Purpose
Evaluate the financial impact of pricing changes (price increases, new tiers, add-ons, discounts) using ARPU/ARPA analysis, conversion impact, churn risk, NRR effects, and CAC payback implications. Use this to make data-driven go/no-go decisions on proposed pricing changes with supporting math and risk assessment.
What this is: Financial impact evaluation for pricing decisions you're already considering.
What this is NOT: Comprehensive pricing strategy design, value-based pricing frameworks, willingness-to-pay research, competitive positioning, psychological pricing, packaging architecture, or monetization model selection. For those topics, see the future pricing-strategy-suite skills.
This skill assumes you have a specific pricing change in mind and need to evaluate its financial viability.
Key Concepts
The Pricing Impact Framework
A systematic approach to evaluate pricing changes financially:
-
Revenue Impact — How does this change ARPU/ARPA?
- Direct revenue lift from price increase
- Revenue loss from reduced conversion or increased churn
- Net revenue impact
-
Conversion Impact — How does this affect trial-to-paid or sales conversion?
- Higher prices may reduce conversion rate
- Better packaging may improve conversion
- Test assumptions
-
Churn Risk — Will existing customers leave due to price change?
- Grandfathering strategy (protect existing customers)
- Churn risk by segment (SMB vs. enterprise)
- Churn elasticity (how sensitive are customers to price?)
-
Expansion Impact — Does this create or block expansion opportunities?
- New premium tier = upsell path
- Usage-based pricing = expansion as customers grow
- Add-ons = cross-sell opportunities
-
CAC Payback Impact — Does pricing change affect unit economics?
- Higher ARPU = faster payback
- Lower conversion = higher effective CAC
- Net effect on LTV:CAC ratio
Pricing Change Types
Direct monetization changes:
- Price increase (raise prices for all customers or new customers only)
- New premium tier (create upsell path)
- Paid add-on (monetize previously free feature)
- Usage-based pricing (charge for consumption)
Discount strategies:
- Annual prepay discount (improve cash flow)
- Volume discounts (larger deals)
- Promotional pricing (temporary price reduction)
Packaging changes:
- Feature bundling (combine features into tiers)
- Unbundling (separate features into add-ons)
- Pricing metric change (seats → usage, or vice versa)
Anti-Patterns (What This Is NOT)
- Not value-based pricing: This evaluates a proposed change, not "what should we charge?"
- Not WTP research: This analyzes impact, not "what will customers pay?"
- Not competitive positioning: This is financial analysis, not market positioning
- Not packaging architecture: This evaluates one change, not redesigning all tiers
When to Use This Framework
Use this when:
- You have a specific pricing change to evaluate (e.g., "Should we raise prices 20%?")
- You need to quantify revenue, churn, and conversion trade-offs
- You're deciding between pricing change options (test A vs. B)
- You need to present pricing change impact to leadership or board
Don't use this when:
- You're designing pricing strategy from scratch (use value-based pricing frameworks)
- You haven't validated willingness-to-pay (do customer research first)
- You don't have baseline metrics (ARPU, churn, conversion rates)
- Change is too small to matter (<5% price change, <10% of customers affected)
Facilitation Source of Truth
Use workshop-facilitation as the default interaction protocol for this skill.
It defines:
- session heads-up + entry mode (Guided, Context dump, Best guess)
- one-question turns with plain-language prompts
- progress labels (for example, Context Qx/8 and Scoring Qx/5)
- interruption handling and pause/resume behavior
- numbered recommendations at decision points
- quick-select numbered response options for regular questions (include
Other (specify)when useful)
This file defines the domain-specific assessment content. If there is a conflict, follow this file's domain logic.
Application
This interactive skill asks up to 4 adaptive questions, offering 3-5 enumerated options at decision points.
Step 0: Gather Context
Agent asks:
"Let's evaluate the financial impact of your pricing change. Please provide:
Current pricing:
- Current ARPU or ARPA
- Current pricing tiers (if applicable)
- Current monthly churn rate
- Current trial-to-paid conversion rate (if relevant)
Proposed pricing change:
- What change are you considering? (price increase, new tier, add-on, etc.)
- New pricing (if known)
- Affected customer segment (all, new only, specific tier)
Business context:
- Total customers (or MRR/ARR)
- CAC (to assess payback impact)
- NRR (to assess expansion context)
You can provide estimates if you don't have exact numbers."
Step 1: Identify Pricing Change Type
Agent asks:
"What type of pricing change are you considering?
- Price increase — Raise prices for new customers, existing customers, or both
- New premium tier — Add higher-priced tier with additional features
- Paid add-on — Monetize a new or existing feature separately
- Usage-based pricing — Charge for consumption (seats, API calls, storage, etc.)
- Discount strategy — Annual prepay discount, volume pricing, or promotional pricing
- Packaging change — Rebundle features, change pricing metric, or tier restructure
Choose a number, or describe your specific pricing change."
Based on selection, agent adapts questions:
If Option 1 (Price Increase):
Agent asks:
"Price increase details:
- Current price: $___
- New price: $___
- Increase: ___%
Who is affected?
- New customers only (grandfather existing)
- All customers (existing + new)
- Specific segment (e.g., SMB only, new plan only)
When would this take effect?
- Immediately
- Next billing cycle
- Gradual rollout (test first)"
If Option 2 (New Premium Tier):
Agent asks:
"Premium tier details:
- Current top tier price: $___
- New premium tier price: $___
- Key features in premium tier: [list]
Expected adoption:
- What % of current customers might upgrade? ___%
- What % of new customers might choose premium? ___%
Cannibalization risk:
- Will premium tier cannibalize current top tier?"
If Option 3 (Paid Add-On):
Agent asks:
"Add-on details:
- Add-on name: ___
- Price: $___ /month or /user
- Currently free or new feature?
Expected adoption:
- What % of customers would pay for this? ___%
- Is this feature currently used (if free)?
- Will making it paid hurt retention?"
If Option 4 (Usage-Based Pricing):
Agent asks:
"Usage pricing details:
- Usage metric: (seats, API calls, storage, transactions, etc.)
- Pricing: $___ per [unit]
- Free tier or minimum? (e.g., first 1,000 API calls free)
Expected impact:
- Average customer usage: ___ units/month
- Expected ARPU change: $current → $new
Expansion potential:
- As customers grow usage, will ARPU increase?"
If Option 5 (Discount Strategy):
Agent asks:
"Discount details:
- Discount type: (annual prepay, volume, promotional)
- Discount amount: ___% off
- Duration: (ongoing, limited time)
Trade-off:
- Lower price vs. improved cash flow (annual prepay)
- Lower price vs. larger deal size (volume)
- Lower price vs. urgency (promotional)"
If Option 6 (Packaging Change):
Agent asks:
"Packaging change details:
- What are you changing? (bundling, unbundling, pricing metric)
- Current packaging: [describe]
- New packaging: [describe]
Expected impact:
- ARPU change: $current → $new
- Conversion change: ___% → ___%
- Churn risk: (low,