New 15 more skills
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name: pricing-strategy
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description: Structures pricing strategy decisions, packaging options, and pricing page design for SaaS and digital products. Use when reviewing or setting pricing, designing pricing tiers, evaluating freemium vs paid, or preparing a pricing change. Triggers on "pricing strategy", "pricing tiers", "freemium", "pricing page", "how should we price", "pricing change".
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# Pricing Strategy Skill
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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.
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## Pricing Foundations
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Three questions to answer before any pricing decision:
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1. **Who is our buyer?** (Role, company size, willingness to pay)
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2. **What value do we deliver?** (Quantifiable outcome — time saved, revenue generated, risk reduced)
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3. **What is our pricing model?** (Per seat, usage-based, flat, hybrid)
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## Pricing Models
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| Model | Best For | Risk |
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|---|---|---|
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| **Per Seat** | Collaboration tools, team software | Disincentivises adoption as team grows |
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| **Usage-Based** | APIs, infrastructure, consumption tools | Revenue unpredictability for both sides |
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| **Flat Rate** | Simple tools, early-stage | Leaves money on table from power users |
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| **Tiered** | Products with clear user segments | Feature gatekeeping frustrates users |
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| **Freemium** | Viral/PLG products with low marginal cost | Conversion to paid is hard to engineer |
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| **Value-Based** | Enterprise, outcomes-driven products | Requires strong ROI story |
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## Freemium Decision Framework
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Use freemium when:
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- ✅ Marginal cost per free user is near zero
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- ✅ Product is inherently viral (network effects or sharing)
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- ✅ Free tier creates genuine value (not just a demo)
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- ✅ Clear upgrade trigger exists (feature, volume, or team size)
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- ✅ Conversion benchmark is realistic (2–5% free-to-paid is typical)
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Avoid freemium when:
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- ❌ Support cost per free user is high
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- ❌ No natural upgrade trigger in the product
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- ❌ Core value requires features you'd need to gate
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---
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## Packaging / Tiering Framework
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Recommended 3-tier structure for SaaS:
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| Tier | Target | Price Signal | Key Features | Lock-in Mechanism |
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|---|---|---|---|---|
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| **Free / Starter** | Individual, early discovery | $0 | Core value, usage-limited | Invite colleagues, export limit |
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| **Pro / Growth** | SMB, growing teams | $[X]/seat/mo | Full features, higher limits | Team collaboration, integrations |
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| **Business / Enterprise** | Mid-market, enterprise | $[X]/seat/mo or custom | Admin, SSO, SLAs, dedicated support | Security, compliance, volume |
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Tier design rules:
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- Each tier should be genuinely sufficient for its target segment
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- The upgrade trigger should be felt naturally — not manufactured
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- Price jumps of 3–5x between tiers are normal and defensible
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---
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## Competitive Pricing Context
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| Competitor | Model | Price | Key Differentiator |
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|---|---|---|---|
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| [Name] | [Model] | [Price] | [What they lead with] |
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Positioning options:
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- **Premium:** Price 20–40% above market. Justify with enterprise features, support, or brand.
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- **Parity:** Match the market leader. Win on product or distribution.
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- **Value:** Price below market. Win on volume. Dangerous without strong unit economics.
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---
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## Output Format
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### Pricing Strategy Recommendation — [Product] — [Date]
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**Current State:** [What pricing exists today, if any]
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**Problem to Solve:** [Why pricing is being reviewed]
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**Recommended Pricing Model:** [Model name + rationale]
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**Value Metric:** [The single unit that scales with customer value — e.g., "active users", "API calls", "documents processed"]
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**Proposed Tiers:**
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[Table using 3-tier structure above]
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**Free-to-Paid Upgrade Trigger:** [Specific moment or threshold that creates natural upgrade pressure]
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**Competitive Position:** [Premium / Parity / Value + reasoning]
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**Pricing Change Rollout (if applicable):**
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- Grandfathering: [Yes / No — recommendation and rationale]
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- Communication plan: [How to tell customers + timing]
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- Rollback plan: [Under what conditions you'd revert]
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**Risks:**
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- [Risk] → Mitigation: [Action]
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**Metrics to Monitor Post-Change:**
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- Conversion rate (free to paid)
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- Churn rate by tier
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- Average revenue per user (ARPU)
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- Expansion revenue
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---
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## Guidelines
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- Never price based on cost — price based on value delivered to the customer
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- Always A/B test price changes where possible; use geographic holdouts if A/B isn't feasible
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- Recommend annual pricing with 15–20% discount — improves cash flow and reduces churn
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- If enterprise pricing is "contact us", recommend adding a price floor to qualify inbound
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