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Estd 4.22.2023
Based on the insights from our saas pricing book, Price to Scale, a differentiated offering for startups or early-stage companies can be beneficial—but only when executed with a strategic segmentation approach.
Key takeaways include:
• Segment Your Customer Base: Instead of having a single pricing scheme for all, our book advocates for segmenting customers based on their usage, size, or stage. By doing this, you can tailor offerings to each group’s needs rather than forcing everyone into one rule.
• Offer Alternatives, Not Just Discounts: The book emphasizes that discounts should come with conditions—such as longer commitment periods or add-ons—to prevent leaving money on the table. A discounted starter plan might work if it’s part of a new, clearly differentiated lineup rather than a unilateral concession.
• Preventing Comparison Paradox: Simply discounting the starter plan in an otherwise uniform pricing strategy can lead customers to compare it directly with higher tiers. Instead, it's more effective to create a distinct tier with thoughtful benefits designed specifically for startups without complicating your overall pricing structure.
In summary, while a discounted starter plan for early-stage companies can help in acquiring and retaining these customers, it is essential to structure it as a well-thought-out segment strategy. This approach ensures that the discount contributes to customer acquisition without undermining the perceived value or simplicity of your pricing model.