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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 Price to Scale, our recommendation is to be very cautious when considering temporary discounts as a way to ease the transition for customers affected by price increases.
Key Points from the Book:
• Temporary discounts or concessions can be part of your toolkit—but they shouldn’t be a unilateral solution. The book emphasizes that deep discounting and lower price points can accelerate the sales cycle but may also have a long-term negative impact on brand value and profitability.
• The interim transition period, when customers become familiar with new pricing and added value (such as advanced features), already adds complexity and costs. Using discounts strategically—often with strings attached, such as commitments to longer-term contracts or supplemental add-ons—can be more effective than broad, temporary price cuts.
• The approach should be segmented. Different customer cohorts (for example, those who have historically received deep discounts versus those paying full price) require tailored strategies. Offering alternatives like an upgrade for the same money instead of a flat discount can reinforce the overall value proposition while easing the transition.
In practice, our pricing strategy book, Price to Scale, suggests an iterative, analytical approach. It’s important to measure customer feedback, market response, and churn metrics after giving any temporary discounts and be prepared to adjust your offer accordingly. This methodology minimizes the risk of over-discounting and guides you toward solutions that preserve long-term value.
Summary: Temporary discounts may have a place in transitional pricing but should be used judiciously, with clearly defined conditions and as part of a broader, strategic approach that segments the customer base and reinforces value rather than merely reducing price.