The Economics of Pricing
Value, Cost, and Willingness to Pay
Why pricing is the highest-leverage profit driver, the three pricing orientations, willingness to pay theory, price elasticity measurement, and the Economic Value to the Customer (EVC) framework.
Cost-Plus & Break-Even
The Financial Floor
Full cost-plus pricing mechanics, target return pricing with ROIC sensitivity, contribution margin pricing, and the calculation of volume changes required for price increases.
Value-Based Pricing
EVC & WTP Research
The six-step value-based logic chain, conjoint analysis design, Van Westendorp PSM interpretation, and building the ROI-driven value case for enterprise B2B.
10/10
Complexity
19
Pages
SaaS & Subscription
Architecture & Metrics
Metric comparison (seat, usage, outcome), freemium unit economics, tier architecture principles, and the lifetime cost of discounting in recurring revenue models.
Physical Goods Pricing
Channels, Margins, & Architecture
Physical goods price architecture from manufacturer cost to retail, MSRP and MAP policy mechanics, retail channel margin stack, DTC vs. wholesale contribution margin, and promotional pricing P&L models.
Services & Professional Fees
Hourly, Fixed-Fee, & Retainers
Services pricing structures with risk profiles, rate card cost foundations, leverage models, fixed-fee risk adjustment, scope creep management, and value-based fee EVC calculations.
Platform & Marketplace
Network Effects & Fees
The financial architecture of two-sided markets. Balancing take-rates, transaction fees, and cross-side network effects for long-term platform health.
Dynamic Pricing
Yield & Revenue Management
Yield management hotel models, EMSR protection level calculations, RevPAR vs. occupancy optimization, surge pricing economics, and algorithmic pricing governance frameworks.
10/10
Complexity
16
Pages
Price Segmentation
Capturing the WTP Distribution
Three-segment pricing models, first/second/third-degree discrimination, geographic tiering with arbitrage protection, volume discount architecture (block vs. incremental), and Robinson-Patman Act compliance.
Psychological Pricing
Behavioral Economics & Choice
Charm pricing impact, decoy effect design (46% ARPU lift), paradox of choice in tier structures, temporal framing, loss aversion in free trials, and reference price management.
Price Increases
Strategy & Measurement
The playbook for managing inflation-driven price increases, execution tactics, and the financial measurement of revenue lift vs. churn impact.
Discounting & Governance
Protecting the Price Line
Discount waterfall analysis (39.6% leakage), deal desk tier structures/SLAs, CPQ system financial ROI, sales compensation alignment, MFN clause exposure, and the pricing analytics dashboard.
International PRICING
Global Markets & Currency
PPP-adjusted pricing mechanics, currency risk impact analysis (10.6pt compression), local currency reset policies, price corridors, and transfer pricing alignment.
10/10
Complexity
15
Pages
CFO Playbook
Synthesizing the Strategy
Synthesizing the 14-part series into a cohesive Systems CFO pricing playbook that turns monetization into a predictable engine for enterprise value.