.png)
Estd 4.22.2023
Big players and industry norms play a significant role in setting price points, often acting as anchors that influence both your pricing strategy and customers' expectations.
Here are some key takeaways from our saas pricing book, Price to Scale:
• When you sell a product that integrates with or competes against industry giants like Salesforce, your pricing naturally comes under comparison. For instance, if Salesforce charges a specific per-user rate, your product’s price is likely to be evaluated in that context. This “anchor pricing” means prospects use the big player's pricing as a benchmark when assessing your offering.
• Customers indeed compare your prices against these benchmarks. If your product offers a subset of functionalities or doesn’t have a marked differentiation, they may push back, expecting a much lower price point corresponding to what they see with larger incumbents.
• The book also emphasizes the importance of conveying a clear value proposition. To deflect pushback, you should ensure that any premium pricing is well-supported by demonstrable advantages. Conversely, if you’re offering limited capabilities relative to a big player, it’s often necessary to justify a proportionally lower price, avoiding what can turn into a “race to the bottom.”
In summary, while industry norms and big players set the tone for pricing benchmarks, the ultimate goal is to clearly communicate your product’s unique value and innovation. This balance helps manage customer expectations and counters potential pricing objections effectively.