Growth-stage DTC brand
Pricing architecture redesign.
A growth-stage DTC brand had a pricing architecture that was a legacy of early-stage decisions — flat pricing, no tiering, and a reluctance to adjust prices that was leaving significant revenue on the table.
The challenge
The brand offered a single price point for its core product, with limited bundling and no subscription option. Customer research revealed significant willingness to pay more for premium configurations, but the product and pricing architecture didn't support it. Competitors were starting to capture the premium segment.
Our approach
We conducted pricing research combining quantitative methods (conjoint analysis, Van Westendorp) with qualitative customer interviews focused on value perception. The research revealed clear customer segments with distinct price sensitivities and feature preferences. We used these insights to design a tiered pricing and packaging architecture.
System design
We designed a three-tier pricing architecture with a core, premium, and subscription offering. Each tier was designed around distinct customer value drivers, with clear upgrade paths between tiers. We also restructured product bundling to increase average order value and designed a subscription option for the brand's consumable products.
Outcomes
Average revenue per customer increased by 31% within four months of launch. The premium tier captured 22% of sales at a significantly higher margin. The subscription option drove predictable recurring revenue and improved customer lifetime value by 40%. The brand's overall revenue grew 18% without any increase in acquisition spending.
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