Your competitors are telling you their strategy

A product manager’s guide to reading between the pricing tiers

When I’m interviewing product managers, I often ask them about their approach to competitive analysis.

Many look at it the wrong way and ask “what features are my competitors shipping so I can keep up with them.”

Instead, I encourage them to frame it differently – competitive analysis is about understanding your competition’s strategy so you can make a deliberate choice about where to play.

It’s really easy to keep a list of features your competition is shipping. Follow their blog or release notes in the app store where they describe each feature.

Meanwhile, your competition isn’t publishing a strategy document anywhere. So how do you understand it?

If you look carefully, you’ll be able to see their strategy written out on one key page – their pricing and features page.

In this article, I do a breakdown of Kit’s pricing page. Kit would position themselves as an “operating system for creators”, but what does it actually mean? It’s clear they’re trying to position themselves differently from their top competitor, Substack, and now it’s time to figure out how that translates to their strategy.

How to figure out company strategy from a pricing page

A pricing page reveals far more than how much a product costs. It’s a strategic document that shows who a company wants as customers, how they plan to grow, and where they see their future. Here’s the framework I use to decode strategy from pricing:

1. Target Market Identification: Look at who they explicitly name as their ideal customer and, just as importantly, who they exclude. The language choices, feature emphasis, and price points all signal who they want (and don’t want) using their product.
2. Revenue Model Analysis: What drives their pricing? Whether it’s users, usage, or features, their core value metric reveals their bet on where customer value lives. Look for secondary revenue streams too – they often hint at future strategic directions.
3. Premium Value Proposition: The features reserved for premium tiers tell you what the company believes their most valuable customers need. These upsells reveal both their current focus and where they see future opportunities.
4. Competitive Positioning: How do they compare themselves to competitors? The differentiators they highlight and the market segments they ignore tell you where they’ve chosen to compete – and where they haven’t.
5. Future Direction: As you put together the previous points, it should become more clear where the company is headed. Search for any additional clues that might indicate what they’re thinking.

Let’s use this framework to analyze Kit’s pricing page and see what it reveals about their strategy.

Target market identification: Looking for individuals, not enterprises

When analyzing a pricing page for target market insights, you want to identify both explicit statements about ideal customers and implicit signals in the pricing structure, feature set, and language choices. This reveals who the company sees as their most valuable customers and, by extension, where they’ve chosen to compete strategically.

Kit positions themselves explicitly as being “For creators who mean business.” Their homepage describes them as an “email-first operating system for creators building a valuable business.” This repetition of the word “creators” is deliberate – they’re not just looking for newsletter writers, they want creators who are building multi-product businesses.

For creators who mean business

Kit (formerly ConvertKit) is the email-first operating system for creators building a valuable business

While they started with newsletters, their language shows they’re trying to expand beyond that to fuel creator businesses more broadly. Under the “features” of their page are four main categories: grow, send, automate, and earn. Already, their feature set expands beyond email to basic ecommerce functionality.

What’s equally telling is who they don’t want– enterprises. They switch to a “call us” pricing model after 500k users. This is reinforced by what’s missing from their feature list – no Single Sign-On (SSO), no Role-Based Access Control (RBAC), and notably, not a single mention of the word “enterprise” anywhere on their site.

This deliberate choice helps them avoid costly support burdens while maintaining their community focus on serious individual creators and small media companies.

Revenue model analysis: Income per subscriber

When examining a pricing page, the revenue model reveals fundamental strategic choices about how a company plans to capture value. The way a company structures their pricing – whether through subscriptions, usage fees, transaction fees, or some combination – shows their beliefs about:

1. Where value is created for customers
2. How that value will grow over time
3. Which customers they expect to be most profitable

Kit’s revenue model reveals three key strategic bets:

1. List size indicates creator potential – pricing that scales with subscriber count shows they believe bigger audiences lead to more monetization opportunities
2. Multiple revenue streams create stickiness – by taking small cuts across newsletters, products, and referrals, they make switching costs higher as creators use more features
3. Creator independence and optionality – their lower transaction fees and support for off-platform monetization suggests they want creators to keep more of their earnings while providing tools to diversify revenue streams

This alignment of incentives reveals their strategic bet – that helping creators build valuable subscriber relationships will drive sustainable growth for both creators and Kit.

Detailed pricing model analysis

Kit’s pricing strategy has two dimensions: a three plan selection with a multiplier based on the size of your audience.

The “Newsletter” plan is a direct Substack competitor and their free tier. It’s available for up to 10k subscribers, allows you to run a paid newsletter, and opens up list growth through landing pages.

The “Creator” plan introduces more differentiators. It allows for visual automations and sequences, the tools you need to nurture your audience (and features Substack doesn’t offer). It unlocks their smart recommendation engine, which can accelerate your subscriber growth through automatic referrals from other newsletters.

Finally, the “Creator Pro” plan unlocks paid referrals for even more newsletter growth and advanced analytics so you can understand where your traffic comes from.

First, they bet on creator success – as your subscriber count grows, so does their revenue. And they’re betting that analytics become a no-brainer for larger lists.

I mapped out the pricing tiers – at the beginning, Creator is half the price of Pro. By 5k subscribers, Creator is 70% the cost of Pro. It breaks 80% at 125k. It maxes out at 88.5% once you hit 400k subscribers.

For their more sophisticated users, Kit anticipates additional revenue beyond the subscription fee.

Most notably, they take a 23.5% advertising fee from their paid recommendations feature. This creates a virtuous cycle – creators with strong lists earn more by promoting other creators, and Kit takes a cut. Creators who want list growth can pay for new subscribers.

The more subscribers Kit has across all their platform, the more powerful this engine becomes. This is why sharing your audience with the subscriber growth engine is required at the free tier.

