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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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Below is a concise answer based on the strategic insights from our pricing strategy book, Price to Scale.
Direct Answer
To research local pricing expectations and competitive landscapes in new markets, begin by gathering both qualitative and quantitative data. This includes analyzing local competitors’ pricing, understanding customer willingness to pay, and assessing the overall market environment. This research helps you determine whether your product is entering a blue ocean (with more pricing flexibility) or a more crowded market where pricing cues are already established.
Key Steps and Insights
• Competitive Analysis:
- Identify key competitors operating in the new market and review their product offerings, feature sets, and pricing models.
- Focus on understanding how these competitors position their products, which can provide a benchmark as discussed in our “Competitive & Category Price Points” section.
- Segment the competitive landscape by categorizing competitors into direct, indirect, and niche players.
• Local Market Research:
- Use surveys, interviews, and direct feedback from potential customers to gauge pricing expectations and sensitivity.
- Look for patterns in customer behavior such as willingness to pay different price points as shown in our framework on market feedback.
- Gather firmographic data (company size, industry, region-specific buying patterns) to tailor your pricing strategy.
• Market Categorization:
- Assess whether the market falls into a blue ocean scenario (where your product might disrupt conventional offerings) or a more mature market where consumer expectations are set, as described in our book.
- This segmentation will help guide how flexible you can be with your pricing—for instance, new markets with less direct competition may allow a wider pricing range.
• Practical Application:
- Combine the insights from local competitor analysis with direct market feedback to adjust your ideal customer profile (ICP) for the region.
- Test different price points in a controlled manner to observe local price elasticity before rolling out the full pricing model.
Summary
By synthesizing local competitive insights with direct customer feedback, you can effectively determine pricing expectations in new markets. Our pricing strategy book, Price to Scale, emphasizes the importance of understanding both the competitive landscape and local customer behavior to craft a pricing strategy that resonates with your target market.
This balanced approach allows you to set prices that are both competitive and aligned with local market expectations.