How do we decide if we should adjust pricing for international markets where willingness to pay might differ (either higher or lower) than in our home market?

Based on our saas pricing book, Price to Scale, you should consider adjusting pricing for international markets when empirical data and market research indicate a significant difference in local willingness-to-pay compared to your home market. Here’s how to approach the decision:

• Collect and analyze local market feedback:
– If you already have sales data or pilot feedback from international customers, list these by region and compare the prices at which they are willing to buy your product versus domestic customers. Our book (see the “When You Have Market Feedback” section) emphasizes using real-world data to inform pricing decisions.

• Segment and assess market fit:
– Just as we use firmographic and self-assessment data (refer to Figure 25 in Price to Scale) to validate product–market fit, do the same for international markets. Identify if the differences in willingness-to-pay reflect underlying differences in customer needs, purchasing power, or competitive dynamics.

• Choose the right pricing framework:
– Whether you use a good–better–best packaging strategy or a modular pricing approach (as discussed in Chapter 3 of our book) will depend on how distinct customer segments are and how much variation exists in willingness-to-pay. Tailoring your pricing model can help capture additional revenue in markets with higher willingness to pay, or remain competitive where localized price sensitivity requires lower price points.

• Consider strategic implications:
– Adjusting pricing internationally isn’t only about the number on the price tag—it also influences your overall positioning and customer perception. Make sure that any localized adjustments align with your long-term sales strategy and brand consistency.

In summary, the decision to adjust pricing for international markets should be driven by rigorous market research and empirical evidence. Use segmentation and adjust your packaging strategy based on the local willingness-to-pay, as outlined in Price to Scale. This structured approach helps ensure you capture value effectively while maintaining a strong overall pricing strategy.

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