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Estd 4.22.2023
Below is a concise answer based on our saas pricing book, Price to Scale:
• In our book we emphasize that managing currency fluctuations is less about following one hard-and-fast rule (like “lock for a quarter” vs. “update in real time”) and more about aligning your pricing strategy with your cost structure and customer expectations.
• Many SaaS companies choose to update localized prices on a set schedule—often quarterly. This approach allows you to mitigate risk while keeping things predictable for your customers. It avoids the potential disruption of constant real-time changes and ensures that pricing remains competitive relative to local markets.
• At the same time, if you’re operating in market segments with very high currency volatility or if you have systems capable of automated pricing adjustments, real-time updates might make sense. These dynamic adjustments can help capture the true market costs as they evolve.
• The key takeaway from Price to Scale is that the approach must be closely tied to how you manage the risk across your pricing model. Consider factors like customer communication, operational simplicity, and how frequently your exchange rate variations materially affect your cost structure. Transparent conversations with your customers about how and why you adjust prices can also help maintain trust, irrespective of your chosen update frequency.
In summary, our book encourages you to weigh the benefits of quarterly locked rates versus more dynamic adjustments based on your specific market conditions and internal capabilities. There isn’t a one-size-fits-all answer—the right approach is the one that best balances risk management with a seamless customer experience.