Pricing framework
Most pricing cases ask you to put a number on something genuinely new, often with no obvious comparison. Here is how to box it in from four directions until a sensible price falls out.
The setup
What a typical prompt looks like
Int
Interviewer“Your client has built a device that removes stubborn stains from clothing instantly. Help them decide what to charge for it.”
You
Your moveBefore touching a number, ask five questions to get the basics straight.
Question 1 of 5
What line of business is the company already in?
1
Question 2 of 5
What is the product like: its features, its lifecycle and any side benefits?
2
Question 3 of 5
What is the client optimising for: profit, market share, or something else?
3
Question 4 of 5
When are they planning to launch?
4
Question 5 of 5
What does the competitive landscape around this product look like?
5
01 The big picture
Four levers box the price in
Cost sets the floor, value sets the ceiling, competitors set the range in between, and demand and supply, when you have the data for it, picks the exact point.
Pricing
Pricing
Cost-based
Competitor-based
Value-based
Demand / supply
The full tree
Everything in one view
Tap any box to light up its path and see what to check there.
Pick a box above to see what it covers.
Where to next