# Pricing strategy
Use this method to connect price to buyer value, market behavior, unit economics, alternatives, and delivery constraints. Treat every proposed price as a hypothesis until buyer and financial evidence supports it.
This package preserves the pricing-power, commercial-model, and analyst- synthesis parts of the original combined family. Use the separate market adjacency analysis method when the request also needs a three-horizon adjacency scan, customer/capability/channel vectors, or the budget-line test.
Read `references/host-operations.md` only when current external evidence must be collected. If research access is unavailable, use supplied evidence, identify coverage gaps, and do not claim current competitor or benchmark coverage.
Choose the commercial lens
Choose the unit being priced before comparing evidence:
- **Product:** subscription, seat, usage, transaction, outcome, platform, or hybrid product value. - **Services:** engagement, retainer, project, or managed-service value plus delivery capacity and cost. - **Operator:** price realization and margin durability inside a business being built, acquired, or operated.
State the buyer, job, outcome, unit, scope, term, implementation work, recurring service, discounts, exclusions, and alternatives. Do not compare unmatched periods or a product list price with a differently scoped service.
Method
1. **Frame the evidence.** Record source, date, buyer segment, geography, scope, and whether each price is public list, quoted, transacted, modeled, or unknown. Note the newest and oldest important inputs and any freshness gap. 2. **Assess pricing power from behavior.** Examine gross-margin norms, ACV or price dispersion, discount behavior, sales cycle, switching costs, multi-year contracts, retention and expansion, workflow integration, churn, and price movement. Opaque pricing can be a signal of segmentation or negotiation, but it is not proof of pricing power without corroboration. Feature parity, aggressive free tiers, high churn, and falling ACV are counter-signals. 3. **Define the value exchange.** State the buyer problem, credible outcome, incumbent or manual alternative, and why the buyer would change. Separate observed willingness to pay from stated preference, competitor price, and modeled value. 4. **Choose a value metric.** Test whether a seat, usage unit, transaction, outcome, platform fee plus consumption, or hybrid tracks value, is understandable and measurable, and is difficult to game. Explain where the metric fails. Do not pass through a supplier cost merely because it is easy to meter when buyers value an outcome or completed workflow. 5. **Choose the research method.** Use Van Westendorp to estimate an acceptable range and resistance points, or Gabor-Granger to estimate demand at explicit prices, only when the category is nascent, the pricing model is changing, or there is access to a sufficiently large and cleanly segmented buyer sample. The source method used roughly 500 qualified respondents as a working floor. Do not pool materially different buyer segments. In established categories, prefer matched public-company and market evidence and triangulate the 25th, 50th, and 75th percentile of comparable prices or ACVs. 6. **Design a small set of packages or price points.** State inclusions, exclusions, implementation and service assumptions, buyer segment, and expansion path for each. Keep product, service, and operator economics separate. 7. **Check economics.** Show cost to serve, gross-margin or contribution assumptions, sales effort, capacity, payment timing, discounting, adoption, and sensitivity. Preserve ranges and conflicts rather than manufacturing a single optimum. 8. **Triangulate market evidence.** Treat vendor and sponsored material as positioning evidence that needs independent corroboration. Use reviews for buyer experience, filings and attributable transactions for economics, and analyst sources with their inclusion criteria, sponsorship, and evaluation date visible. Compare at least three independent analyst or market views when claiming a consensus, and surface disagreement rather than averaging it. 9. **Set a controlled validation.** Choose customer conversations, quote tests, package comparisons, or a bounded experiment. Define the success, stop, and revision signals before running it.
Output
Return
- decision, commercial lens, evidence coverage, and assumptions; - pricing-power score from 1–5 with the three signals that drive it; - value metric and commercial-model rationale; - packages or price hypotheses with matched-scope economics; - risks, sensitivity, and controlled validation plan; - concise analyst or market consensus with material disagreements when that evidence was used; - family confidence from 1–5 with the limiting factor: recency, source independence, triangulation, or sensitivity; - sources.
Capture source URLs while researching. Cite each non-trivial external claim at the point of use, reproduce every source in a Sources section, tag each source as vendor-published, analyst-independent, analyst-sponsored, industry-press, academic, customer-reported, primary-interview, or another clearly defined type, and verify every URL-to-claim pairing before finalizing. Do not invent ROI, willingness to pay, margin, or a revenue-maximizing price. This method does not approve a quote, discount, contract, billing change, publication, or third-party contact.