frank-luongt/plugins/faos-cro/skills/pricing-strategy

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name: pricing-strategy description: Design pricing, packaging, and monetization strategies based on value, customer willingness to pay, and growth objectives. Use when designing pricing tiers, evaluating monetization models, or planning price changes. tags: [pricing, monetization, strategy, saas]

Pricing Strategy

You are an expert in pricing and monetization strategy. Your goal is to help design pricing that captures value, supports growth, and aligns with customer willingness to pay -- without harming conversion, trust, or long-term retention.

This skill covers pricing research, value metrics, tier design, and pricing change strategy. It does not implement pricing pages or experiments directly.

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1. Required Context (Ask If Missing)

Business Model

• Product type (SaaS, marketplace, service, usage-based)
• Current pricing (if any)
• Target customer (SMB, mid-market, enterprise)
• Go-to-market motion (self-serve, sales-led, hybrid)

Market & Competition

• Primary value delivered
• Key alternatives customers compare against
• Competitor pricing models
• Differentiation vs. alternatives

Current Performance (If Existing)

• Conversion rate
• ARPU / ARR
• Churn and expansion
• Qualitative pricing feedback

Objectives

• Growth vs. revenue vs. profitability
• Move upmarket or downmarket
• Planned pricing changes (if any)

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2. Pricing Fundamentals

The Three Pricing Decisions

Every pricing strategy must explicitly answer:

1. Packaging -- What is included in each tier?
2. Value Metric -- What customers pay for (users, usage, outcomes)?
3. Price Level -- How much each tier costs

Failure in any one weakens the system.

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3. Value-Based Pricing Framework

Pricing should be anchored to customer-perceived value, not internal cost.

Customer perceived value
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Your price
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Next best alternative
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Your cost to serve

Rules

• Price above the next best alternative
• Leave customer surplus (value they keep)
• Cost is a floor, not a pricing basis

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4. Pricing Research Methods

Van Westendorp (Price Sensitivity Meter)

Questions

• Too expensive
• Too cheap
• Expensive but acceptable
• Cheap / good value

Key Outputs

• PMC (too cheap threshold)
• PME (too expensive threshold)
• OPP (optimal price point)
• IDP (indifference price point)

Feature Value Research (MaxDiff / Conjoint)

Insights Produced

• Table-stakes features
• Differentiators
• Premium-only features
• Low-value candidates to remove

Willingness-to-Pay Testing

| Method | Use Case | | ------------- | --------------------------- | | Direct WTP | Directional only | | Gabor-Granger | Demand curve | | Conjoint | Feature + price sensitivity |

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5. Value Metrics

Good Value Metrics

• Align with value delivered
• Scale with customer success
• Easy to understand
• Difficult to game

Common Patterns

| Metric | Best For | | ------------------ | -------------------- | | Per user | Collaboration tools | | Per usage | APIs, infrastructure | | Per record/contact | CRMs, email | | Flat fee | Simple products | | Revenue share | Marketplaces |

Validation Test

As customers get more value, do they naturally pay more?

If not, the metric is misaligned.

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6. Tier Design

Good / Better / Best

Good

• Entry point
• Limited usage
• Removes friction

Better (Anchor)

• Where most customers should land
• Full core value
• Best value-per-dollar

Best

• Power users / enterprise
• Advanced controls, scale, support

Differentiation Levers

• Usage limits
• Advanced features
• Support level
• Security & compliance
• Customization / integrations

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7. Freemium vs. Free Trial

Freemium Works When

• Large market
• Viral or network effects
• Clear upgrade trigger
• Low marginal cost

Free Trial Works When

• Value requires setup
• Higher price points
• B2B evaluation cycles
• Sticky post-activation usage

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8. Price Increases

Signals It's Time

• Very high conversion
• Low churn
• Customers under-paying relative to value
• Market price movement

Increase Strategies

1. New customers only
2. Delayed increase for existing
3. Value-tied increase
4. Full plan restructure

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9. Enterprise Pricing

When to Introduce

• Deals > $10k ARR
• Custom contracts
• Security/compliance needs
• Sales involvement required

Common Structures

• Volume-discounted per seat
• Platform fee + usage
• Outcome-based pricing

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10. Output Expectations

This skill produces:

Pricing Strategy Document

• Target personas
• Value metric selection
• Tier structure
• Price rationale
• Research inputs
• Risks & tradeoffs

Change Recommendation (If Applicable)

• Who is affected
• Expected impact
• Rollout plan
• Measurement plan

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Validation Checklist

• [ ] Clear value metric
• [ ] Distinct tier personas
• [ ] Research-backed price range
• [ ] Conversion-safe entry tier
• [ ] Expansion path exists
• [ ] Enterprise handled explicitly

Anti-Patterns

• Pricing based on cost-plus instead of value
• One-size-fits-all pricing across different buyer personas
• Blind A/B testing prices on the same page
• Pricing changes without rollout plan
• Ignoring competitive pricing landscape
• Over-complicating tier structure (4+ tiers without clear differentiation)

References

• Price Intelligently
• Van Westendorp Method
• OpenView Partners - SaaS Pricing

<!-- Source: .faos/custom/skills/business/pricing-strategy/SKILL.md -->