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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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In today's competitive manufacturing and industrial software landscape, your pricing and packaging strategy can make the difference between sustainable growth and stagnation. While product features matter, how you structure, present, and price your SaaS offering often determines market penetration and revenue potential. Let's explore how manufacturing and industrial SaaS leaders can approach this critical strategic initiative.
Why Pricing and Packaging Strategy Matters in Industrial SaaS
Manufacturing and industrial SaaS solutions face unique challenges. Your customers often operate on razor-thin margins, have complex approval processes, and may be slower to adopt new technologies compared to other sectors. A well-conceived pricing strategy acknowledges these realities while maximizing your value capture.
According to OpenView Partners' 2022 SaaS Pricing Survey, companies that conduct regular pricing reviews (at least quarterly) grow 30% faster than those that review pricing only annually. Yet many industrial SaaS providers approach pricing as a one-time decision rather than an ongoing strategic process.
Phase 1: Assemble the Right Team and Set Clear Objectives
The Cross-Functional Team
Successful pricing projects require input from multiple perspectives:
- Product Management: Understands feature value and usage patterns
- Sales: Provides frontline customer objection insights
- Customer Success: Represents existing customer concerns
- Finance: Models revenue impacts and cost structures
- Marketing: Translates value into compelling messaging
For manufacturing SaaS specifically, consider including industry specialists who understand the unique workflows and value drivers in factories, warehouses, or industrial environments.
Setting Clear Objectives
Before diving into analysis, align on your strategic goals:
- Increasing revenue per customer
- Improving conversion rates
- Expanding market share in specific segments
- Reducing sales cycles
- Enabling simpler expansion paths
Morningstar's industrial software division achieved a 22% revenue increase by prioritizing pricing simplicity for complex asset management solutions, according to Harvard Business Review. Their primary objective was reducing friction in the sales process – your goals may differ.
Phase 2: Deep Customer Value Research
Value Discovery Interviews
Conduct 15-20 structured interviews with diverse customers, prospects, and lost deals. For manufacturing SaaS, focus questions on:
- What specific workflows does your solution enhance?
- Which measurable operational improvements do users experience?
- How does implementation compare to other industrial software?
- What approval processes do customers navigate internally?
A leading manufacturing execution system (MES) provider discovered through this process that customers valued production visibility features at 3x the value of their quality management capabilities – completely inverting their previous value assumptions.
Value Quantification
Translate qualitative insights into economic value:
- Identify tangible outcomes (e.g., reduced downtime, inventory reductions, labor savings)
- Calculate financial impact based on customer metrics
- Develop value calculators to demonstrate ROI during sales conversations
Phase 3: Competitive Landscape Analysis
Manufacturing SaaS exists in a complex ecosystem. Map competitors across dimensions:
- Direct competitors: Similar solutions targeting the same buyers
- Indirect alternatives: Different approaches solving the same problems
- Status quo: Often the strongest competitor in industrial settings
Document their packaging approaches, pricing levels, and go-to-market strategies. Industrial software analyst firm ARC Advisory Group recommends tracking not just published pricing, but total cost of ownership including implementation, training, and maintenance costs.
Phase 4: Packaging Structure Design
Value-Based Segmentation
Group features based on customer value perception, not development cost:
- Core value: Essential capabilities all customers need
- Vertical-specific value: Features relevant to specific manufacturing sub-sectors
- Scale-dependent value: Features that deliver more value as usage grows
- Strategic value: Advanced capabilities for mature customers
Package Architecture
Common models in industrial SaaS include:
- Tiered feature packages: Good-better-best models
- Base + add-ons: Core platform with specialized module options
- Usage-based: Pricing scaled to consumption metrics
- Outcome-based: Pricing tied to customer results
A survey by Vendavo found that 74% of industrial software providers now employ some form of hybrid pricing model combining multiple approaches.
Phase 5: Pricing Model Development
Pricing Structure Selection
Consider these models for your manufacturing SaaS:
- Per-user pricing: Simple but can discourage adoption in large organizations
- Site/location pricing: Popular for plant-floor solutions
- Production volume pricing: Aligned with customer value creation
- Asset-based pricing: Common for maintenance or monitoring solutions
Price Point Calibration
Set specific price points based on:
- Perceived value (from research)
- Competitive positioning
- Cost structure
- Target margins
- Market penetration goals
Phase 6: Testing and Validation
Before full launch, validate your approach through:
- Sales role-play: Test sales team comfort with new structures
- Economic buyer feedback: Present to financial decision-makers
- A/B testing: If possible, test different approaches with market segments
- Pilot implementations: Start with friendly customers
Rockwell Automation's software division reported that controlled testing with a 5% slice of their market revealed critical packaging flaws that, once addressed, improved close rates by 35%.
Phase 7: Implementation Planning
Sales Enablement
Equip your team with:
- Value-selling frameworks specific to each manufacturing vertical
- ROI calculators calibrated to industry benchmarks
- Competitive battlecards addressing pricing objections
- Migration paths for existing customers
Operational Readiness
Ensure your systems can support the new model:
- Billing system configuration
- Usage tracking mechanisms
- Contract templates
- Revenue recognition processes
Phase 8: Launch and Continuous Optimization
The launch is just the beginning. Establish a regular cadence for:
- Pricing performance reviews (quarterly recommended)
- Customer feedback collection
- Competitive movement monitoring
- Incremental adjustments
According to Deloitte's Industrial Software Trends report, leading providers adjust specific pricing elements 2-3 times annually while conducting comprehensive strategy reviews every 18-24 months.
Conclusion: Strategic Pricing as Competitive Advantage
For manufacturing and industrial SaaS companies, pricing strategy is not merely an administrative task—it's a crucial lever for growth. By approaching pricing and packaging as an ongoing strategic process rather than a one-time decision, you create opportunities to capture more value while better serving your customers' evolving needs.
The most successful industrial SaaS providers maintain a continuous feedback loop between customer discovery, value quantification, and pricing optimization. Start your pricing strategy project with clear objectives, dedicate appropriate resources, and plan for ongoing refinement as market conditions change.