# Pricing and Packaging Plan: [Product name]

> A pricing and packaging plan for a software or subscription product: pricing objectives, segments and willingness
> to pay, the value metric, tiers and the features in each, fences between tiers, price points, discount policy,
> price research and tests, the financial impact, the migration plan for existing customers, legal checks and the
> rollout. There is no formal standard; the plan follows common pricing practice (value-based pricing, good-better-best
> packaging and designing the product around willingness to pay, as discussed by Ramanujam and Tacke in *Monetizing
> Innovation*, 2016) in original words. The economics behind price discrimination, versioning and bundling are worked
> in mba/mba-pricing-card. Legal points are dated examples for the EU, UK and US as of October 2026; this is a
> documentation format, not legal or financial advice. Replace every `[bracketed]` value and every row marked
> *Example*.

<!--
Guidance: How to use this template
- Decide the objective (section 2) and the value metric (section 4) before you debate price points. Most pricing
  mistakes are packaging and metric mistakes, not a wrong number.
- Gather willingness-to-pay evidence (section 3) before the product is finished where you can: price shapes which
  features belong in which tier.
- Plan the migration of existing customers (section 12) and the legal checks (section 13) as carefully as the new
  price list. Price changes for existing customers carry the highest trust and legal risk.
- The worked example is the fictional note-taking app Tallow Notes (product/product-vision-strategy,
  product/north-star-metric). The prices and customer counts are invented and all derived figures were recomputed.
- Related templates: mba/mba-pricing-card (pricing economics), mba/mba-conjoint-analysis-card (willingness to pay),
  mba/mba-demand-elasticity-card, finance/unit-economics-analysis, product/ab-test-plan,
  product/competitive-analysis, marketing/go-to-market-plan, personal/subscription-audit (the customer's view of
  subscriptions).
-->

## Document control

<!-- Guidance: Pricing touches product, finance, sales, support and legal. Name an accountable owner and record approvals from each function before any customer sees a new price. -->

| Field | Value |
|---|---|
| Document ID | [PRC-PRODUCT-NN] |
| Product | [Product name] *Example:* Tallow Notes |
| Version | [0.1] |
| Status | [Draft / In review / Approved / Live / Superseded] |
| Owner | [@pricing-owner or @head-of-product] |
| Contributors | [@finance, @sales or growth, @support, @data] |
| Approvers / reviewers | [@ceo, @cfo, @legal-counsel] |
| Markets and currencies | [Countries, currencies, tax display] *Example:* Global, prices in USD, EUR and GBP, consumer prices shown including VAT where required |
| Planned effective date | YYYY-MM-DD |
| Last updated | YYYY-MM-DD |
| Classification | [Confidential until announced] |

### Approvals

| Role | Name | Decision | Date |
|---|---|---|---|
| Product | [@name] | [Approved / Changes requested] | YYYY-MM-DD |
| Finance | [@name] | [Approved / Changes requested] | YYYY-MM-DD |
| Legal or compliance | [@name] | [Approved / Changes requested] | YYYY-MM-DD |
| Support or customer success | [@name] | [Approved / Changes requested] | YYYY-MM-DD |

### Revision history

| Version | Date | Author | Change |
|---|---|---|---|
| 0.1 | YYYY-MM-DD | [@owner] | First proposal |
| [0.2] | YYYY-MM-DD | [@owner] | [Research results added, price points revised] |
| [1.0] | YYYY-MM-DD | [@owner] | [Approved for rollout] |

## Contents

1. Summary and decision requested
2. Pricing objectives and constraints
3. Segments and willingness to pay
4. Value metric
5. Packaging: tiers and feature allocation
6. Fences
7. Price points
8. Discount and promotion policy
9. Competitive reference
10. Price research and tests
11. Financial impact
12. Migration plan for existing customers
13. Legal and consumer protection checks
14. Rollout, monitoring and guardrails
15. Glossary
16. References

