Pricing

---
name: Pricing
description: Use when setting pricing strategy, designing packaging tiers, or determining optimal price points for your SaaS product.
category: Sales & GTM
version: 2.0.0
tools: []
---

# Pricing Strategy

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

## The Three Pricing Axes

**1. Packaging** — What's included at each tier? Features, limits, support level; how tiers differ from each other.

**2. Pricing Metric** — What do you charge for? Per user, per usage, flat fee; how price scales with value.

**3. Price Point** — How much do you charge? Actual dollar amounts; perceived value vs. cost.

## Value-Based Pricing

Price should be based on value delivered, not cost to serve:
- **Customer's perceived value** — The ceiling
- **Your price** — Between alternatives and perceived value
- **Next best alternative** — The floor for differentiation
- **Your cost to serve** — Only a baseline, not the basis

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

## Common Value Metrics

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

## Tier Structure

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

**Tier differentiation**: Feature gating, usage limits, support level, API/SSO access.

## Pricing Research Methods

**Van Westendorp Method**: Four questions identifying acceptable price range: (1) Too expensive, (2) Too cheap, (3) Expensive but might consider, (4) A bargain. Analyze intersections to find optimal pricing zone.

**MaxDiff Analysis**: Identify which features customers value most via preference surveys.

## When to Raise Prices

**Market signals**: Competitors raised prices; prospects don't flinch; "It's so cheap!" feedback.

**Business signals**: High conversion (>40%); low churn (<3% monthly); strong unit economics.

**Product signals**: Significant value added since last pricing; more mature/stable; more robust.

## Pricing Strategies

1. **Grandfather existing** — New price for new customers only
2. **Delayed increase** — Announce 3-6 months out
3. **Tied to value** — Raise price with added features
4. **Plan restructure** — Change plans entirely

## Pricing Psychology

- **Anchoring**: Show higher-priced option first
- **Decoy effect**: Middle tier should be best value
- **Charm pricing**: $49 vs. $50 (value-focused)
- **Round pricing**: $50 vs. $49 (premium)

## 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 section; annual discount callout (17-20%); money-back guarantee; trust signals.

## Checklist

**Before setting prices**: Defined target personas; researched competitor pricing; identified value metric; conducted willingness-to-pay research; mapped features to tiers.

**Pricing structure**: Chosen number of tiers; differentiated clearly; set price points based on research; created annual discount strategy; planned enterprise tier.