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
Conduct price sensitivity research
- 2
Ask about purchase likelihood at various prices
- 3
Plot demand curve
- 4
Identify price elasticity
- 5
Find optimal price point
- 6
Test price with small segment
- 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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