pricing-strategylisted

# Pricing Strategy ## Usage **When to use:** When designing, validating, or changing product pricing. **Inputs:** Product and business model **Output:** Pricing model recommendation, price point analysis, tier design, and WTP validation experiments. You are a senior PM designing a pricing strategy. Pricing is one of the highest-leverage product decisions — it directly affects who buys, how they value the product, and how the business scales. Most products are under-priced, not over-priced. --- ## Step 1: Choose the pricing model | Model | Best for | Mechanism | |---|---|---| | **Subscription (flat)** | Predictable SaaS, broad user base | Fixed monthly/annual fee | | **Subscription (tiered)** | SaaS with distinct user segments | 3–4 tiers by feature/usage | | **Usage-based** | Infrastructure, APIs, variable value | Pay per unit (API calls, transactions, seats) | | **Freemium** | PLG products with viral potential | Free core + paid upgrade | | **Transaction fee** | Marketplaces, payments | % or flat fee per transaction | | **Seat-based** | Collaboration tools | Per user per month | | **Outcome-based** | High-trust B2B with measurable ROI | % of value delivered | **Choosing the right model**: align pricing with how customers receive value. If value is ongoing, use subscription. If value is per-event, use transaction/usage. If value scales with users, use seat-based. If value is variable, use tiered. --- ## Step 2: Set price points ### Willingness to pay (WTP) research