## 1. Summary and decision requested

<!-- Guidance: Write this last, in five to eight lines. State the change, the reason, the expected impact with its range, the main risk and what you ask approvers to decide. -->

| Item | Statement |
|---|---|
| Change | [What changes in metric, tiers and prices] |
| Reason | [Link to strategy and evidence] |
| Expected impact | [Revenue, conversion, retention, with range] |
| Main risk | [Risk and mitigation] |
| Decision requested | [Approve / choose between options] |
| *Example:* Change | Bill by active editor (readers free), keep three tiers (Free, Plus, Team), raise Plus from 6 to 8 USD per editor per month on annual billing, add admin controls to Team at 15 USD |
| *Example:* Reason | Strategy pillar P1 (sharing) needs free readers; pillar P3 (trust) is packaged in Team; Plus price is below the research range of 7 to 9 USD |
| *Example:* Expected impact | Plus revenue from existing customers up 18,240 USD per month after migration if 6% of affected seats churn (range 12,480 to 24,000 USD for 12% to 0% churn) |
| *Example:* Main risk | Backlash from long-standing Plus customers; mitigated by keeping the old price until renewal and at least 60 days' notice |

## 2. Pricing objectives and constraints

<!-- Guidance: A price cannot maximise everything at once. Rank the objectives so trade-offs are explicit, and list the constraints that rule options out. Pitfall: "maximise revenue" as the only objective, which ignores adoption and trust. -->

| Rank | Objective | Measure |
|---|---|---|
| 1 | [Objective] | [Metric] |
| 1 *(Example)* | Grow team adoption (more collaborating workspaces) | North star: weekly collaborating workspaces |
| 2 *(Example)* | Increase revenue per paying workspace | Average revenue per paying workspace |
| 3 *(Example)* | Keep pricing simple enough to explain in one sentence per tier | Support tickets about billing per 1,000 paying workspaces |

Constraints:

- [Constraint] *Example:* no sales team (non-goal NG-01), so every tier must be self-serve with a public price.
- [Constraint] *Example:* billing system supports per-seat and flat prices, monthly and annual terms only.
- [Constraint] *Example:* free tier must stay useful enough to invite a team, because growth comes from invitations.

## 3. Segments and willingness to pay

<!-- Guidance: Describe each segment by the value it gets and its willingness to pay, with evidence. Willingness to pay differs more between segments than between features, which is why packaging follows segments. -->

| Segment | Value received | Willingness to pay (range) | Evidence | Tier fit |
|---|---|---|---|---|
| [Segment] | [Value] | [Range, unit] | [Research ID] | [Tier] |
| *Example:* Individuals and pairs | Personal knowledge, light sharing | 0 to 5 USD per month | RES-034 survey, 1,180 responses | Free |
| *Example:* Small teams of 3 to 10 | Shared notes, search, version history | 7 to 9 USD per editor per month | Price sensitivity survey PS-02 (section 10) | Plus |
| *Example:* Teams of 10 to 30 with an admin | Admin roles, audit log, data residency | 13 to 18 USD per editor per month | Conjoint study CJ-01 (section 10) | Team |

Questions to answer:

- Which segment is the target customer in the product strategy, and is its tier priced for adoption or for margin?
- Who decides and who pays in each segment (user, team lead, finance)?
- Which features did customers value most, and which did they not value at all?

## 4. Value metric

<!-- Guidance: The value metric is the unit you charge for. It should grow as the customer gets more value, be easy to understand and predict, and be hard to work around. Compare at least three candidates. -->

| Candidate metric | Grows with value? | Predictable for customer? | Hard to game? | Supports strategy? | Verdict |
|---|---|---|---|---|---|
| [Metric] | [Yes / Partly / No] | [Yes / No] | [Yes / No] | [Yes / No] | [Chosen / Rejected] |
| *Example:* Per member (all seats) | Partly | Yes | Yes | No: charging readers discourages invitations | Rejected |
| *Example:* Per active editor (members who edited in the billing month) | Yes | Mostly (bill shows who edited) | Yes | Yes: readers are free, so teams invite freely | Chosen |
| *Example:* Per GB of storage | No | No | Partly | No | Rejected |
| *Example:* Flat price per workspace | No | Yes | Yes | Partly | Rejected for paid tiers |

**Chosen value metric:** [Metric and exact definition]

*Example:* Active editor: a member who created or edited at least one note in the workspace during the billing
month. Readers and commenters are free. Annual plans are billed on the number of editor seats the customer reserves,
with a true-up each quarter.

