top of page

The PPP Hierarchy - Building a Robust Pricing Strategy from the Ground Up

  • Writer: Jan Pasternak
    Jan Pasternak
  • Mar 20
  • 1 min read

ree

A foundational error many SaaS companies make when approaching pricing is skipping straight to pricing, without building the essential layers beneath—Positioning and Packaging. Enter the PPP Hierarchy, a structured approach ensuring alignment and success in your pricing strategy.


What is the PPP Hierarchy?

The PPP hierarchy stands for Positioning, Packaging, and Pricing. It emphasizes that your Pricing decisions must rest on solid positioning and thoughtful packaging. It's akin to building a house: pricing is your roof, but without a solid foundation and sturdy walls (positioning and packaging), your roof won't hold.


Common Pitfalls of Ignoring the PPP Hierarchy

Many companies rush into pricing based on what competitors charge or anecdotal experiences from sales conversations. However, this method ignores:

  • Misalignment with customer segments and needs.

  • Disjointed sales approaches.

  • Difficulty in justifying prices to customers, leading to poor conversions and low sales velocity.


How to Use the PPP Hierarchy Effectively

  1. Positioning: Define your ideal customer clearly, understand their primary pains, and how your solution uniquely addresses these pains compared to competitors.

  2. Packaging: Align your features into compelling packages tailored to different customer segments and needs. Determine feature bundling based on value, usage patterns, and willingness to pay.

  3. Pricing: Only after the above two steps are clearly defined, can you confidently price your packages to match the perceived value.


Organizational Alignment and Strategy Validation

When adopting the PPP hierarchy, it’s essential to engage all relevant internal stakeholders: Product, Marketing, Sales, and Operations. Collaboratively validating each stage ensures company-wide buy-in, consistent messaging, and ultimately a more successful market launch.


Practical Tip: Always verify your positioning through real-world customer conversations before finalizing your packaging and pricing.

 
 
 

Comments

bottom of page