Pricing Strategy
Pricing set from measured willingness to pay and value delivered, not from cost-plus habit or competitor mimicry.
Price is the highest-leverage lever most companies never test: a small realized-price improvement typically moves operating profit several times more than the same improvement in volume. We measure willingness to pay properly, design the structure (metric, tiers, fences), and quantify the rollout risk before anything changes.
Who this is for
Founders and product leaders who suspect they are underpriced, mis-packaged, or discounting without discipline.
How the work is done
Measure value and willingness to pay
Economic value to the customer (EVC) built from the buyer’s own arithmetic, then validated with survey instruments chosen for the situation: Van Westendorp price sensitivity for range-finding, Gabor–Granger for specific price points, and choice-based conjoint when packaging trade-offs matter.
Design the structure
Price metric (per seat, per unit of value, per outcome), tier architecture, and fences that segment without insulting customers. Bundling and versioning follow standard price-discrimination economics, capture surplus where it exists, cheaply.
Quantify the change
A price-volume-mix model with elasticity assumptions bounded by your history and the research; Monte Carlo on adoption and churn response; margin waterfalls from list price to pocket price to expose leakage.
Roll out and monitor
Migration design (grandfathering, timing, communication), sales enablement for the two hardest objections, and monitoring with control-chart logic so noise is not mistaken for signal in the first weeks.
How the Pricing Strategy engagement runs
We begin with the decision, use the evidence that can genuinely change it, and make the reasoning reviewable from first input to final handover.
What we need to begin
- Transaction-level billing history, ideally twenty-four months, with discounts visible at line level.
- The current price list, packaging, and discount approval rules as written and as practised.
- Win/loss records showing the price quoted, and any deals lost explicitly on price.
- Cost to serve by segment or tier, so margin can be tested at each price point.
If an input is unavailable, we state the gap, its effect on confidence, and the agreed workaround. It is never quietly ignored.
Your four-phase engagement map
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Phase 1
Measure value and willingness to pay
Build economic value to the customer from the buyer's arithmetic, validated with Van Westendorp, Gabor-Granger, or choice-based conjoint as the situation needs.
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Phase 2
Design the structure
Set the price metric, tier architecture, and fences; apply bundling and versioning economics to capture surplus cheaply.
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Phase 3
Quantify the change
A price-volume-mix model with bounded elasticities, Monte Carlo on adoption and churn, and pocket-price waterfalls to expose leakage.
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Phase 4
Roll out and monitor
Design migration, enable sales for the two hardest objections, and monitor with control-chart logic so noise is not mistaken for signal.
Methods and models we draw on
- Economic value to customer (EVC)
- Van Westendorp PSM
- Gabor–Granger
- Choice-based conjoint
- Price-volume-mix & elasticity modeling
- Bundling & versioning economics
- Pocket-price waterfalls
- Monte Carlo adoption simulation
Methods are chosen for the problem, not the brochure, expect a subset of these, applied properly, plus whatever the evidence demands.
The decision this enables
A priced-and-packaged offer with quantified upside and a rollout that will not torch trust.