The last step of your monetization strategy is the most visible: your actual price.

The goal isn’t to find the perfect number. Pricing isn’t an exact science. It’s a process of narrowing the range and iterating. What matters is landing in the right ballpark, learning from the market, and refining as you grow.

There are three standard approaches. You don’t have to pick just one. Most companies use a mix.

Three Approaches to Pricing

Value-Based Pricing

Earlier, you identified the thing your customers pay for (features, usage, or outcomes). Value-based pricing builds on that by asking: what is your market willing to pay for each unit of that thing?

Willingness to pay (WTP) is shaped by:

• Demand conditions (seasonality, supply/demand balance, economic climate)
• Perceived value (brand, quality, exclusivity, outcomes delivered)
• Persona traits (budgets, disposable income, risk tolerance)

Quick WTP Tool: Four Questions

These are from the Van Westendorp method, simplified for startups. Ask prospects or customers:

1. At what price would this feel too expensive to ever consider?
2. At what price would this start to feel expensive, but still worth considering?
3. At what price would this feel like a good deal?
4. At what price would this feel so cheap you’d question the quality?

Answers to these questions help you triangulate a reasonable price band. No graphs or spreadsheets required at this stage. Directional input is good enough.

Cost-Plus Pricing

A good fallback if you lack customer data or just need to get something out the door immediately.

Formula:

Price = Costs + Target Profit Margin


Make sure you’re including all costs (overhead, tools, support, salaries) — founders often underestimate.

Useful for any product with clear unit costs.

Competitor-Based Pricing

Always worth doing, but never enough on its own. Again, unless you just need something quick and dirty today. Look at:

• What your closest competitors charge
• How customers react (reviews often mention “too expensive” or “good value”)
• Where you want to position relative to them (premium, parity, discount)

This gives you context, but your differentiation should ultimately dictate your price, not theirs.

How This Ties Back to Guardrails

Whichever method you use, pressure-test your outcome against your growth guardrails, model-market, and model-channel alignment.

• Does this price yield the ARPU you need?
• Can it support your target CAC and payback period?
• Does it fit your runway and cash flow reality?

A “good” price isn’t just what feels right to customers. It’s one that makes your engine viable.