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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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Based on our saas pricing book, Price to Scale, it can be a good strategy to differentiate pricing tiers for developed versus emerging markets—provided you approach it thoughtfully and with deep customer insights.
Here are some key points from the book to consider:
• Segmentation is Crucial
As our book explains, effective pricing is all about understanding and serving distinct customer segments. Whether you’re using a “good–better–best” model or a modular approach, the idea is to tailor your offers to the specific needs, willingness to pay, and economic realities of different market segments. For example, a market with higher purchasing power (typically developed markets) might support a tier with additional features and premium support, while emerging markets might respond better to a streamlined, more affordable option that still meets their core needs.
• Matching Value with Market Realities
Our book emphasizes designing offers that resonate with each segment’s value drivers and economic context. In this case, it’s important to balance the features and pricing in a way that reflects the spending habits and expectations in each market. Simply discounting for emerging markets without understanding what drives value for your customers there can lead to missed opportunities or diluted brand perception.
• Thoughtful Execution is Key
Differentiated pricing across markets should not just be about a price cut – it’s about creating distinct offers. As mentioned in Price to Scale, two common tactics are:
- Using layered packaging (good–better–best) to segment your offerings and align them with different price sensitivities.
- Taking a modular approach that allows you to mix and match features to create a tailored value proposition for specific segments.
• Practical Takeaway
Before implementing different pricing tiers, consider testing your segmented offers with real customers. Use data and feedback to refine how you package and price your services. This helps ensure that each pricing tier meets the unique needs of its target market while avoiding potential pitfalls like excessive discounting or customer confusion.
In summary, while our book Price to Scale supports the concept of differentiated pricing based on customer segmentation, the key is to deeply understand the economic and value drivers in both developed and emerging markets—and design your tiers accordingly. This strategic, customer-centric approach will help you capture revenue across diverse markets while maintaining a coherent pricing strategy.