The Cross-Functional Pricing Process
Stand up a pricing committee, mine demand and willingness-to-pay with structured surveys, then set price.
- Difficulty
- Advanced
- Time to result
- ~weeks to results
- Steps
- 3
- Confidence
- 90%
A repeatable process for setting an initial price or overhauling one. It starts by making pricing a cross-functional, owned exercise rather than a one-department decision, then separates two research questions — what customers want (demand) and how much they will pay (willingness) — each with specific survey instruments including feature-ranking, the 100-point allocation, and the Van Westendorp method.
Origin
Assembled by Naomi Ionita from running the product-growth pricing board at invoice2go; the Van Westendorp Price Sensitivity Meter is a third-party survey technique she incorporates.
Core principles
- 01Pricing is a cross-functional exercise, not a single-threaded one owned by one department
- 02Talking to customers is the most basic and highest-leverage way to learn how far you can push price
- 03Demand (what they want) and willingness-to-pay (what they'll spend) are separate questions needing separate instruments
How to run it
- 1
Form a pricing committee
Assemble a standing cross-functional team that owns and iterates on pricing. For PLG companies this is PMs and data scientists; for enterprise SaaS it is sales, finance, and RevOps.
Pro tip Commit the committee to iterating over time rather than treating pricing as a one-off project.
Watch out Do not let pricing live in a single department; it is inherently cross-functional.
- 2
Measure demand with feature ranking
Have customers rank features as must-have, nice-to-have, or not necessary. Or use a 100-point allocation: give users 100 points to spend across features — more points signal more value.
Pro tip Usually only one or two features are the real carrots for conversion; find their relative rank rather than assuming all features convert equally.
Watch out Beware customers who say they want everything but the kitchen sink; the point-allocation forces real prioritization.
- 3
Measure willingness to pay with Van Westendorp
Take the must-have and nice-to-have features as a package and ask four questions: at what price is it so cheap you question quality; what price is a good deal; what is expensive but you'd still pay; and what is prohibitively expensive. Plot the four curves to inform price.
Pro tip This method marries the demand questions with the willingness-to-pay questions in one survey structure.
In the wild
Ionita cites an OpenView SaaS benchmarking survey showing roughly half of companies that instituted a pricing change saw at least a 25% increase in ARR, and a ProfitWell study of 500+ SaaS companies finding a 1% improvement in monetization moved the bottom line about 4x as much as the same improvement in acquisition.
→ Establishes pricing work as one of the highest-ROI growth levers, and one most companies regret not doing sooner.
Common mistakes
Making pricing a single-department decision
Pricing spans product, data, sales, finance, and RevOps; owning it in one silo produces a price disconnected from either demand or commercial reality.
Skipping direct customer research
Without surveys and interviews you never learn how far you can push price, which is the most basic lever available.
Is it for you?
Best for
Founders and growth leaders setting an initial price or running a structured pricing overhaul
Not ideal for
Very early teams with too few customers to generate meaningful survey data
From the transcript
“I'd encourage you to put together a um pricing committee this is not a single threaded exercise that lives in one department or another this…”
“have people rank them as a must-have nice to have or not necessary that help us understand the relative prioritization you can also get at…”
“ask them what's such a cheap price that you start to question the quality of the product ask them what's a good deal or sounds…”
“roughly half of companies that instituted a pricing change saw at least a 25 increase in ARR”
From the episode
How to price your product
Naomi Ionita (Menlo Ventures)