/prd-v03-pricing-model

name: prd-v03-pricing-model
description: Select and validate pricing model for PRD v0.3 Commercial Model. Triggers on requests to set pricing, choose monetization model, design pricing tiers, validate willingness to pay, or when user asks "how much should we charge?", "what pricing model?", "freemium vs paid?", "how to structure tiers?", "price point?". Consumes Competitive Landscape (CFD-) and Product Type (BR-) from v0.2. Outputs BR- entries for pricing rules, tier boundaries, and competitive positioning.
context: fork
allowed-tools:
  - Read
  - Write
  - Edit
  - Glob
  - Grep
  - WebSearch
  - WebFetch

Pricing Model Selection

Position in HORIZON workflow: v0.2 Product Type Classification → **v0.3 Pricing Model Selection** → v0.3 Moat Articulation

Consumes

This skill requires prior work from v0.2-v0.3:

• **BR-\* product type entry** (from Product Type Classification) — Determines which pricing model makes sense
• **CFD-\* competitive intelligence entries** (from Competitive Landscape Mapping) — Competitor pricing, WTP signals
• **BR-\* moat entries** (from Moat Definition, parallel v0.3 work) — Price as potential moat element
• **KPI-\* outcome entries** (from Outcome Definition, parallel v0.3 work) — Success metrics tied to pricing
• **Cost structure estimates** (from own analysis) — Unit economics to validate price floors

This skill assumes v0.2 competitive analysis is complete and product type is defined.

Produces

This skill creates/updates:

• **BR-PRC-\* entries** (pricing constraints) — Rules governing price floors, ceilings, discounts
• **BR-PKG-\* entries** (packaging rules) — Tier boundaries and feature gates
• **BR-CMP-\* entries** (competitive positioning) — Price anchor targets and undercut thresholds
• **Pricing model artifact** — Named decision: "We will use [Model] because [evidence]" with tier definitions

All BR pricing entries should include:

• `confidence: 2-3/5` (based on WTP evidence tier and competitor benchmarks, not assumptions)
• Evidence source (competitor pricing, customer interviews, cost structure)
• Forward target: "Would move to 4/5 if real customers validate WTP"

Example pricing rule entry:

BR-PRC-001: Entry Price Floor

Rule: Entry tier never below $15/mo (annual) or $19/mo (monthly)
Confidence: 2/5 (source: CAC-estimate + competitor-benchmarks)
Rationale: Below $15/mo, CAC payback exceeds 6 months, unsustainable
Enforcement: Stripe product configuration, pricing page, contract templates
Evidence:
  - CFD-042 (competitor pricing): Similar tools start at $15-25/mo
  - KPI-001 (outcome): CAC estimate $45, need 3-month payback = $15/mo minimum
Enforcement: Set in Stripe, document in pricing page, enforce in sales contracts
Exception: Founding customer 50% discount (must be approved by founder)
Next Target: "Would move to 4/5 if 5+ paying customers validate willingness at $15/mo"

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BR-CMP-002: Competitive Undercut Threshold

Rule: Maintain ≥50% savings vs [Competitor Name] at SMB level (5 users)
Confidence: 3/5 (source: competitor-pricing + 2-SMB-interviews)
Rationale: Price advantage is core differentiator for SMB segment (per product type: UNDERCUT)
Enforcement: Quarterly competitive price audit; triggers price review if competitor drops
Evidence:
  - BR-001 (product type: Undercut)
  - CFD-015 (value hypothesis): SMB would save $12,500/year at target price
  - CFD-042 (competitor pricing): Competitor at $30/user/mo = $1,800/year for SMB
Exception: If competitor drops price, floor (BR-PRC-001) takes precedence
Next Target: "Would move to 4/5 if SMB cohort pays premium for our service over incumbent"

Core Principle

**Pricing follows value timing**: When and how customers receive value determines the pricing model. Don't copy competitors without understanding their value delivery pattern.

Pricing Model × Product Type Matrix

| Product Type | Typical Model | Why It Fits | Anti-Model (Avoid) | |--------------|---------------|-------------|-------------------| | **Fast Follow** | Match market structure | Users expect familiar pricing | Premium positioning (no differentiation) | | **Undercut** | Flat rate, aggressive discount | Price IS the value prop | Per-user (negates savings) | | **Clone** | Parity or slight discount | Must compete on terms users know | Innovation pricing (confuses buyers) | | **Slice** | Usage-based or ecosystem-tied | Value tied to platform activity | Flat fee (misaligned with usage) | | **Wrapper** | Per-integration or usage | Value = connections made | Per-seat (value isn't user count) | | **Innovation** | Value-based, potentially premium | Funds education, signals quality | Race to bottom (devalues category) |

Value Timing → Model Selection

Ask: **When does the customer get value?**

| Value Pattern | Recommended Model | Examples | |---------------|-------------------|----------| | Continuous recurring | Subscription (monthly/annual) | SaaS tools used daily | | Per-transaction | Usage-based | API calls, exports, generations | | One-time outcome | One-time fee or lifetime | Logo design, course completion | | Milestone-based | Tiered + upsell triggers | Features unlock as needs grow |

Competitive Anchoring Decision Tree

1. Do competitors use per-user pricing?
   ├─ YES → Calculate "SMB penalty" (5-user annual cost)
   │   └─ Flat pricing at 50%+ savings = strong positioning
   └─ NO → Match model, differentiate on value/features

2. Is competitor pricing transparent?
   ├─ YES (Tier 1) → Use as direct anchor
   └─ NO ("Contact sales") → Find proxy or G2/Capterra estimates

3. Should we undercut, match, or go premium?
   ├─ Undercut: When we're simpler/niche and can sustain margins
   ├─ Match: When competing on features, not price
   └─ Premium: Only with clear, provable differentiation

SMB Penalty Calculation

Per-user pricing penalizes SMBs with larger teams. Calculate the arbitrage:

Competitor: $30/user/mo
SMB with 5 users: $30 × 5 × 12 = $1,800/year

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