Skip to content
Pricing Strategy Handbook
Back to the Magis Global Handbooks

CH15 Worksheet — The Four Elements of Price Validation Design

Answer in the Worksheet Writer and save as Markdown

Source: KM066 “The Four Elements of Validation Design” (primary_note: MN08) — what to verify, metric, method and plan, feedback data. This worksheet is for turning one price hypothesis into a testable experiment. The current Pricing Harness has no dedicated feature for storing or tracking this record (see CH15, Section 6), so manage it through this document or an equivalent separate record.

0. Price Hypothesis

Write the price-related claim you want to check right now as a single sentence that can be judged true or false.

  • Hypothesis:
  • Component this hypothesis rests on (check all that apply): [ ] Cost structure [ ] Value-based pricing [ ] Segment/channel [ ] Revenue model [ ] Other ( )

1. What to Verify

  • Among the hypothesis above, what part is most uncertain right now, or would have the biggest impact if wrong?
  • Why does this part need to be checked first, right now?
(narrative)

2. Metric

  • What will tell you whether this hypothesis held or not?
  • Examples: quote close rate, frequency/depth of discount demands during negotiation, repeat purchase rate in a specific segment, price resistance by channel, etc. — list only indicators you can actually observe and record.
MetricDefinitionCurrent value (if any)Decision threshold (what result keeps / revises / discards the hypothesis)

Note: The source material does not provide a universal threshold such as “N cases is enough” (KM066). Set the decision threshold yourself for this validation only, weighing the size of this decision together with the risk if it turns out wrong.

3. Method & Plan

  • What method will you use to check it? (Interview / VOC / key-man survey / sending an actual quote / small-scale channel or segment test, etc.)
  • Who is the target, by when, and over what scope (sample size / time frame)?
  • Is this experiment small, repeatable, and within affordable risk? (Check that it is not a full-scale price overhaul or a hard-to-reverse decision.)
Method:
Target:
Time frame / scope:
Affordable-risk check:

4. Feedback Data

  • Record the validation result. (Not just success/failure — specifically which assumptions held and which were off.)
  • Does this result shake only the price itself, or does it also shake assumptions in other components (cost, value, segment, channel, revenue model)?
  • If assumptions were shaken, which component/chapter needs to be reopened?
Result record:
Assumptions shaken:
Component to reopen:

5. AI Usage Boundary Check (based on KM071)

  • Did you specify which parts of this validation were handed to AI (summarizing material, comparing patterns, drafting, etc.)?
  • Was there a point where field data and AI inference conflicted? If so, which did you prioritize?
  • Was the final decision (keep / revise / discard the price) made by a human?
(narrative)