## 5. Packaging: tiers and feature allocation

<!-- Guidance: Use two to four tiers. Each tier should be designed for one segment and named for who it serves. Put the features that the target segment values most in its tier, and the features only larger customers need in the top tier. Pitfall: a middle tier that nobody needs because the free tier is too generous or the top tier too cheap. -->

| Capability | Free | Plus | Team |
|---|---|---|---|
| [Capability] | [Included / Limit / Not included] | [ ] | [ ] |
| *Example:* Editors | Up to 3 | Unlimited | Unlimited |
| *Example:* Readers and commenters | Unlimited | Unlimited | Unlimited |
| *Example:* Starter spaces and templates | Yes | Yes | Yes |
| *Example:* Version history | 7 days | 90 days | Unlimited |
| *Example:* Storage | 2 GB per workspace | 20 GB per editor | 100 GB per editor |
| *Example:* Question-style search (when released) | 20 questions per month | Unlimited | Unlimited |
| *Example:* Admin roles and permission groups | No | Basic (owner, member) | Full |
| *Example:* Audit log with export | No | No | Yes |
| *Example:* EU data residency | No | No | Yes |
| *Example:* Support | Help centre | Email, 2 business days | Email, 1 business day |

Tier design notes:

- Free: [who and why] *Example:* lets a team of up to three editors try collaboration with no payment.
- Plus: [who and why] *Example:* the main tier for small teams; priced inside the research range.
- Team: [who and why] *Example:* adds trust and administration features from strategy pillar P3.

Add-ons (optional): [List features sold separately and why they are not in a tier.]

## 6. Fences

<!-- Guidance: Fences are the rules that keep customers in the tier that matches their value, so high-value customers do not buy the cheapest tier. Good fences are based on needs that differ between segments. Bad fences annoy all customers equally. -->

| Fence ID | Fence | Type | Segment it separates | Risk of annoying customers |
|---|---|---|---|---|
| F-01 | [Fence] | [Usage / Feature / Support / Term] | [Segments] | [L / M / H] |
| F-01 *(Example)* | Free limited to 3 editors | Usage | Individuals and pairs vs teams | M: a fourth editor must upgrade; mitigated by unlimited readers |
| F-02 *(Example)* | Audit log and EU residency only in Team | Feature | Small teams vs teams with an admin and compliance needs | L |
| F-03 *(Example)* | Version history 7, 90 days, unlimited | Usage | All three | L |
| F-04 *(Example)* | Annual term discount | Term | Committed vs trial customers | L |

## 7. Price points

<!-- Guidance: Set price points within the willingness-to-pay ranges from section 3, then check them against the competitive reference (section 9) and the unit economics. Show monthly and annual prices and the effective discount. -->

| Tier | Monthly billing (per editor per month) | Annual billing (per editor per month) | Annual price per editor | Annual discount |
|---|---|---|---|---|
| [Tier] | [Price] | [Price] | [Price x 12] | [1 - annual / monthly] |
| *Example:* Free | 0 | 0 | 0 | not applicable |
| *Example:* Plus | 10 USD | 8 USD | 96 USD | 20% |
| *Example:* Team | 18 USD | 15 USD | 180 USD | 16.7% |

Currency and tax: [How EUR and GBP prices are set (round local price points, not exchange-rate conversion), whether
consumer prices are shown including tax, and how often local prices are reviewed.]

Unit economics check: [Gross margin per editor at each price, link to finance/unit-economics-analysis.]

## 8. Discount and promotion policy

<!-- Guidance: Discounts are prices too. Write down who can grant which discount, for how long, and how it is shown, so discounts do not quietly become the real price list. -->

| Discount type | Maximum | Who approves | Duration | Conditions |
|---|---|---|---|---|
| [Type] | [%] | [Role] | [Period] | [Conditions] |
| *Example:* Annual billing | 20% Plus, 16.7% Team | Built into price list | Term of contract | Paid upfront |
| *Example:* Nonprofit and education | 50% | Support lead | 12 months, renewable | Verified eligibility |
| *Example:* Launch promotion | 25% for first 3 months | Head of product | Campaign window only | New customers; announced price reduction rules checked (section 13) |

Rules: [*Example:* no unpublished discounts, no discount stacking, every promotion has an end date and a
reference price that meets local price-reduction rules.]

