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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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Below is a summary of the key data signals and sources our book, Price to Scale, suggests you collect to proactively inform a future pricing change:
- Direct Customer Feedback
- Regularly engage with both existing customers and prospects through interviews or surveys.
- Identify what customers value most and whether they perceive current pricing as aligned with the benefits they receive.
- Historical Data Analysis
- Look beyond basic signups and upgrades by examining trends in conversion rates across different pricing tiers.
- Analyze upgrade patterns and usage behaviors that signal customer acceptance of more value.
- Note instances where expansion dollars (revenue from upsells or increased usage) consistently rise, as this can indicate the market’s readiness to pay more.
- Competitive Data
- Monitor competitor pricing changes and market trends to benchmark your offering.
- Ensure that any new pricing variables (like changes in unit pricing or the introduction of volume discounts) are supported by comparable market examples.
- Sales Motion Insights
- Evaluate whether your current ad-hoc or legacy pricing assumptions still hold true, particularly if you’re introducing new segments or altering key pricing elements.
- Identify the current ‘price points’ that work well and where there might be untapped potential for value-based increases.
In practice, Price to Scale recommends a three-pronged approach when considering pricing adjustments:
- Talk to customers to capture qualitative signals.
- Dive into historical sales and usage data to understand quantitative shifts.
- Benchmark against competitors to ensure your pricing remains competitive.
In sum, by integrating these diverse data sources, you’ll be better positioned to identify clear signals—whether that’s increased expansion revenue, shifts in customer behavior, or emerging competitive pressures—that indicate it’s time to revisit your pricing strategy.