Pricing

Every 1% improvement in pricing drops ~10% to the bottom line in most businesses. Yet pricing gets less attention than any other metric.

Three approaches

• Cost-plus (weak): cost + margin
• Competitor-based (lazy): what others charge
• Value-based (best): fraction of value delivered

Signals to raise price

• Close rate above 50% (leaving money on table)
• Low price sensitivity in sales objections
• Meaningful LTV without equivalent CAC justification

Packaging

• Good-better-best often outperforms single-price
• Anchor with premium tier
• Most customers pick middle (by design)

Testing

A/B test price on signup page. Watch not just conversion but revenue per visitor.

What to do with this

• Raise prices for new customers by 20-30% this quarter, most operators are underpriced 2-3x and don't realize it
• Watch revenue per visitor, not just conversion rate, a "worse" conversion at a higher price often makes more money
• Grandfather existing customers on price increases, switching them mid-relationship generates churn and complaints
• Run annual price reviews, markets shift and your value delivered has probably increased, the price should match
• Monitor close rate on qualified leads, above 50% means you're underpriced, below 15% means fix the offer before touching price