PIC Pricing and Monetization Strategy Flashcards

What does 'price elasticity of demand' measure?

Answer: The sensitivity of demand to changes in price

Price elasticity measures how much the quantity demanded changes in response to a price change — high elasticity means demand is very sensitive to price.

Which of the following is a common pitfall when setting prices for a new B2B SaaS product?

Answer: Anchoring price too closely to internal development costs

Cost-based pricing ignores customer value perception and market conditions, often resulting in underpricing or misaligned positioning.

What is 'bundling' as a monetization strategy?

Answer: Packaging multiple products or features together and selling them as a combined offering

Bundling increases perceived value and average deal size by grouping complementary products or features into a single purchase.

According to Pragmatic Institute principles, who should own the pricing decision for a product?

Answer: A cross-functional team led by product management with market input

Pricing should be a cross-functional effort led by product management, informed by market research, finance, and sales data.

What is a 'land and expand' monetization strategy?

Answer: Entering accounts with a small deal and growing revenue through upsells and expansions

Land and expand starts with a low-friction initial sale to get into an account, then grows revenue by expanding usage, seats, or modules.

Which metric best indicates whether your pricing is aligned with the value customers receive?

Answer: Customer willingness-to-pay research and price sensitivity analysis

Willingness-to-pay research and price sensitivity analysis directly measure whether your price matches customer-perceived value.