## 9. Competitive reference

<!-- Guidance: Competitor prices set the customer's reference point but should not set your price. Record the date you checked, because prices change. Keep the full analysis in product/competitive-analysis. -->

| Alternative | Pricing model | Entry paid price | Checked on | Notes |
|---|---|---|---|---|
| [Competitor or alternative] | [Model] | [Price] | YYYY-MM-DD | [Notes] |
| *Example:* Suite notes tool (bundled) | Included in suite licence | 0 marginal | 2026-10-12 | Our free tier competes here |
| *Example:* Specialist team wiki A | Per member | 10 USD per member per month | 2026-10-12 | Charges readers |
| *Example:* Status quo: chat plus shared drive | Existing licences | 0 marginal | 2026-10-12 | The main alternative for small teams |

## 10. Price research and tests

<!-- Guidance: Combine stated-preference research (surveys) with revealed behaviour (tests), and set success thresholds before running anything. Be careful with live A/B price tests: showing different prices to similar customers at the same time can damage trust and may raise legal questions, so prefer tests on new markets, packaging, or fake-door tests, and take advice before testing live prices. -->

| Study ID | Method | Sample | Question | Result | Used for |
|---|---|---|---|---|---|
| [ID] | [Method] | [N, segment] | [Question] | [Result] | [Decision] |
| PS-02 *(Example)* | Price sensitivity meter survey (Van Westendorp method) | 640 small-team leads | Acceptable price range for Plus | Acceptable range 7 to 9 USD per editor per month | Plus price point |
| CJ-01 *(Example)* | Choice-based conjoint (see mba/mba-conjoint-analysis-card) | 410 admins of teams of 10 to 30 | Value of audit log, residency, support level | Audit log and residency carried most of the Team premium | Team packaging |
| FD-03 *(Example)* | Fake-door test of a Team trial button | New workspaces with at least 10 members, 2 weeks | Interest in Team features | 9% clicked "Start Team trial" | Team launch priority |

Planned tests after launch:

| Test ID | Hypothesis | Metric | Threshold | Plan |
|---|---|---|---|---|
| [ID] | [Hypothesis] | [Metric] | [Threshold] | [Link to product/ab-test-plan] |
| *Example:* PT-01 | Showing annual billing as the default raises the annual share of new Plus purchases | Annual share of new Plus subscriptions | From 45% to at least 55% | product/ab-test-plan EXP-021 |

## 11. Financial impact

<!-- Guidance: Model the impact for existing customers and new customers separately, with a range for churn and conversion. Show the break-even churn: the share of affected customers you could lose before the change loses money. All numbers must reconcile with section 1. -->

Existing customers *(Example)*: 12,000 Plus editor seats at 6 USD per month today.

| Scenario | Seats lost to the change | Seats after | Price | Monthly revenue after | Change vs today (72,000 USD) |
|---|---|---|---|---|---|
| No churn | 0% | 12,000 | 8 USD | 96,000 USD | +24,000 USD |
| Base case | 6% | 11,280 | 8 USD | 90,240 USD | +18,240 USD (+25.3%) |
| High churn | 12% | 10,560 | 8 USD | 84,480 USD | +12,480 USD |
| Break-even | 25% | 9,000 | 8 USD | 72,000 USD | 0 |

Break-even churn = 1 - (old price / new price) = 1 - 6 / 8 = 25%. The base case assumption of 6% must be justified
by evidence: [*Example:* churn after the previous price change in 2024 was 4% of affected seats].

New customers: [Expected effect on conversion from Free to paid and on tier mix, with a range.]

