Pricing Strategy Cheat Sheet

// Model | When to use | Pros | Cons | Example

// 1. FLAT-RATE (one price for all features)
//    Use: Simple products, low-complexity sales
//    Pro: Easy to explain, no pricing confusion
//    Con: Leaves money on the table for high-value customers
//    Example: Basecamp ($99/mo flat for teams)

// 2. TIERED (multiple plans with increasing features)
//    Use: SaaS with identifiable customer segments
//    Pro: Captures value across segments, anchoring effect
//    Con: Feature allocation decisions are hard
//    Example: Notion (Free / Plus $10 / Business $18 / Enterprise)

// 3. PER-SEAT (price per user)
//    Use: Collaboration tools, enterprise software
//    Pro: Scales naturally with customer success
//    Con: Customers minimize seats; resistance to adding users
//    Example: Slack, Figma, Notion Teams

// 4. USAGE-BASED (pay for what you use)
//    Use: Infrastructure, APIs, AI services
//    Pro: Aligns cost with value, low barrier to start
//    Con: Revenue is unpredictable; customers bill shock
//    Example: AWS, Stripe (2.9% + $0.30), OpenAI (per token)

// 5. FREEMIUM (free tier + paid upgrade)
//    Use: PLG products with viral loop or network effects
//    Pro: Massive top-of-funnel, users sell internally
//    Con: High infra cost for free users; hard to convert
//    Example: Slack, Dropbox, Spotify, HubSpot CRM
//    Rule: Free tier must deliver real value; upgrade must feel necessary

// 6. VALUE-BASED (price to the value delivered)
//    Use: B2B with measurable ROI for the buyer
//    Pro: Highest revenue ceiling; decoupled from cost
//    Con: Requires strong positioning and proof of value
//    Example: "We save you 10h/week at $100/hr = $1,000 value/mo → price: $299/mo"

// PRICING PSYCHOLOGY TACTICS:
// □ Anchor with highest plan first (left-to-right on pricing page)
// □ Highlight the "recommended" middle plan
// □ Annual billing discount (2 months free = 17% discount)
// □ "$99/mo" not "$1,188/yr" — smaller number feels better
// □ Per-seat pricing: quote per-seat, not per-team