10 Pricing Principles: A marketing master class from CMO Zen

How confident are you that your pricing is right? After this master class, you’ll never need to wonder again.

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[2 min. read]

Back Story

Several years ago, I was the CMO of a SaaS startup wrestling with pricing decisions.

We needed an effective pricing policy, so I went on a deep dive trying to get smart about pricing and to parse fact from fiction. 

These ten pricing principles are what I learned. 

—Chad Jardine
Author
Founding Partner, CMO Zen

Introduction

Pricing can be tough.

Pricing policy decisions are often made by intuition more than data or science.  

Despite the reliance on intuition, it seems like everyone’s heard of a counterintuitive pricing strategy that made all the difference. Like the classic sale of ugly cats for $100 in Denver (Beckwith, 2000) or one shop’s accidental doubling of the price of turquoise jewelry (Cialdini, 1984/2021), both of which caused an uptick in sales. 

I set out to understand objective pricing principles. Given a particular set of circumstances, what works every time?

What I learned is that pricing is understandable. 

Getting smart about pricing is do-able, and it’s probably easier than you think.

Of course I can’t tell you what your particular pricing should be in a guide. I can, however, show you how to find it. 

This master class will equip you with the tools to discover the right pricing strategy for your business and execute it. 

The chapters are organized as follows: 

  • Chapters 1-2 will orient you around pricing concepts. 
  • Chapters 3-6 are the core pricing policy components. 
  • Chapters 7-10 contain factors to optimize and influence those core components.

By understanding these principles you’ll know how to find what your customer truly values and that you aren’t leaving money on the table. 

And you’ll never enter a pricing conversation naïvely again. 

Contents

  1. Pricing Objectives
    Alternate Objectives | Revenue Growth Levers
  2. Pricing Components
    Strategy | Method | Structure | Positioning

Components

  1. Pricing Strategy
    Value | Demand Curves | Skimming | Penetration | Value Maximization
  2. Pricing Method
    Cost-Based: Asset, Market, or Income | Value-Based: WTP | Markup v. Margin | Surveys: Van Westendorp, Gabor-Granger, Conjoint Analysis
  3. Pricing Structure
    Linear | Partial Tariff | Tiers, Bundling, & Discounts
  4. Price Positioning
    STP | Unit of Sale/Value | Marketing Mix

Optimizations

  1. Pricing Psychology
    Customer Type: B2B/B2C | Buyer’s Journey (GTM): Sales-Led v. Self-Directed | Psychology Effects & Cognitive Biases
  2. Pricing Optimization
    Split Testing | Dynamic Pricing
  3. Pricing in Practice
    Unit Economics | Price Waterfall | Price Leaks | LTV:CAC
  4. Price Changes
    Deciding | Communication Strategies | Execution: Add Value, Timing, & Grandfathering

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