pricing-strategy

Choose a value metric by asking whether customers get more value as they use more of that metric. Common options include per user for collaboration tools, per usage for variable consumption, and per transaction for payments. The metric should align price with value, be easy to understand, and scale as customers grow.

Use the Van Westendorp price sensitivity meter, which asks four questions about price thresholds to identify an acceptable price range and optimal price point. MaxDiff analysis identifies which features customers value most, informing tier packaging. Aim for 100-300 survey respondents for reliable data.

Freemium works when the product has viral effects, free users provide value, and marginal serving costs are low. Free trials work better for products needing time to demonstrate value, B2B buying committees, and higher price points. Hybrid approaches like reverse trials combine both.

Raise prices when conversion rates exceed 40%, monthly churn is below 3%, prospects don't flinch at pricing, or significant value has been added since the last change. Use strategies like grandfathering existing customers, announcing increases 3-6 months ahead, or tying the increase to new features.

Three tiers is the industry standard: an entry tier to remove barriers, a recommended middle tier where most customers land, and a premium tier at 2-3x the middle price. Four or more tiers add granularity for wide customer ranges but risk decision paralysis.

No, this skill focuses on pricing decisions like what to charge and how to package plans, not page design. For pricing page conversion optimization including CTA placement and trust signals, use the page-cro skill instead.