How PMMs should think about pricing

A conversation with pricing consultant Saagar Mehta on the framework behind pricing decisions, who should own them, and what to do in your first 30 days.

Pricing is an interesting part of a product marketer’s life. Sometimes you’ll have barely anything to do with it. Other times it’s one of your key responsibilities and you’re expected to own it - or at least drive the conversation.

I’ve written about pricing before, and I’ve been responsible for it in several roles. But, a few months ago, someone grabbed me after an event I was speaking at and asked if I could provide more detail for someone who’s owning pricing for the first time. What to do, how to keep up with the trends, what to read. And I had to accept that I’m not a proper expert here. I know enough to be dangerous, but pricing has become a specialist discipline - especially now, when AI is reshaping consumer expectations about how they get charged for things.

So I wanted to have a more definitive conversation on how to think about pricing when you’re a product marketer. How to approach a pricing project. What the role of product marketing actually is in all of this. And what pricing looks like in this new era where tokens, credits, and consumption models are replacing the familiar per-seat world.

I got in touch with someone I’ve known for several years - Saagar Mehta, who founded Northlane, a pricing consultancy built specifically for VC-backed scale-ups. Saagar is one of a few people in Europe working at the sweet spot between pricing strategy and go-to-market, which made him the obvious person to go to for this topic.

We covered a lot of ground so I’ve split this into two parts. This week is about the fundamentals - how pricing actually works as a system, who should own it, and how to get started. Next week, we’ll get into what AI is doing to pricing and the practical trends reshaping how companies price their products.

Here’s what Saagar had to say.

What pulled you into the world of pricing?

It was by chance. I was a uni student trying to find a job, and I liked the pitch from the Simon-Kucher team that came to UCL. I applied for an internship, it went well enough, and they gave me a shot.

The things that pushed me forward were the team in London - great people and strong mentors - and then being able to rotate to the San Francisco office where I learned all about software and tech pricing. I brought some of that desire and energy back to London, and we worked on tech clients for a couple of years. But then I decided I wanted to go and work in a scale-up itself, and that’s when I joined Payhawk to see how it works from the inside. Northlane started a couple of years after that.

What is it about pricing that gets you excited?

It’s the ‘sunny side’ of consulting. We’re constantly thinking about growth.. That always resonated with me.

It’s rare for clients to feel like they’re nailing their pricing and have a concrete owner. So it’s rewarding as an advisor to have a topic where you go in and can actually add value from day one, based on patterns and the things you’ve seen in the past. And increasingly, this world of AI monetisation strategy is becoming one of the key topics we talk about with VCs and on podcasts. Discovering how tangible the outputs of this work can be, and how quickly it can flow to top-line growth, is exciting to see.

With Northlane, it feels like you’re trying to do things differently. What made you want to do that?

We started Northlane with the goal of wanting to work with the scale-ups we were a part of. I was at Payhawk, which is a fintech SaaS unicorn, and the type of advice that we would have given them when I was part of a bigger consultancy just wasn’t pragmatic or operational enough. Having now been on both sides of the table, we’re very much focused on the fact that this is a hugely important topic, and the frameworks and playbooks from bigger consultancies that had been doing this for years are good. But when you go down-market and try to work with fast-moving, dynamic, VC-backed firms, the approach has to be slightly different.

So that’s what we started out doing - being a more operator-minded advisory firm with a focus on pricing and go-to-market. And of course, AI now has provided us with even more tailwinds to drive the business forward.

You talk about pricing as an operating system with packaging, price model, and price levels as three distinct levers. Most people think about pricing as one thing. Can you break that down?

We think about it in stages. The first is actually upstream of what we’d typically call “pricing strategy.” This is your commercial strategy and go-to-market strategy. Who’s our ICP? What are our personas? What segments are we going after? What are the competitive dynamics? What’s our variable cost? Are we PLG, sales-led, channel-led? Understanding all of that and getting the strategic guidelines on pricing correct is first and foremost.

Then we break down pricing strategy itself. It starts with packaging - is it a good, better, best setup? Platform and modules? Use cases for different verticals or personas? An all-in-one? Those are the packaging decisions.

Then it’s what we call the value metric. That’s your unit of value - your “per X”. Is it per seat? Per text message? Per interaction? Per click? You can have multiple of those, and it can get more complex the closer you want to get to value.

Then it’s the price model. Is it a subscription where the customer pays upfront for the period? Or more of a consumption model where they pay in arrears after each action? What we’re seeing a lot more is a hybrid - you predictably cover some usage in a subscription, and then have a pay-as-you-go approach once they reach those limits. And then there’s tiering, overages, rollover - all the mechanics around that.

