Pricing strategy examples: How businesses use price to drive growth

Every business needs a pricing strategy. The right approach helps you maximize revenue, stay competitive, and position your product effectively in the market.

In this guide, we’ll break down what a pricing strategy is, share real-world pricing strategy examples, and show you how different methods can shape your business growth and profitability.

What is a pricing strategy?

A pricing strategy is the method your business uses to set prices for its products or services.

Pricing affects how customers perceive your brand, how competitive you are in the market, and how profitable your business can be.

Different strategies support different goals. Some focus on maximizing margins, while others aim to capture market share or strengthen a premium brand position. 

Overall, the best pricing strategy depends on your business model, customer expectations, and long-term growth plans.

Why pricing strategies deserve more attention

It may sound simple, but not all companies are prioritizing pricing strategies.

However, small price moves can create outsized results. In fact, McKinsey found that a 1% lift in average price yields a 7%-8% jump in operating profit for most industries—far more than equivalent improvements in volume or cost. 

Effective pricing is also:

• Twice as powerful for growth as improving customer retention, and
• Four times more powerful than spending on customer acquisition.

Despite this, nearly one‑third of pricing decisions among the world’s 1,200 largest firms fail to capture the best possible price. For founders, marketers, and finance leaders alike, sharpening your pricing strategy is often the fastest path to healthier margins and reinvestment capacity.

Pricing strategies at a glance

Here’s a quick comparison of the most common pricing strategies, when they work best, and what risks businesses should watch out for.

The 8 most common pricing strategy examples

Once you understand the big picture of how different pricing strategies compare, it’s useful to look at how they actually play out in practice.

Below, we’ll walk through detailed examples of how businesses apply cost-plus pricing, value-based pricing, penetration pricing, and more—plus when each approach tends to work best.

1. Cost-plus pricing

Cost-plus pricing is one of the simplest and most traditional methods businesses use. You calculate the total cost to produce a product or deliver a service, then add a fixed markup to set the final price. 

For example, a furniture manufacturer might produce a chair for $100 and apply a 40% markup, selling it for $140.

It’s easy to apply, but it doesn’t account for what customers are willing to pay—or how competitors are pricing similar products.

2. Value-based pricing

Value-based pricing focuses entirely on what the customer believes a product or service is worth. It’s common in industries where the solution provides measurable savings or strategic advantages, like SaaS, consulting, or luxury goods.

For example, a CRM platform that helps sales teams close more deals may charge $5,000 per year—not because it costs that much to deliver, but because the platform’s perceived value justifies the price.

When done well, value-based pricing often leads to:

• Higher margins
• Stronger customer loyalty
• Better alignment between product outcomes and pricing

The biggest challenge is staying close to customer needs and market shifts—what feels high-value today may not hold the same weight six months from now.

3. Competitive pricing

Competitive pricing is about aligning your prices to what others in the market are charging. In industries where products are easy to compare—like retail, software, or consumer goods—it can help protect market share and drive volume.

For example, a retailer on Amazon might adjust prices daily to stay a few dollars below similar listings. The tradeoff: relying too heavily on competitor prices can squeeze margins and make differentiation harder over time.

4. Penetration pricing

Penetration pricing sets an intentionally low entry price to build a customer base quickly. Subscription apps, consumer fintech platforms, and new SaaS tools often use this approach when entering competitive markets.

A new business banking app, for example, might offer free accounts and zero-fee transactions during the first year, building trust before introducing premium features later. The strategy works best when there's a clear long-term plan for monetization.

5. Price skimming

Price skimming is about maximizing revenue from early adopters before opening up to broader markets. You launch at a high price, then lower it gradually.

Key factors that make skimming successful:

• Strong brand loyalty
• Clear innovation advantage
• Ability to manage customer expectations as prices change

Tech companies, especially hardware brands, use this method during product releases. Early customers are willing to pay a premium for first access. Over time, as competitors catch up or the technology matures, prices drop to capture a wider audience.

6. Dynamic pricing

Dynamic pricing changes based on real-time supply and demand. Ride-sharing apps like Uber and airlines use it to balance peak demand with limited supply.

While it can drive higher profits, customers can feel alienated if prices fluctuate too frequently without transparency.

7. Bundle pricing

Bundle pricing combines multiple products or services at a single discounted rate. A cloud platform might package storage, security, and compliance tools into one subscription, offering more value than selling each piece separately.

Bundling helps increase average deal size and encourages customers to commit to more services up front.

8. Psychological pricing

Psychological pricing uses small visual tricks to influence buyer perception. 

Listing a product at $99 instead of $100 makes it feel significantly cheaper, even if the difference is minimal.

Retailers and online shops apply this almost universally to nudge customers toward faster purchasing decisions.

Which pricing strategy is best for your business?

Early-stage businesses often use pricing strategies like penetration pricing or competitive matching to build traction quickly. As companies mature, many shift toward value-based pricing, bundling models, or dynamic approaches to protect margins and maximize long-term profitability.

Ultimately though, the best pricing strategy depends on your goals, your product, and your customers.  

There’s no universal answer—but a few questions can help guide your decision:

• Are you trying to maximize profits or build market share? If profit is the priority, value-based pricing or price skimming might fit. If you need rapid adoption, penetration pricing could make more sense.
• How competitive is your market? In highly competitive spaces, competitive pricing or bundling strategies can help you stay relevant without starting a price war.
• How sensitive are your customers to price? If small changes in price cause big shifts in customer behavior, strategies like psychological pricing or dynamic pricing might offer an advantage.
• What does your brand stand for? Premium brands often avoid heavy discounting or penetration tactics because it can dilute perception. Value-based or skimming strategies are often better fits.

An important thing to consider is that pricing isn’t a set-it-and-forget-it decision. 

Even after you choose an approach, monitoring performance and staying flexible is key. As markets change, customer expectations shift, and competitors evolve, your pricing strategy should evolve too.

Supporting smarter pricing decisions over time

Building a pricing strategy is only the beginning. Staying flexible—adjusting to changing market conditions, customer behavior, and internal goals—is what keeps a business competitive over time.

As your strategy evolves, it helps to have a financial system that evolves with you. 

Rho’s platform gives businesses real-time visibility into cash flow, spend, and liquidity, making it easier to support new pricing moves with confidence. 

Whether you’re experimenting with new offers, expanding into new markets, or fine-tuning margins, better financial control helps translate pricing decisions into sustainable growth.

Learn more about how Rho helps scaling businesses stay financially agile today.