# Pricing Strategy

> When to activate: pricing strategy, pricing model, freemium, usage-based pricing, per-seat, value metric, pricing research, Van Westendorp, packaging, price increase

- Skill: `mattakushi432/pricing-strategy` (Agent Skill)
- Install (CLI): `npx skillmds@latest add mattakushi432/pricing-strategy`
- Raw SKILL.md: https://api.skillmd.com/api/skills/mattakushi432/pricing-strategy/raw
- Safety review: pending
- Works with: Claude Code, Claude.ai, OpenAI Codex
- Category: AI & ML
- Author: Mattakushi432 (https://skillmd.com/u/mattakushi432)
- Updated: 2026-09-17
- Page: https://skillmd.com/skills/mattakushi432/pricing-strategy

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# Pricing Strategy

## Pricing Model Comparison

| Model | Mechanics | Best for | Risk |
|-------|-----------|---------|------|
| **Flat rate** | One price, all features | Simple products, commodities | Leaves money on table |
| **Per-seat** | Price × number of users | Collaboration tools | Incentivizes seat minimization |
| **Usage-based** | Pay for what you use | APIs, infra, AI | Unpredictable revenue |
| **Freemium** | Free tier + paid upgrade | PLG, high-volume acquisition | Support cost, low conversion |
| **Tiered** | Starter/Pro/Enterprise packages | Most B2B SaaS | Tier cannibalization |
| **Hybrid** | Seat base + usage overage | Modern SaaS | Complexity |

### Hybrid Model Pattern (increasingly common)
```
Base fee: $500/month (includes 10 seats + 10k API calls)
Overage: $2/seat/month + $0.01/additional API call
Enterprise: Custom contract with committed minimums
```

## Value Metric Identification

The value metric is what you charge for — it should scale with the value the customer gets.

### Good Value Metric Criteria
- [ ] Customers understand it immediately
- [ ] It grows as customers get more value
- [ ] It's easy to measure and invoice
- [ ] It aligns incentives (you succeed when customer succeeds)

### Finding Your Value Metric
1. List what customers do in your product
2. Identify what correlates with outcomes (revenue, time saved, risk reduced)
3. Pick the one that scales most naturally with customer success
4. Validate: do power users naturally consume more of it?

### Examples by Category
| Product | Value metric |
|---------|-------------|
| CRM | Contacts / deals |
| Email tool | Emails sent / subscribers |
| Analytics | Events tracked / data volume |
| Collaboration | Active seats |
| AI API | API calls / tokens |
| E-commerce tool | GMV processed |

## Pricing Research Methods

### Van Westendorp Price Sensitivity Meter
Four questions:
1. "At what price would this be so cheap you'd question quality?"
2. "At what price would this be a bargain?"
3. "At what price would this start to feel expensive?"
4. "At what price would this be too expensive to consider?"

Plot responses to find:
- **Acceptable price range**: between "too cheap" and "too expensive" crossovers
- **Optimal price point**: intersection of "bargain" and "expensive" curves

### Gabor-Granger
Present fixed price points to segments. Ask: "Would you buy at $X/month?"
Calculate demand curve. Find revenue-maximizing price.

### Conjoint Analysis
Show customers trade-offs between price and feature bundles. Reveals willingness to pay for specific features.

### Rule of Thumb
- Van Westendorp for early-stage directional data
- Gabor-Granger for demand curve with existing customer base
- Conjoint for packaging decisions with established products

## 3-Tier Packaging Template

| | Starter | Pro | Enterprise |
|-|---------|-----|------------|
| **Target** | Individuals / small teams | Growing teams | Large orgs |
| **Price** | $X/mo | $3X/mo | Custom |
| **Seats** | Up to 3 | Up to 25 | Unlimited |
| **Core features** | ✓ | ✓ | ✓ |
| **Advanced features** | — | ✓ | ✓ |
| **Admin controls** | — | Basic | Advanced |
| **SSO / SCIM** | — | — | ✓ |
| **SLA / support** | Community | Email | Dedicated CSM |
| **Data retention** | 30 days | 1 year | Custom |

### Tier Design Rules
- Middle tier should be the revenue maximizer (highest conversion × highest value)
- Enterprise tier is always "contact sales" — use to learn before pricing
- Starter → Pro upgrade should feel obvious, not punishing
- Limit to 3 tiers; more creates paralysis

## Competitive Pricing Response Playbook

| Scenario | Response |
|----------|---------|
| Competitor cuts price | Do not match immediately; research if they're winning deals on price |
| Competitor raises price | Opportunity to position as better value; may allow your own increase |
| New low-cost entrant | Protect enterprise with value story; let free tier compete at low end |
| Race to zero | Shift to usage-based or outcomes-based model to break the comparison |

### Price Positioning Options
- **Premium**: Higher price signals quality; requires differentiation evidence
- **Value**: Slightly below leader, emphasize ROI
- **Penetration**: Low to gain share; plan path to profitability

## Price Increase Playbook

### Pre-Increase Preparation
1. Segment customers by plan, tenure, expansion potential
2. Identify champions (power users who can advocate internally)
3. Prepare value story: what have you shipped since last pricing?
4. Draft FAQ: "Why is the price increasing?"
5. Decide on grandfather policy (existing customers locked for X months?)

### Communication Template
```
Subject: Changes to [Product] pricing

Hi [Name],

We're updating our pricing on [date]. Here's what's changing:
[Old price] → [New price] for [plan name].

Why: [Value delivered — features shipped, infrastructure improved, support added]

Your options:
- Annual plan: lock in current pricing for 12 months (save X%)
- Stay on monthly: new price applies on [date]
- Downgrade: [link]

Questions? Reply to this email — our team will help.

[Name]
```

### Grandfather Policy
- 3-6 month grace period for existing customers is standard
- Annual customers: honor rate until renewal
- Avoid indefinite grandfathering — it creates pricing complexity forever

## Self-Serve vs Sales-Assisted Pricing

| Scenario | Self-serve | Sales-assisted |
|----------|-----------|----------------|
| ACV < $5k/year | ✓ | |
| ACV $5k–$25k | Hybrid | Hybrid |
| ACV > $25k | | ✓ |
| Complex procurement | | ✓ |
| High-volume, simple product | ✓ | |

### Enterprise Pricing Dynamics
- List price is a starting point — expect 20-40% negotiation
- Annual commitment in exchange for discount (15-30%)
- Multi-year deal for larger discount
- Pilot/POC before full deployment
- Legal / security review adds 4-8 weeks to deal cycle