Only then comes the actual price point. That’s where you think about willingness to pay, competitive dynamics, cost floors, margins, and positioning in the market. Do you want to be a premium player? A cost player? And in the sales-led world, discounting structures, or in PLG, promotional strategy.

And then there’s a final phase we call the “own” phase - how do you empower the pricing owner to treat this as an evolving muscle? That’s governance, KPIs, billing and metering systems, quote-to-cash, and sales enablement. Making sure the value prop is connected to what sales are doing on the front line. So it’s not just about the price point. That’s actually the last thing you’d usually talk about.

Who typically owns pricing with the companies you work with?

It depends on the client. In more customer-minded companies, where they’re really trying to build product with the view of what customers need, we do see product marketing owning pricing quite a lot. Then on the other side, you might have more of an infrastructure-layer type business where it’s about understanding the finance elements, and you’ll see a RevOps type person who’s more data-oriented trying to be the point person.

Whoever it is, they need to have reach across the business, because pricing is such a cross-functional topic. So we’re seeing more and more of this landing on the desk of a Chief of Staff type role, because they have their eyes across the business and, most importantly, the autonomy and engagement from executives to actually make decisions.

And then in earlier-stage businesses, this is absolutely a CEO topic. On most of our engagements, the CEO is either the project sponsor or even the project manager, because pricing brings together the strategic vision of what you’re selling, the messaging for the market, how you run the business from a margin perspective, how you incentivise sales teams, how you build product that gives ROI. All of them are strategic fundamentals to growth.

How does positioning connect to pricing?

We think about it from two angles. One is price positioning - is this a market where we’re trying to be the premium player, or are we happy winning on price? Either is fine, by the way. Successful businesses have been built on both strategies. Think Apple versus Amazon. It’s about having clarity, and often there isn’t any.

On the other side, positioning translates into messaging to your ICP. And especially in early-stage startups, you’re just not that clear on what the ICP is. You’re taking deals where they can be done, learning more about the product, and trying to get to a position where you can confidently say this is our ICP - not just from a new business perspective, but from a lifetime value perspective.

Both feed into pricing strategy. Without them, doing packaging and pricing is quite difficult. You don’t know who you’re building the packages for, what their willingness to pay is, or whether you want to be charging 50% above the nearest competitor or 50% below.

If a product marketer has just been told “you own pricing now” - what should they do in the first 30 days?

The biggest challenge is getting alignment across the organisation. We always start our engagements with stakeholder interviews across all the people that are important to the topic. That serves two purposes: get broader context you might have missed, and get buy-in from the folks that are important to the problem.

I would then say make sure there is some sort of customer research involved. But make that research targeted. In the go-to-market world there is sometimes a habit of doing research for the sake of research and it doesn’t go anywhere. Have a hypothesis of the pricing change that you’re willing to test directly, and get the data on that to help you tell the story.

Then think about data analysis - win/loss ratios, reasons for churn, and how pricing correlates with that. But realistically, pricing strategy is art and science. And the thing that comes above all of that is the ability to tell the story and get decisions made. Pricing is the hardest topic to get alignment on, especially when there are different agendas coming from different parts of the business. But it is one of the biggest growth levers that can drive a business forward, and it’s often overlooked because of how hard it is to make those decisions and get that alignment.

My advice would be to mix art and science, use data when you can, but focus on the fact that you’ve got to get buy-in from stakeholders to actually make decisions.

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Saagar Mehta is the founder of Northlane, a pricing consultancy working with VC-backed scale-ups and startups. He previously worked at Simon-Kucher and Payhawk, and has led over 100 pricing projects with tech companies across Europe.

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Takeaways

What I found interesting about this conversation is that the advice for a product marketer approaching pricing for the first time sounds a lot like what a good product marketer should already be doing - stakeholder alignment, customer research, telling a story with data, and getting executive buy-in. So if you’re a PMM who has recently had pricing land on your plate, you’re applying skills you already have to a domain that just needs more deliberate attention.

Northlane’s Pricing OS framing is an extremely useful way of thinking about pricing. Most of us default to thinking about pricing as just the number. But packaging, value metrics, price models, and price points are all separate decisions that interact with each other. Thinking about them distinctly makes the whole thing less overwhelming.

Next week, Saagar and I get into what AI is doing to pricing - why seats-based models are under threat, why outcome-based pricing is harder than it sounds, and what the rise of credits and consumption models means for product marketers. It goes out to subscribers of The Product Marketer Plus on Tuesday next week - you can start a free trial right here.