pricing-strategy

Evaluate models against your product type: per-seat fits collaboration tools, usage-based fits APIs and infrastructure, tiered fits segmented user bases, and freemium fits products with network effects. Base the choice on your value metric and how customers perceive delivered value.

Map each competitor's tiers and included features, then position your product as premium, mid-market, or budget. Look for pricing gaps in the market and document industry conventions before setting your own structure.

Van Westendorp uses four survey questions—too cheap, cheap, expensive, too expensive—to identify an acceptable price range from customer responses. It requires survey data; without it, estimate sensitivity from competitor pricing and quantified value delivered.

Freemium works when your product has viral loops or network effects, like Spotify or Notion. Pure paid plans fit products with high per-user costs or narrow enterprise audiences where free users add little strategic value.

Run A/B tests on pricing pages with different price points and tier names, test willingness to pay through founder-led sales conversations, and analyze conversion by cohort across price points before committing to a change.