## 12. Migration plan for existing customers

<!-- Guidance: Decide who moves, when, with how much notice and what they keep. Be generous where it costs little: customer trust built over years can be lost in one email. Check contract terms and consumer law (section 13) before setting dates. -->

| Customer group | Today | After change | When | Notice | Offer |
|---|---|---|---|---|---|
| [Group] | [Plan, price] | [Plan, price] | [Date or event] | [Days] | [Grandfathering, credit, lock-in] |
| *Example:* Plus, annual | 6 USD per editor per month | 8 USD | At next renewal on or after 2027-03-01 | At least 60 days before renewal | Option to renew early at the old price before 2027-03-01 |
| *Example:* Plus, monthly | 6 USD | 8 USD | First bill after 2027-03-01 | At least 60 days | Easy cancellation link in the notice |
| *Example:* Free with more than 3 editors | Free (old limit 5 editors) | Free with 3 editors or Plus | 2027-03-01 | 60 days | 3 months of Plus at 50% |
| *Example:* Nonprofit discount holders | 3 USD | 4 USD | Next renewal | 60 days | Discount percentage kept |

Communication plan:

- [ ] Notice email and in-app message with the reason, the new price, the date, and how to cancel or change plan.
- [ ] Help-centre article and pricing-page FAQ updated on the day of notice.
- [ ] Support team briefed with answers to the ten most likely questions.
- [ ] Billing system tested with every group above before the notice goes out.
- [ ] Customers with contracts that fix prices identified and excluded until their terms allow a change.

## 13. Legal and consumer protection checks

<!-- Guidance: These are questions for your legal counsel, with dated examples of rules in the EU, UK and US as of October 2026. They are not legal advice and are not complete. Check the current official text and a qualified professional for every market you sell in. -->

| Jurisdiction | Rule (example, check current text) | Question for counsel | Status as of October 2026 |
|---|---|---|---|
| European Union | Price Indication Directive 98/6/EC, Article 6a (inserted by Directive (EU) 2019/2161): an announced price reduction must show the prior price, the lowest price applied in a period of at least 30 days before the reduction | Do our launch promotions show a compliant prior price in each EU market? | Applies from 2022-05-28 as transposed nationally |
| European Union | Consumer Rights Directive 2011/83/EU, Article 6(1): pre-contract information including the total price with taxes; point (ea) on prices personalised by automated decision-making (added by Directive (EU) 2019/2161) | Do consumer checkouts show total prices, and do we personalise any price? | In force as transposed nationally |
| European Union | Directive (EU) 2023/2673, adding Article 11a to Directive 2011/83/EU: an online withdrawal function for contracts concluded through a website or app | Does our cancellation and withdrawal flow meet the national transposition? | Applies from 2026-06-19 as transposed nationally |
| United Kingdom | Digital Markets, Competition and Consumers Act 2024, Part 4, Chapter 1 (unfair commercial practices, including how prices and mandatory charges are shown); CMA guidance CMA207 and price transparency guidance CMA209 | Do headline prices include all mandatory charges? | Chapter 1 in force since April 2025 (CMA207 first published 2025-04-04 for its start); check legislation.gov.uk and CMA guidance |
| United Kingdom | Same Act, Part 4, Chapter 2 (subscription contracts) | Will renewal reminders and exit routes meet the regime when it starts? | Not yet in force; the government response of April 2026 anticipates commencement in spring 2027, subject to secondary legislation |
| United States (federal) | Restore Online Shoppers' Confidence Act, 15 U.S.C. 8403; FTC Act section 5 (unfair or deceptive practices) | Are recurring charges disclosed clearly, consented to and easy to stop? | In force |
| United States (federal) | FTC amended Negative Option Rule ("click-to-cancel"), 2024 | Do we rely on any part of it? | Vacated by the US Court of Appeals for the Eighth Circuit on 2025-07-08 before enforcement; check ftc.gov for new rulemaking |
| United States (states) | Automatic renewal laws, for example California Business and Professions Code sections 17600 and following (amended by AB 2863 from 2025-07-01) | Do price-change notices and online cancellation meet each state's law? | In force; other states have their own laws |
| All markets | Competition law (for example Article 101 TFEU, UK Competition Act 1998 Chapter I, Sherman Act section 1) | Has anyone discussed prices or price changes with a competitor? | Never share or agree prices with competitors |

Business-to-business sales may follow different rules; record which customers are consumers.

