# Principles - Pricing should be based on the value to the customer, not cost - Prices should be clear, consistent, and coherent with the rest of your company’s portfolio - Comparables matter. Unless you are operating a monopoly or providing a truly unique solution, assume that your customers know the prices of the alternatives and the cost of the status quo. - Price differentiation is the key enabler of a durable business - Pricing communication shapes the customer’s perception of value From [HBR on Pricing.PDF](https://drive.google.com/file/d/18VOzUyr6NsJdXVB7Eooi8DTcs-iKpkmu/view) ![[Pasted image 20250831221521.png]] References - [The Seven Principles of Pricing](https://www.pricingrevolution.com/?page_id=2) Garry Tang hit the pricing nail on the head (11:30 below) we he said that there are only 3 price points in software: - $5/seat - Consumer - $500/seat - SMB - $5000/seat - Enterprise There are plenty of circumstances where doesn’t hold, like government contracting and hardware infrastructure, but it’s important to embrace a simple frame like this before you convince yourself that you need more complexity that your customers will suffer through. From https://youtu.be/ASABxNenD_U?si=dcw6lI_HlbK_cDvi