Pricing & Monetization

Demand Curve / Price Sensitivity

Demand Curve analysis shows how quantity demanded changes with price. Understanding price sensitivity guides optimal pricing and identifies where to compete.

When to Use This Framework

Setting optimal prices
Understanding customer price sensitivity
Competitive positioning
Revenue optimization

How to Apply This Framework

  1. 1

    Conduct price sensitivity research

  2. 2

    Ask about purchase likelihood at various prices

  3. 3

    Plot demand curve

  4. 4

    Identify price elasticity

  5. 5

    Find optimal price point

  6. 6

    Test price with small segment

  7. 7

    Scale if successful

Real-World Examples

SaaS testing annual plan discounts

B2B software finding enterprise price threshold

Mobile apps optimizing IAP pricing

Strengths

  • Data-driven pricing
  • Maximizes revenue
  • Considers customer economics

Limitations

  • Requires customer research
  • Elasticity can be hard to measure
  • Shifts with competition

Related Frameworks

Consider combining this framework with:

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