pricing

Choose a value metric that scales with the value customers receive, such as per seat for collaboration tools or per usage for consumption products. Then structure tiers with a good-better-best framework and set price points based on willingness-to-pay research rather than cost.

A value metric is what you charge for, such as per user, per usage, per contact, or per transaction. A good value metric aligns price with value delivered, is easy to understand, scales as the customer grows, and is hard to game.

Raise prices when prospects do not flinch at your price, conversion exceeds 40%, monthly churn is under 3%, or you have added significant value. Test on new customers first, then roll out to existing customers in staggered waves of 5 to 10%.

Van Westendorp asks four questions about prices that are too expensive, too cheap, expensive but acceptable, and a bargain. Analyzing the intersections of the response curves identifies the optimal acceptable price range for your product.

Avoid ultra-low or careless free pricing, which creates false traction from users who would never pay a real price. The cheapest customers churn most and complain loudest, so start near a round number matching your target segment instead.

Buyers increasingly ask ChatGPT or Perplexity what tools cost before visiting your site. If prices are locked in images or behind contact forms, agents cannot quote them and you lose deals. Test by pasting your pricing URL into a browsing-capable AI.