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    Pricing

    Pricing advisory is setting what a company charges using its cost structure, its customers' willingness to pay and its competitive position, then choosing the model it invoices under.

    Capability

    How we help with Pricing

    Pricing is the fastest lever in any business and the one least often pulled deliberately.

    1. Establish what the cost structure allows

      The floor. What the business must charge to be viable at its current cost base, and how that changes with volume.

    2. Find what the customer will actually pay

      Willingness to pay tested against real buyers rather than inferred from a competitor's public price list.

    3. Choose the model, not just the number

      Per seat, per transaction, tiered, usage based. The model decides how revenue scales and it is harder to change later than the price itself.

    4. Plan the change

      Existing customers, contracts and the sales team all need a version of the story. Most pricing work fails at this step rather than at the analysis.

    What Pricing delivers

    • Target pricing

      What the market will pay, and the methodology behind the number rather than a guess dressed as one.

      • Value-based and competitor-anchored methods
      • Willingness-to-pay evidence from your own customers
      • A target price with the assumptions written down

    • Cost structure

      Direct and indirect cost, so the target price is tested against what it actually has to cover.

      • Direct cost by product and channel
      • Indirect cost allocation that survives scrutiny
      • Contribution margin at the price you intend to charge

    • Pricing strategy

      How you enter the market with the target in mind, even where the first price is not the final one.

      • Penetration, skimming and tiering, chosen for the segment
      • The path from launch price to target price
      • Discount rules that do not erode the ladder

    • Pricing models

      How the client is invoiced. A success fee sounds attractive until the team's salaries fall due before the success does.

      • Subscription, usage, retainer, milestone and success-fee models
      • Cash timing under each model, not only revenue
      • The model your contracts and collections can actually run

    How a pricing engagement runs

    1. 01

      Evidence

      Historical contracts, win and loss reasons, and the cost structure already captured in the FP&A model.

    2. 02

      Target

      The price the market supports, set by method, with the range and the assumptions stated.

    3. 03

      Strategy

      The route to that price for your segment and stage, with the discount rules written before the first negotiation.

    4. 04

      Model

      The invoicing model tested against cash, contracts and collections, then rolled into the forecast.

    Why SRF for Pricing

    • Pricing is treated as a finance decision with market evidence, not a marketing guess
    • The cost structure comes from the same FP&A model that runs the forecast, so price and margin agree
    • Four aspects, one engagement: target, cost, strategy, model

    FAQ

    Questions founders ask about Pricing

    How do we know our pricing is wrong?

    The common signals are a win rate that is too high, discounting that has become routine, customers who never question the price, and a gross margin that does not improve with scale. Any one of them is worth investigating.

    Should we price against competitors?

    Competitor pricing tells you what the market is anchored to, not what you should charge. Pricing to a competitor's number imports their cost structure and their strategy into your business, and you can see neither.

    How often should pricing be revisited?

    At least annually, and always when the product, the cost base or the buyer changes materially. The most common failure is not pricing badly at launch, it is pricing once and never again.

    Will raising prices lose customers?

    Some, and that is usually the point. The question is whether the revenue gained from those who stay exceeds the revenue lost from those who go, and that is measurable before you commit to it.

    Find out where you stand

    What our research says about Pricing

    At 20% contribution margin, a 10% discount requires you to double your business to be no better and no worse off than before you gave it.

    Sriram Chidambaram, in The discount breakeven table every salesperson should carry

    Every ninety-day payment term accepted without pricing it is a permanent three-and-a-half percent discount that will never show up in any report you read.

    Sriram Chidambaram, in Every large corporate has a VP of Pricing. Your startup has nobody.

    If your deals span 49 to 95 on the same product, roughly half your pricing is being decided by something other than policy, usually which salesperson handled it and how hard the buyer pushed.

    Sriram Chidambaram, in The pocket price waterfall: finding the 20% you never knew you gave away

    Guides and downloads on Pricing

    E-books and masterclass material from the SRF library, free to download.

    The people behind Pricing

    Pricing is run by the studio team: one multidisciplinary team whose pods work in tandem, matched to the sector and the stage the company is in.

    Karthik Beknal

    Financial Planning & Analysis pod

    Led by Karthik Beknal

    Lead - Strategy Consulting & FP&A. Plans, forecasts and tracks performance.

    See the pod structure
    Studio TeamThe operators, investors and builders who run engagements end to end.Meet them

    Where we apply Pricing: the industries this capability serves

    What usually runs alongside this