Price, value, discounts, free trials, funnel economics and practical pricing models.
There is no single “correct” price
The same offer can support several economically reasonable prices depending on the customer, positioning, sales model and amount of value created. Pricing is therefore not only a calculation; it is a business decision that should be tested.
Three basic approaches
Cost-plus pricing starts with your costs and adds a margin. Competitor-based pricing uses the market as a reference. Value-based pricing asks what financial or practical result the customer receives and prices against a share of that value. Each method is useful, but none should be used blindly.
Calculate the price floor first
Before thinking about psychological endings or pricing pages, understand the minimum sustainable price. For physical goods include materials, labour, packaging, shipping and waste. For services include delivery time, non-billable time, taxes and overhead. For SaaS include infrastructure, payment fees, support and variable AI or API costs.
Contribution margin and break-even calculations make it possible to see how many sales are required before a price becomes viable.
Customers buy outcomes, not your internal effort
A customer does not buy hours, code, metres of fabric or AI tokens. They buy an outcome: saved time, additional revenue, reduced risk, status, convenience or access. If a change can create €100,000 of value for a client, pricing it only from the developer hours ignores the most important part of the transaction.
Price is part of positioning
Very low prices can make the first purchase easier, but they also require far more customers and may attract people with low willingness to pay and high support needs. Competing only on price is rarely a durable moat. Choose the pricing unit — one-time, subscription, per user, usage, outcome, project fee, retainer or hybrid — to match how value is delivered.
Free, trial, demo or paid pilot?
Freemium works when free users are cheap to serve and naturally encounter a reason to upgrade. A free trial is better when the full value can be experienced within a limited period. Complex B2B projects may work better with a demo or paid pilot. The right choice depends on the sales cycle and how quickly the user can reach the first meaningful result.
Pricing has to work with the funnel
A low price limits what you can spend to acquire a customer. Start with the contribution from one sale, estimate conversion at each step of the funnel, calculate the traffic required and then compare that with the real cost of the channel. Include churn for recurring revenue.
CPC tells you the price of a click; CPA and CAC tell you the cost of a result or customer; ROAS compares ad-attributed revenue with ad spend; ROI looks at profit more broadly. Do not confuse revenue with profit.
Discounts and plans change behaviour
Discounts can help with a launch, annual commitment, volume or a strategically important segment, but permanent discounts train people to wait and weaken positioning. Annual billing improves cash flow and can reduce churn, but the discount should reflect a real economic benefit rather than habit.
Usually one to three clear plans are enough. Show prices publicly when the offer is standardised; use custom quotes when scope and value vary substantially.
Pricing is an experiment
Interview customers, make real offers, compare conversion and retention, and raise prices gradually when evidence supports it. The goal is not the lowest price or the biggest number you can say. It is a price that customers accept, reflects value and leaves enough margin for the business to work.