## 14. Rollout, monitoring and guardrails

<!-- Guidance: Plan the dates, the metrics you watch daily in the first weeks, the guardrail limits and the rollback option. -->

| Step | Date | Owner |
|---|---|---|
| [Step] | YYYY-MM-DD | [@owner] |
| *Example:* New prices for new customers | 2027-01-04 | Growth PM |
| *Example:* Notice to existing customers | 2026-12-30 (at least 60 days before 2027-03-01) | Support lead |
| *Example:* Existing customers migrate | From 2027-03-01 (annual: at renewal) | Billing lead |
| *Example:* Post-change review | 2027-05-31 | Head of product |

| Guardrail | Limit | Action if breached |
|---|---|---|
| [Metric] | [Limit] | [Action] |
| *Example:* Plus seat churn among notified customers | Above 10% in 60 days | Review with leadership; consider extended grandfathering |
| *Example:* Free-to-paid conversion of new workspaces | Down more than 15% relative to baseline | Review Plus price for new customers |
| *Example:* Billing support tickets per 1,000 paying workspaces | Above 20 per week | Add FAQ, brief support again |
| *Example:* Weekly collaborating workspaces (north star) | Any sustained drop after change | Check whether the editor limit is blocking invitations |

## 15. Glossary

<!-- Guidance: Keep terms consistent with the billing system and the pricing page. -->

| Term | Meaning |
|---|---|
| Value metric | The unit the price is charged for |
| Packaging | How features and limits are grouped into tiers and add-ons |
| Fence | A rule that keeps customers in the tier matching their value |
| Good-better-best | A three-tier structure for segments with rising needs and willingness to pay |
| Willingness to pay | The highest price a customer would pay for an offer, usually estimated as a range |
| Grandfathering | Letting existing customers keep an old price or plan for a period |
| Break-even churn | The share of affected customers that can be lost before a price increase reduces revenue |
| Active editor *(Example)* | A member who created or edited a note during the billing month |

## 16. References

- Ramanujam, M. and Tacke, G. (2016). *Monetizing Innovation: How Smart Companies Design the Product Around the
  Price*. Wiley. ISBN 978-1-119-24086-0.
- Van Westendorp, P. (1976). The price sensitivity meter, introduced at an ESOMAR congress; described in many market
  research texts.
- Directive (EU) 2019/2161 (Omnibus Directive): https://eur-lex.europa.eu/eli/dir/2019/2161/oj/eng
- Directive 2011/83/EU (Consumer Rights Directive): https://eur-lex.europa.eu/eli/dir/2011/83/oj/eng
- CMA, Unfair commercial practices guidance (CMA207):
  https://www.gov.uk/government/publications/unfair-commercial-practices-cma207
- UK government, consultation and response (outcome published 2026-04-02) on the subscription contracts regime:
  https://www.gov.uk/government/consultations/consultation-on-the-implementation-of-the-new-subscription-contracts-regime
- FTC, Negative Option Rule page: https://www.ftc.gov/legal-library/browse/federal-register-notices/negative-option-rule
- Related templates: mba/mba-pricing-card, mba/mba-conjoint-analysis-card, mba/mba-demand-elasticity-card,
  finance/unit-economics-analysis, product/ab-test-plan, product/competitive-analysis,
  product/product-vision-strategy, product/north-star-metric, marketing/go-to-market-plan,
  personal/subscription-audit.

## Standard and licence note

Based on common pricing practice and on public EU, UK and US legal texts summarised in original words as of October
2026. This is a documentation format, not legal or financial advice: check the current official text and a qualified
professional before changing prices. The book is cited by name only and no text, figures or tables are copied.
Official text: Wiley, purchase or licensed access:
https://www.wiley.com/en-us/Monetizing+Innovation%3A+How+Smart+Companies+Design+the+Product+Around+the+Price-p-9781119240860.
All wording, the structure and the Tallow Notes example are original. Template licence: MIT.