The 5Ps Framework for Pricing Strategy

A good pricing strategy is part science, part storytelling. It needs to drive margin, resonate with your audience, and reinforce your brand's position in the market. This framework breaks it down into five actionable elements to help founders, marketers, and operators build sustainable pricing models that do more than just cover costs.

1. Positioning

Before pricing a product or service, ask: Who is this for, and what space does it occupy? Premium brands command premium prices because their entire ecosystem—from packaging to support—supports that perception. Misaligned positioning leads to confused customers and missed opportunities.

2. Perception

Perception is the gut check—how the price feels. A $60 face cream can seem luxurious or outrageous depending on your site's UX, product copy, and visuals. Pricing psychology leans heavily on perception: subtle design changes can shift whether something is viewed as a value or a stretch.

3. Packages

Bundles and pricing tiers reduce friction. They give customers choice while guiding them toward higher-value options. Done right, packaging drives AOV and helps eliminate decision paralysis. If you're a service provider, consider time-based packages (e.g. monthly strategy calls, 3-month sprints). If you're DTC, think bundles (starter kits, refills, or bestsellers).

4. Psychology

This is where small changes make big impacts. Use price anchoring (showing a $297 plan next to your $97 core offer), charm pricing ($19.99 instead of $20), and scarcity ("Only 3 left!") to nudge customers toward conversion. These tactics work because they tap into human behavior—done tastefully, they can boost revenue without devaluing the brand.

5. Profitability

This is the guardrail. Make sure your pricing strategy allows for a healthy margin after factoring in CAC, COGS, and fulfillment. Model scenarios for discounting, promotions, and returns. Don’t just look at AOV—keep a tight eye on LTV, especially if you’re relying on subscriptions or high-repeat-purchase behavior.

Implementing an Analytics Plan to Support Your Pricing Strategy

A thoughtful pricing strategy is only as strong as the data behind it. Implementing an analytics plan means tracking not just revenue, but customer behavior around pricing—what they click, where they drop off, and which price points convert best. Start by integrating tools like Google Analytics 4 for funnel tracking, Hotjar for heatmaps and scroll depth, and Meta Pixel or UTM tagging to understand channel attribution. Over time, layer in A/B testing for different price points and monitor downstream metrics like LTV and churn to ensure your pricing isn’t just driving conversions—but driving the right ones.