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Estd 4.22.2023
Below is an overview of how our book, Price to Scale, advises handling customer concerns around regional pricing differences and perceptions of fairness:
Direct Acknowledgment of the Issue
Yes, it’s not uncommon for customers to become upset if they discover that they’re paying more than others in different regions. The reaction often stems from a perception that pricing is arbitrary rather than reflecting value differences.Segmenting and Tailoring Strategies
Our book emphasizes the importance of segmenting your customer base. Not all customers are equivalent—some use your product heavily, some negotiated unique terms, and some might have received introductory discounts. Similarly, regional differences in pricing typically reflect local market conditions, purchasing power, and competitive dynamics. By segmenting your customers (or regions), you can offer tailored value propositions rather than a one-size-fits-all price. This helps maintain fairness because each price point is built to match local context and value received.Proactive Communication and Alternative Solutions
To manage perceptions of fairness:
- Be transparent about the rationale behind pricing differences whenever possible. Explain that variations can be tied to differences in local service costs, purchasing power, or market-specific features.
- Offer alternatives that adjust for the disparities. For instance, if prices have come down in one region, proactively provide a better option for those customers as well—whether through an upgrade, a discount tied to additional commitments, or even restructuring the product line-up so that comparisons are less direct.
- Create distinct product tiers or packages so that the comparisons are less straightforward, ensuring that each segment feels like they’re getting a value-aligned offer rather than a raw price discount.
- Practical Application
In practice, this might involve developing a new line-up of offerings that differ enough from the original packages to avoid direct price comparisons. This way, the differences are framed as strategic variations aimed at meeting diverse customer needs rather than arbitrary regional discrepancies.
In summary, while regional pricing differences can provoke concerns about fairness, our saas pricing book Price to Scale advises that a combination of careful segmentation, proactive communication, and tailored alternative offerings can help manage—and even leverage—these differences to better align with the needs of various customer cohorts.