Price and package answer different questions
Price is a hypothesis about what a customer will pay. Packaging decides which capabilities, limits and service belong together for a segment. Test both with customer behavior rather than treating the first published page as a permanent answer.
Packages should express meaningful customer differences
- Good-better-best packages can serve distinct levels of maturity.
- Add-ons can isolate optional capabilities with high value or high cost.
- Annual prepayment can exchange commitment for cash flow rather than hide a discount.
- Enterprise pricing can account for security, control, procurement and service.
- Grandfathering or migration rules protect existing customers when plans change.
Test acceptance by segment
- Ask customers about costly alternatives and current spend.
- Publish a price or a concrete starting point whenever possible.
- Track acceptance by segment, not only total conversion.
- Run price tests on new cohorts without surprising existing customers.
- Require positive contribution margin before paying for growth.
Unit economics decides whether growth is affordable
| Metric | Decision it informs |
|---|---|
| ARPA and gross margin | Whether package revenue leaves room after direct delivery cost. |
| CAC payback period | How long acquired revenue takes to recover acquisition cost. |
| LTV to CAC | Whether retained customer value supports the acquisition cost assumption. |
| Customer and revenue churn | Whether accounts and revenue remain after the initial sale. |
Development cost plus markup does not show willingness to pay. Too many plans obscure comparison, while optimizing signups before paid retention can reward the wrong behavior. Investor-funded discounts should not be read as product-market fit.
Set the success threshold before a test. Keep a change when activation, retained revenue or contribution margin improves; attention alone is not enough.