win on volume. Dangerous without strong unit economics.7576---7778## Output Format7980### Pricing Strategy Recommendation - [Product] - [Date]8182**Current State:** [What pricing exists today, if any]83**Problem to Solve:** [Why pricing is being reviewed]8485**Recommended Pricing Model:** [Model name + rationale]8687**Value Metric:** [The single unit that scales with customer value - e.g., "active users", "API calls", "documents processed"]8889**Proposed Tiers:**9091[Table using 3-tier structure above]9293**Free-to-Paid Upgrade Trigger:** [Specific moment or threshold that creates natural upgrade pressure]9495**Competitive Position:** [Premium / Parity / Value + reasoning]9697**Pricing Change Rollout (if applicable):**98- Grandfathering: [Yes / No - recommendation and rationale]99- Communication plan: [How to tell customers + timing]100- Rollback plan: [Under what conditions you'd revert]101102**Risks:**103- [Risk] → Mitigation: [Action]104105**Metrics to Monitor Post-Change:**106- Conversion rate (free to paid)107- Churn rate by tier108- Average revenue per user (ARPU)109- Expansion revenue110111---112113## Required Inputs114115Ask the user for these if not provided:116- **Product or service** being priced117- **Current pricing** (if any - and why it's being reviewed)118- **Target customer segments** (size, role, willingness to pay)119- **Key competitors and their pricing** (if known)120- **Business model** (SaaS / Marketplace / Usage-based / Other)121- **Primary goal** (grow adoption / increase ARPU / reduce churn / new market entry)122123## Quality Checks124125- [ ] Value metric is defined (the unit that scales with customer value)126- [ ] Free-to-paid upgrade trigger is specific (not "when they need more")127- [ ] Competitive positioning is chosen and justified (premium / parity / value)128- [ ] Pricing change rollout plan includes grandfathering decision129- [ ] Counter-metrics are defined to catch perverse incentives130- [ ] Risks have specific mitigations (not just listed)131132## Guidelines133134- Never price based on cost - price based on value delivered to the customer135- Always A/B test price changes where possible; use geographic holdouts if A/B isn't feasible136- Recommend annual pricing with 15–20% discount - improves cash flow and reduces churn137- If enterprise pricing is "contact us", recommend adding a price floor to qualify inbound
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