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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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Conjoint analysis is a statistical research technique we use for SaaS pricing optimization to understand how customers value different product features, pricing points, and package configurations. Here's our approach to using conjoint analysis effectively for SaaS pricing:
The Core Methodology
Conjoint analysis helps determine which combination of product attributes (features, pricing tiers, metrics, etc.) delivers the highest perceived value to customers. For SaaS products specifically, we use it for:
- Comprehensive Package Identification: Determining the optimal feature mix for different pricing tiers
- Feature Prioritization: Understanding which features drive the most value for different customer segments
- Price Sensitivity Analysis: Measuring willingness to pay for specific features or bundles
Our Unique Approach to Conjoint Analysis
While traditional conjoint analysis can be expensive ($150k+) and challenging to apply in Enterprise B2B settings, our methodology incorporates:
- Hybrid Research Methods: Combining quantitative conjoint analysis with qualitative validation
- In-Person Qualitative Studies: Our unique approach involves interviewing 15-20 clients and prospects using structured presentations containing both quantitative and qualitative questions
- Agile Implementation: Tailoring the research to align with agile product development cycles rather than using rigid, waterfall research methods
Practical Application Example
For a $10 Million ARR IT Infrastructure Management Software company facing challenges with their lump sum subscription model, we implemented a structured approach that:
- Aligned their pricing strategy with their go-to-market strategy
- Rationalized their packaging from four packages to two with remapped feature sets
- Created a combination pricing metric based on users and company revenue
The result was a consistent, effective pricing model that reduced sales friction and enabled monetization of strategic features.
When to Use Conjoint Analysis for SaaS
Conjoint analysis is particularly valuable when:
- You need to determine optimal feature bundling across pricing tiers
- You're introducing new products or features and need to understand their value
- You're experiencing high levels of discounting or inconsistent pricing
- You're transitioning from a single-price model to a tiered approach
Our approach balances statistical rigor with practical, operational experience in SaaS businesses, ensuring the insights from conjoint analysis can be effectively implemented in real-world scenarios.