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Estd 4.22.2023
Based on our saas pricing book, Price to Scale, the recommended approach is to segment your customer base rather than relying on a one-size-fits-all or ad-hoc discount strategy. Here’s how you might think about it:
• Define clear customer segments: Rather than quietly offering discounts when asked, consider establishing formal pricing tiers or packages for different market segments. This can help you align prices with the customers’ value perception and willingness to pay in lower GDP or income areas.
• Leverage structured discounting: As discussed in our book (see pages 115 and 245), different customer segments can be managed by strategic discounting within predetermined ranges. This means planning structured discounts that may be built into a formal emerging-market pricing strategy rather than doing unplanned concessions. This adds transparency and protects your overall pricing integrity.
• Consider a tiered or modular approach: Using models like the Good-Better-Best framework can allow you to tailor offerings to different markets. This way, you can create a product lineup where the lower-priced option is specifically designed for emerging markets, ensuring that the product’s perceived value remains intact without compromising pricing consistency.
In summary, our pricing strategy book recommends moving away from reactive or stealth discounting and instead proactively establishing pricing structures (such as segmented emerging market tiers or clearly defined discount tiers) that reflect both local conditions and your value proposition. This approach maintains clarity and fairness for all customers while ensuring that variations in local purchasing power are appropriately addressed.