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
1---2name: pricingstrategy3description: 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.4---56# Pricing Strategy78You 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.910## Before Starting1112Gather this context:1314### 1. Business Context15- What type of product? (SaaS, marketplace, e-commerce, service)16- What's your current pricing (if any)?17- What's your target market? (SMB, mid-market, enterprise)18- What's your go-to-market motion? (self-serve, sales-led, hybrid)1920### 2. Value & Competition21- What's the primary value you deliver?22- What alternatives do customers consider?23- How do competitors price?2425### 3. Current Performance26- What's your current conversion rate?27- What's your ARPU and churn rate?28- Any feedback on pricing from customers/prospects?2930---3132## The Three Pricing Axes3334**1. Packaging** — What's included at each tier?35**2. Pricing Metric** — What do you charge for? (per user, per usage, flat fee)36**3. Price Point** — The actual dollar amounts3738---3940## Value-Based Pricing Framework4142Price between the next best alternative and perceived value. Cost is a floor, not a basis.4344```45Customer's perceived value $100046 ↑ Value captured47Your price $50048 ↑ Consumer surplus49Next best alternative $30050 ↑ Differentiation51Your cost to serve $5052```5354---5556## Pricing Research Methods5758### Van Westendorp Price Sensitivity Meter5960**The Four Questions:**611. At what price would it be so expensive you wouldn't consider it?622. At what price would you question its quality (too cheap)?633. At what price is it starting to get expensive, but you'd still consider it?644. At what price would it be a great bargain?6566**Key intersections:**67- Point of Marginal Cheapness (PMC): Too cheap × Expensive68- Point of Marginal Expensiveness (PME): Too expensive × Cheap69- Optimal Price Point (OPP): Too cheap × Too expensive70- Indifference Price Point (IDP): Expensive × Cheap7172**Acceptable price range:** PMC to PME73**Optimal zone:** Between OPP and IDP7475### MaxDiff Analysis7677Show sets of 4-5 features, ask which is MOST and LEAST important. Produces feature importance scores for packaging decisions.7879---8081## Value Metrics8283### Common Value Metrics8485| Metric | Best For | Example |86|--------|----------|---------|87| Per user/seat | Collaboration tools | Slack, Notion |88| Per usage | Variable consumption | AWS, Twilio |89| Per contact/record | CRM, email tools | Mailchimp |90| Per transaction | Payments, marketplaces | Stripe |91| Flat fee | Simple products | Basecamp |9293**Good value metrics:**94- Align price with value delivered95- Easy to understand96- Scale as customer grows97- Hard to game9899---100101## Tier Structure102103### Good-Better-Best Framework104105**Good tier (Entry):** Core features, limited usage, low price106**Better tier (Recommended):** Full features, reasonable limits, anchor price107**Best tier (Premium):** Everything + advanced, 2-3x Better price108109### Tier Differentiation Strategies110111- **Feature gating:** Basic vs. advanced features112- **Usage limits:** Same features, different limits113- **Support level:** Email → Priority → Dedicated114- **Access:** API, SSO, custom branding115116---117118## Freemium vs. Free Trial119120### Freemium Works When:121- Product has viral/network effects122- Free users provide value (content, data, referrals)123- Low marginal cost to serve124- Clear upgrade trigger125126### Free Trial Works When:127- Product needs time to demonstrate value128- Setup investment required129- Higher price points130- Product is sticky once configured131132**Credit card upfront:** Higher conversion (40-50% vs. 15-25%), lower volume, better qualified leads133134---135136## When to Raise Prices137138**Signs it's time:**139- Competitors have raised prices140- Prospects don't flinch at price141- Very high conversion rates (>40%)142- Very low churn (<3%)143- You've added significant value144145**Strategies:**1461. Grandfather existing customers1472. Delayed increase with lock-in period1483. Increase tied to new features1494. Complete plan restructure150151---152153## Pricing Page Best Practices154155- Clear tier comparison table156- Recommended tier highlighted157- Monthly/annual toggle with savings callout158- FAQ section159- Contact sales option for enterprise160161**Psychology:**162- Anchoring: Show higher-priced option first163- Decoy effect: Middle tier obviously best value164- Charm pricing: $49 vs $50 (for value-focused)165- Round pricing: $50 vs $49 (for premium)166167---168169## Questions to Ask1701711. What pricing research have you done?1722. What's your current ARPU and conversion rate?1733. What's your primary value metric?1744. Who are your pricing personas?1755. Are you self-serve, sales-led, or hybrid?176177---178179## Related Skills180181- **PageCro**: For optimizing pricing page conversion182- **Copywriting**: For pricing page copy183- **MarketingPsychology**: For pricing psychology principles184- **AbTestSetup**: For testing pricing changes
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