veripath/docs/architecture/economics-pricing-execution-guide-v1.md

# Economics & Pricing Execution Guide v1

## 1. Purpose & Non-Negotiables

This guide makes Layer 3 (Economics & Pricing Validation) of the Path to PoC fully executable.

It exists to force real owner-provided numbers into the economic model and pricing bands before any retainer conversation occurs.

**Non-negotiables (from Charter):**
- No invented client numbers.
- Every figure must be tagged Tier 1 (Verified) or Tier 2 (Indicative).
- Agents may draft the capture sheet and summary; a human must approve and lock the final numbers.
- If the owner declines to share key financial data, the layer closes as speculative (Tier 2 only) and all downstream work is flagged accordingly.
- The three pricing bands must remain within what the owner has indicated they are willing to pay.

## 2. Required Data Fields

Capture the following from the client owner. Mark every field as provided or declined.

| Field | Description | Required for Tier 1 |
|-------|-------------|---------------------|
| Monthly Revenue (or quarterly average) | Top-line revenue for the business | Yes |
| Monthly Ad / Marketing Spend | Total paid spend across all channels | Preferred |
| Estimated monthly cost of the top 1–3 threats | Owner’s own estimate of lost revenue or wasted spend caused by each verified threat | Yes (for each major threat) |
| Willingness-to-Pay (WTP) range – Band A | What they would pay monthly for detection-only (agent drafts alerts, human reviews) | Yes |
| WTP range – Band B | Detection + drafted response (agent drafts the reply, human approves before sending) | Yes |
| WTP range – Band C | Full escalation (detect + draft + next-action recommendation) | Yes |
| Business operating days / hours | Used later for workflow cadence realism | Preferred |
| Notes / context | Any qualitative comments the owner makes about value or constraints | Optional |

All numbers must come from the owner. Scraped or estimated figures are not allowed as Tier 1.

## 3. Conversation / Capture Structure

Keep the conversation short and practical (15–25 minutes).

**Suggested flow:**

1. Confirm the top threats from the locked Threat Register (Layer 2).
2. Ask: “Roughly how much do you think each of these is costing you per month in lost bookings or wasted spend?”
3. Ask for current monthly revenue (or a comfortable range).
4. Ask for current monthly marketing spend if they track it.
5. Present the three service levels in plain language and ask what monthly range feels reasonable for each:
   - Band A: We watch and alert you when something is broken or missing.
   - Band B: We watch, alert you, and draft the fix or reply for your approval.
   - Band C: We watch, alert, draft, and recommend the next concrete action.
6. Record exact words and ranges. Do not push for a single number.
7. Confirm understanding: “I’m going to document these as provisional ranges. Nothing is locked until you review the summary.”

Use a simple capture sheet (markdown or form) that mirrors the table above.

## 4. Converting Answers into Pricing Bands

- Record the owner’s stated range for each band exactly.
- Do not average, inflate, or “optimize” the numbers.
- If the owner gives a single number, record it as a range of ±10–15% and mark it Tier 2 until confirmed.
- If the owner gives no number for a band, leave that band blank and mark the entire pricing model Tier 2.
- Cross-check: The highest band the owner is willing to pay must still clear a realistic early-stage delivery cost floor (to be refined after the first real engagement). Until real delivery cost data exists, flag any band that appears extremely low as “requires cost validation.”

## 5. Tier 1 vs Tier 2 Rules

- **Tier 1 (Verified):** Owner stated the number or range in the conversation and later confirmed the written summary.
- **Tier 2 (Indicative):** Owner gave a rough gut-feel number, declined to be precise, or has not yet confirmed the written summary.
- Any field left blank or explicitly declined → entire economics package for that client is treated as Tier 2 and the risk is noted in the Layer 3 exit checklist.

## 6. Hard-Stop / Fallback Rule

If the owner declines to share revenue or any WTP ranges:

- Close Layer 3 with a single statement: “Owner declined to share economics data. All pricing bands and downstream commercial discussions are Tier 2 speculative only.”
- Do not invent benchmark numbers.
- Proceed to later layers only with the explicit understanding that any retainer conversation will be provisional.
- Document the refusal in the client economics file.

## 7. Artifact Structure & Repo Paths

**Cross-client model (reusable):**  
`docs/architecture/pricing-bands-v1.md`  
Contains the definitions of Bands A/B/C and the rules in this guide. Updated only when the method itself changes.

**Client-specific file:**  
`docs/clients/<client-name>/economics-v1.md`  
Contains the actual captured numbers, tiers, owner quotes, and the Layer 3 exit checklist for that client.

## 8. Layer 3 Exit Criteria Checklist

A human reviewer may lock Layer 3 only when all of the following are true:

- [ ] Capture sheet completed (or explicit refusal documented)
- [ ] Every provided number is tagged Tier 1 or Tier 2
- [ ] Three pricing bands are recorded as ranges (or explicitly left blank with reason)
- [ ] Owner has reviewed the written summary (or refusal is recorded)
- [ ] Client economics file exists at the correct path
- [ ] Any missing data is clearly flagged as blocking full commercial confidence

Once the checklist is satisfied, Layer 3 is locked and work may proceed to Layer 4.