Looking at their detail page, Kit charges much lower transaction fees than competitors – credit card fees plus 0.6%, compared to Substack’s 10%. But they make up for this with other revenue sources.

This multi-stream approach lets Kit price the subscription aggressively while still capturing upside from successful creators. They’ve decided to combine SaaS MRR from email with variable revenue from commerce and recommendations.

Premium value proposition: Analytics to understand CAC

When analyzing premium value proposition on a pricing page, look carefully at what features a company reserves for paid tiers versus what they give away.

This distinction reveals their strategic beliefs about what drives customer value and retention. Free features typically represent table stakes functionality the company believes is necessary to get users started. Meanwhile, premium features show where the company thinks the real differentiated value lives – these are capabilities they believe customers will actively pay more to access.

Kit’s free plan provides the basics – what you need to run a paid newsletter and grow through landing pages. But it’s in the “Creator” and “Pro” plans where Kit reveals what they believe their most valuable customers need.

The Creator plan introduces tools for nurturing and converting your audience – visual automations and sequences that Substack doesn’t offer. These features help creators improve their subscriber lifetime value (LTV). Combined with their smart recommendation engine for automatic referrals, creators can start optimizing their funnel from acquisition through monetization.

For instance, I can use Kit to market my upcoming Business Case Bootcamp. Anyone who clicks on this link from their email will get a follow-up email from me with more information about the bootcamp. (Unfortunately it doesn’t work on the website.) Point being, the creator tools are what you use to convert people from readers to customers.

The Pro plan then adds advanced analytics and paid referrals – critical tools for understanding your customer acquisition cost (CAC) and optimizing your LTV:CAC ratio. This allows creators to accurately determine how much they should be willing to pay for a new subscriber.

At some scale, understanding your LTV:CAC ratio becomes critical to continued growth. Kit’s pricing makes this clear – as your business scales, the cost of not having these analytics tools outweighs their price.

Their most successful customers aren’t just building audiences; they’re building sustainable businesses with clear unit economics and optimized acquisition strategies.

Competitive positioning: We grow when you earn

When analyzing competitive positioning on a pricing page, look carefully at what features a company highlights versus their competitors’ offerings.

This distinction reveals their strategic beliefs about where they can win in the market. Features they match competitors on typically represent table stakes functionality they believe is necessary to even be considered. Meanwhile, features they emphasize as differentiators show where they think their competitive advantage lives – these are capabilities they believe will convince customers to choose them over alternatives.

While Kit started in newsletters, they position themselves deliberately against Substack’s publishing platform approach. This shows up clearly in how Kit talks about Substack – Substack is for writers who want to publish, Kit is for creators who want to build businesses.

This positioning shapes their entire fee structure. Substack takes 10% of paid newsletter revenue, betting on helping writers monetize through subscriptions and charges credit card fees on top of that. Kit instead charges much lower transaction fees (credit card fees plus 0.6%) while making money on subscription fees and the other revenue streams.

With a 15k list, a $15/mo paid newsletter and a 1% free-to-paid conversion rate, Kit becomes economically preferable to Substack. But a quick sensitivity analysis shows that if that conversion rate goes up to 3%, or the average revenue per paid subscriber goes up to $40, that pricing difference tilts in Kit’s favor at any size newsletter.

This circles right back to their value proposition: if you can monetize your list beyond a paid newsletter, which Kit is designed to do, Kit provides better value.

Future direction: Expanding creator ecosystem features

When analyzing pricing pages for hints about a company’s future direction, look for features and capabilities that suggest where a company is heading. This includes:

1. Features that are partially implemented or in beta
2. Language that hints at expanded capabilities
3. Pricing structures that leave room for new revenue streams
4. Integration points that could evolve into fuller offerings
5. Premium features that could become more central to the product

The way a company prices and positions these emerging capabilities often reveals their beliefs about future market opportunities and where they plan to invest.

Given Kit’s pricing strategy and market positioning, we can predict several possible directions for their feature investments.

First, they’ll continue investing heavily in list quality. They want you to monetize the names on your list. That means helping you grow with subscribers who can drive revenue.

I would also predict more ecommerce features. They’ve already got basic landing pages for products, but given their focus on helping creators build businesses, we should expect more robust business tools.

Most interestingly, their focus on analytics and audience understanding suggests an opportunity for AI integrations. I would guess AI-driven segmentation is coming. Imagine automatic identification of which subscribers are likely to convert to specific products, with direct integration into nurture campaigns. This would align with their strategy of helping creators maximize subscriber value.

This focus on analytics reveals a key truth about competitive analysis: the insights we gain should directly inform our own strategic decisions. Just as Kit’s pricing page reveals their strategic vision to be an operating system for creators, every business case we write should show this same level of strategic clarity.

Beyond features: Using pricing pages for strategic competitive analysis

Product managers often track competitor features, but as we’ve seen with Kit, pricing pages reveal deeper strategic insights:

1. Target Market Clarity: Kit’s pricing shows they’re deliberately avoiding enterprise customers to focus on individual creators
2. Revenue Strategy: Their multi-stream approach reveals a bet on creator monetization beyond newsletters
3. Growth Philosophy: The pricing structure demonstrates they want to grow with their customers’ success
4. Competitive Positioning: Lower transaction fees but higher subscription costs shows where they believe they can win against Substack

These insights go far beyond “what features should we build?” to answer the more fundamental question: “where should we compete?” This is the essence of good competitive analysis – understanding not just what competitors are doing, but why they’re doing it.

Want to learn more about turning competitive insights into compelling business cases? Join my upcoming Business Case Bootcamp where we’ll explore the theory behind this analysis.