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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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When competitors offer similar core value, the key is not to compete solely on price but to differentiate through a unique pricing structure that aligns with different customer needs and usage patterns.
Here are a few strategies drawn from our book, Price to Scale:
• Good – Better – Best Packaging:
As discussed in our saas pricing book, one effective approach is to create 2-3 distinct packaging tiers. By bundling features that solve your customers’ most pressing problems into “good,” “better,” and “best” packages, you can target different segments based on their willingness to pay and their specific needs. This approach allows you to offer a premium option for customers seeking advanced capabilities while still capturing value from those who prefer a more basic package.
• Modular Pricing and Capability-Based Models:
Another strategy involves modular pricing, where pricing is tied directly to the usage or the specific capability that the customer values. This can help you manage both the hard costs associated with increased usage and the need to align price with the perceived value the customer receives. This method is particularly useful when portions of your service incur scalable costs (e.g., storage or compute power). It also provides the flexibility to offer value-added services on an as-needed basis.
• Segmenting the Customer Base:
Differentiation can also be achieved by tailoring your pricing to different cohorts. For example, large enterprise clients may be willing to pay more for premium, high-touch services, whereas SMBs or mid-market clients might be more sensitive to price. By creatively segmenting customers and offering alternatives—such as time-based discounts or bundled add-ons—you ensure that each group finds a pricing option that feels both fair and value-driven.
In summary, when faced with competitors offering similar value propositions, leverage strategic packaging and modular pricing to clearly differentiate your offering. This provides a tailored message for each customer segment while highlighting the unique value your product delivers beyond the core similarities.