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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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Effective competitor benchmarking requires a multi-faceted approach that combines structured analysis with market intelligence. Here's how to benchmark your pricing properly:
1. Regular Market & Competitor Analysis
Establish a systematic process for analyzing competitor pricing models and making appropriate comparisons. This should be an ongoing process rather than a one-time effort to track market changes.
2. Use Multiple Research Methods
Our pricing methodology incorporates several research approaches:
Statistical/Quantitative Analysis: Employ techniques like Van Westendorp surveys to measure acceptable price points, conjoint analysis to identify optimal package configurations, and Max Diff to prioritize features
Empirical Research: Analyze your pricing power by understanding your $/metric performance across different sales teams, geographic regions, customer segments, and product lines
Qualitative Research: Conduct in-person studies with both clients and prospects to validate your pricing and packaging relative to competitors
3. Assess Your Price Bearing Capability
Understand your pricing power relative to competitors by analyzing:
- Your $/metric performance across different markets and segments
- Your ability to maintain desired price points against competitive pressures
- How your pricing structure compares to evolving industry standards
4. Benchmark Your Pricing Model Against Best Practices
Evaluate your pricing structures against evolving industry standards to identify areas for improvement compared to competitors. This includes analyzing:
- Tier/package performance
- Discounting patterns
- Usage rates
- Shelfware metrics
5. Customer Value Perception Analysis
Undertake customer willingness-to-pay (WTP) research through surveys and interviews to assess how your customers perceive your value proposition compared to alternatives in the market.
By implementing these approaches, you'll gain a comprehensive understanding of your competitive position and identify specific opportunities to optimize your pricing strategy against the market landscape.