Product packaging and pricing

Pricing and packaging determine whether your chosen growth motion pays its own bills. Set them too low and you cannot afford ads, reps or servers; set them too high for the value you deliver and prospects evaporate. This chapter offers three quick considerations: charge enough to fund growth, place features in the right bundle, and provide a clear upgrade path. Use them as a sanity-check before you launch or whenever your plan feels cash-starved.

Growth costs money

Outbound salaries, inbound ad clicks, product-led server loads—whichever motion you picked in Chapter 2 carries a base cost. Price must cover that cost and still leave margin for reinvestment.

Raise, then raise again

Andreessen Horowitz tells founders to raise prices; most undercharge by default. Review competitors, then push higher. Revisit price after every major release, when you add roughly one hundred customers, or at least twice a year. The extra headroom widens budgets for marketing experiments and better support.

Match model to buyer pulse

Monthly keeps cash flowing but invites churn. Annual locks budget early and can smooth seasonality. Blend the two: list both options, place the yearly plan first, and show the saving in euros to nudge uptake.

A bundle should attract the right buyers and repel the wrong ones. Thinkific discourages low-commitment creators by charging a flat fee, while Teachable’s seven-and-a-half-percent starter transaction fee nudges serious educators to move up a tier. Decide which features or limits convince your ideal profile to upgrade and which keep resource-draining segments at bay.

Keep tiers obvious

One entry plan that proves value, one core plan where most revenue lives, and one premium tier for high-touch customers. The fewer grey areas between tiers, the fewer negotiation delays and support tickets you will field.

Avoid hidden overlaps

If two tiers solve the same pain with similar limits, prospects grind to a halt while comparing tables. Separate tiers by outcome, not by marginal extras.

Trigger upgrades on clear metrics

Seat numbers, usage credits or revenue thresholds work well because customers see the link to their own growth. If progress stalls, they can downgrade without drama, preserving goodwill and future expansion potential.

Offer one step up, not a maze

Present the next level only when it becomes relevant. An in-product banner or quarterly success review beats a busy pricing matrix. Simplicity raises conversion and lowers support burden.

Keep friction low

Move usage, settings and billing details automatically. The less effort required, the faster customers climb the ladder and the sooner you recoup acquisition cost.

A sustainable go-to-market relies on price that funds your chosen motion, bundles that attract the right customers, and an upgrade path that scales revenue in step with client success. Treat these three checkpoints as living levers: revisit price regularly, adjust bundles when buyer needs change, and refine upgrades as data rolls in. With pricing and packaging now easy to buy and profitable to sell, you are ready to tackle messaging in Chapter 4.