Pricing Strategy Skill

Build pricing that reflects value delivered — not cost to build. Structure every pricing decision with customer segmentation, value metric identification, competitive context, and a packaging recommendation.

Pricing Foundations

Three questions to answer before any pricing decision:

1. Who is our buyer? (Role, company size, willingness to pay)
2. What value do we deliver? (Quantifiable outcome — time saved, revenue generated, risk reduced)
3. What is our pricing model? (Per seat, usage-based, flat, hybrid)

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Pricing Models

Model	Best For	Risk
Per Seat	Collaboration tools, team software	Disincentivises adoption as team grows
Usage-Based	APIs, infrastructure, consumption tools	Revenue unpredictability for both sides
Flat Rate	Simple tools, early-stage	Leaves money on table from power users
Tiered	Products with clear user segments	Feature gatekeeping frustrates users
Freemium	Viral/PLG products with low marginal cost	Conversion to paid is hard to engineer
Value-Based	Enterprise, outcomes-driven products	Requires strong ROI story

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Freemium Decision Framework

Use freemium when:

• ✅ Marginal cost per free user is near zero
• ✅ Product is inherently viral (network effects or sharing)
• ✅ Free tier creates genuine value (not just a demo)
• ✅ Clear upgrade trigger exists (feature, volume, or team size)
• ✅ Conversion benchmark is realistic (2–5% free-to-paid is typical)

Avoid freemium when: