How can prompt design reduce API costs?

Keep the stable part of the prompt (system instructions, schemas, examples) byte-identical so prompt caching applies — cached input is much cheaper. Cap output length and request only the fields you need, since output tokens cost several times more than input. Avoid resending large context every turn; summarise history or retrieve only relevant chunks. Route simple tasks to a smaller model. Together these often cut a bill by more than half — see our token-optimization playbook.