Do we need to monitor competitors’ pricing regularly and have a plan for adjustments if they change something (like introducing a new low-end tier), or should we focus on our own value and not react to every move?

Based on the guidance in our SaaS pricing book, Price to Scale, it’s important to strike a balance:

• Yes, you should keep an eye on competitor pricing and the broader market landscape. This regular monitoring helps you understand where your product stands within your segment and ensures you’re not caught off guard by shifts such as the introduction of a new low-end tier.

• However, the book stresses that your primary focus should be on the intrinsic value you’re delivering. Rather than reacting impulsively to every competitor move, use competitive insights as a tool to reassess and potentially fine-tune your pricing strategy within your overall value framework.

Key takeaways from Price to Scale include:

Regularly evaluate and update your pricing models to align with evolving market conditions and internal value drivers.
Develop flexibility in your strategy so you’re prepared to pivot when the market demands it, without compromising the value proposition that sets your product apart.
Use competitor insights to enhance your strategy—not to mimic competitors every time there’s a change.

In summary, while monitoring competitors is necessary, it should serve to inform a strategic, value-focused pricing approach rather than prompt knee-jerk reactions.