Model pricing scenarios

---
name: model-pricing-scenarios
category: data
description: Model pricing scenarios across price, volume, mix, discount, retention, cost, capacity, tax, and customer response assumptions. Use when preparing a price change, packaging decision, promotion, or negotiation.
---

# model-pricing-scenarios

Treat price response as an uncertain range, not a guaranteed spreadsheet result.

## When to use

- Use for list-price changes, packaging, discounts, promotions, contract renewals, or new offers.
- Do not use protected traits, deceptive framing, unlawful discrimination, collusion, or unsupported claims about customer willingness to pay.

## Preconditions

- Define audience, products, segments, currencies, taxes, current price realization, cost boundary, and decision horizon.
- Gather transaction, discount, churn, competitive, capacity, and customer-research evidence with permission.

## Procedure

1. Reconcile baseline units, customers, net price, discounts, revenue, variable cost, and contribution.
2. Specify price and packaging changes by product, segment, channel, contract, and effective date.
3. Model volume, conversion, churn, expansion, contraction, mix, and discount response as explicit assumptions.
4. Include transition rules, grandfathering, billing timing, taxes, commissions, support, and capacity effects.
5. Calculate revenue, contribution, cash timing, customer impact, and operational demand.
6. Create base, downside, upside, and break-even cases with combined changes.
7. Segment carefully and audit for unfair or prohibited differentiation.
8. Design reversible experiments, guardrails, sample requirements, and stop conditions where feasible.
9. Record uncertainty, decision rights, communications, and a post-launch measurement plan.

## Worked example

A proposed 10% price increase is initially modeled as 10% more revenue. The revised model includes contract renewal timing, grandfathered accounts, higher discounts, churn ranges, and support demand. It shows break-even churn by segment and recommends a staged test with customer-impact guardrails instead of claiming one forecast is certain.

## Done

- A pricing model records reconciled baseline, price rules, response assumptions, contribution, cash timing, transition costs, and scenarios
- Break-even results, fairness checks, experiment guardrails, uncertainty, approvals, and post-launch measures are verified and documented