If a competitor charges separately for certain add-ons or services (like premium support or training) and we include those for free (or vice versa), how should we account for that in our pricing to ensure customers make a fair comparison?

When faced with a situation where a competitor charges separately for certain add-ons or services (like premium support or training) while you include them for free (or vice versa), our saas pricing book Price to Scale advises that you make the value proposition transparent by isolating the value of each component and then communicating the “apples to apples” pricing comparison to your prospects.

Below are some key points from our book to guide you:

• Use an Add-On Capability Pricing Approach:
Our book (see the discussion around Figure 17 in Price to Scale) emphasizes that while bundling services or features may offer simplicity, you should still think of add-on services in terms of their underlying value. Even if they’re included in one package and charged separately in another, it’s important to assign an intrinsic value to them. This way, you can show customers the net benefits they receive from your pricing.

• Communicate the Bundle’s Value Clearly:
When your product includes add-ons for free, consider quantifying the value of these add-ons. For instance, if competitive pricing shows a separate fee for premium support, indicate that this could represent an additional cost of X dollars per month—thus reinforcing the comparative advantage of your bundle.

• Ensure Transparency in Comparisons:
It’s important not to force a direct price–per feature comparison without context. Explain that while one vendor might list base pricing separate from extras, your bundled approach provides the full suite of capabilities at a single price point. This transparency helps prospects fairly assess the overall value rather than just the list price.

• Consider Modular vs. Packaged Approaches:
Alternatively, as discussed in our book’s sections on modular pricing, you might consider a modular pricing strategy where each add-on is priced individually. Then you can offer both a bundled option (with everything included) and a modular option. This dual strategy makes it easier for customers to compare options and can capture a wider range of market segments.

In summary, to ensure that customers make a fair comparison, clearly identify the individual values of separate add-ons, present an “apples to apples” cost comparison, and be transparent about how your bundle delivers additional value over a competitor’s segmented pricing. This method not only simplifies the buying process but also reinforces trust through clarity and fairness.