# Pricing Strategy > Set or revise pricing for any product by triangulating value, competition, and cost floor into a recommended structure, price points, and a test plan. Use when someone asks "what should I charge", "how do I price my product", "are we priced too low", "should we go usage-based or flat", or is preparing a repricing or a new-product launch. Do NOT use for designing SaaS tier ladders, value metrics, and expansion packaging in detail - use saas-pricing instead; for gym front-end offers and guarantees use gym-pricing-and-guarantees; for checking whether the resulting price produces healthy CAC payback use unit-economics. - Skill: `skillmedev/pricing-strategy` (Agent Skill) - Install (CLI): `npx skillmds@latest add skillmedev/pricing-strategy` - Raw SKILL.md: https://api.skillmd.com/api/skills/skillmedev/pricing-strategy/raw - Safety review: pending - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: Coding & Dev Tools - Author: SkillMedev (https://skillmd.com/u/skillmedev) - Updated: 2026-09-17 - Page: https://skillmd.com/skills/skillmedev/pricing-strategy --- # Pricing Strategy Price is positioning: it tells the market what the product is worth before anyone uses it. The costly mistake this skill prevents is defaulting to cost-plus or copying a competitor's number - pricing is usually the least-tested lever in the business, and underpricing quietly donates margin the founder never gets back. Anchor on the value delivered, then sanity-check against competition and cost. ## Operating procedure Work the steps in order. Value must be quantified before a structure makes sense, and the structure must be chosen before individual price points mean anything. ### Step 1: Gather inputs Collect these before recommending anything. Where the user cannot answer, apply the default and label the number a guess. 1. Buyer segments: who buys, split by size, use case, or urgency. Default: assume two segments - a self-serve smaller buyer and a larger buyer with real budget. 2. The measurable outcome per segment: hours saved, revenue gained, cost avoided, risk removed - in the customer's units, not the product's. 3. What the realistic alternatives cost: direct competitors, a spreadsheet, a hire, or doing nothing. 4. Variable cost to deliver one unit (this is only the floor input, never the anchor). 5. The growth vector: does a customer's value grow through more people using it, more volume flowing through it, or more capability unlocked? 6. If already selling: current price, win rate, and how often price objections actually come up. ### Step 2: Quantify willingness to pay by segment Quantify value in the customer's terms (time saved, revenue gained). "Saves each account manager 10 hours a month" times a loaded hourly cost is a dollar figure; "makes reporting easier" is not. Do this per segment - a freelancer and a 50-person agency capture different value from the same feature, and that difference is what tiers monetize later. When value cannot be computed directly, run a Van Westendorp price-sensitivity survey on 15 or more real prospects (the four questions: at what price is this too cheap to trust, a bargain, getting expensive, too expensive). The acceptable price range sits between the marginal-cheapness and marginal-expensiveness crossings. Label survey-derived numbers as directional, not exact. ### Step 3: Apply the three lenses - Value-based: the ceiling and the story. Rule of thumb: charge about one-tenth of the quantified value (the 10x value-to-price rule) so the customer keeps an obvious surplus; 10-25% of value captured is defensible when the value is provable and switching costs are real. - Competitive: what alternatives charge, and how the product is differentiated. If the value lens supports a price far above competitors and there is no differentiation story to carry it, that is a positioning problem, not a pricing one. - Cost-plus: the floor only - never price below sustainable margin, and never anchor on cost. Pricing on cost alone leaves value on the table by construction. ### Step 4: Choose the structure to match the growth vector Per-seat, usage-based, tiered, or flat - match how the customer perceives and grows value: - Value grows with headcount → per-seat. Simple to budget, but revenue caps with the customer's team size. - Value grows with volume → usage-based, with a predictability guardrail (committed tiers or caps) so finance can budget it. - Distinct willingness-to-pay segments → tiered; gate the features that matter to larger buyers, not the features that cost the most to build. - Value is flat regardless of scale → flat price; compete on simplicity. Keep the entry point low-friction and create one clear reason to move up. If the recommendation is a multi-tier SaaS ladder, hand the detailed tier design, value metric, and expansion packaging to saas-pricing. ### Step 5: Set the price points - B2B: round, confident numbers ($50, $200, $1,500). Odd charm prices ($49.99) read as consumer. - Consumer or self-serve prosumer: charm endings and a visible anchor ("$29, normally $49") pull weight. - Show the highest tier first or alongside - it anchors everything below as reasonable. - Keep price gaps between adjacent tiers around 2-2.5x; smaller gaps make upgrades feel pointless, larger ones feel like a cliff. ### Step 6: Write the testing plan - Test new prices on new customers only; never surprise existing ones. - Watch the objection rate: if fewer than roughly 20% of deals raise any price objection, the product is underpriced - raise until some deals push back. - Judge a price test on close rate and 90-day retention together, not signup conversion alone; a cheaper price that attracts churny customers is a loss. - Recommend exactly one structure with the reasoning, plus the single next test. ## Worked example: SaaS reporting tool for marketing agencies - Value quantified: each account manager spends ~10 hours/month building client reports; loaded cost $55/hour → $550/month of value per AM. - 10x rule → ~$55/AM/month ceiling zone; capture 10-25% → $55-$135 per AM is the defensible band. - Competitive lens: incumbent dashboards run $99-$299/month flat; most agencies use spreadsheets (cost: the 10 hours). - Cost floor: ~$6/account/month in infrastructure - irrelevant to the anchor, confirms huge margin room. - Growth vector: value grows with number of client accounts managed, not seats → tiered on client accounts. - Recommendation: Starter $59/month (5 client accounts), Agency $149/month (20 accounts, white-label reports gated here because larger agencies need them), Scale $349/month (unlimited, API). Round numbers, ~2.4x gaps, entry under the value of two saved hours. - Next test: raise Agency to $179 for new signups and watch objection rate and 90-day retention. ## Deliverable Produce a pricing recommendation containing: the quantified value per segment (with guesses labeled), the three-lens readout (ceiling, competitive band, floor), one recommended structure with the growth-vector reasoning, specific price points, and the single next price test with its success metric. ## Do NOT - Do not price from cost - cost is a floor check, and anchoring there guarantees leaving value uncaptured. - Do not copy a competitor's price without their positioning; the number only works attached to their story. - Do not present three structures and let the user choose - recommend one, with reasoning, plus what to test next. - Do not charge by a metric the customer wants to minimize; it makes success feel like punishment. - Do not run a price test judged on signup conversion alone; cheap prices convert churn. ## Quality bar - Value is expressed in the customer's units with a dollar translation, or explicitly labeled as unquantifiable with Van Westendorp as the fallback. - Every number is sourced or labeled a guess. - The recommended price sits inside the 10-25%-of-value band or the deviation is justified in writing. - The structure maps to a named growth vector. - A testing plan with one concrete next test is included. ## Escalation This is strategy, not financial advice on the business's viability. For SaaS tier ladders, value metrics, and net-revenue-retention packaging, route to saas-pricing. For gym offers, route to gym-pricing-and-guarantees. To verify the chosen price yields healthy CAC payback and LTV:CAC, route to unit-economics.