How to price your SaaS product

Determine your Value Metric, Determine your customer profiles and segments, User research + experimentation … et plein de très bons conseils

Pricing is one of those topics that sits at the nexus of uncomfortable and long-term, which means companies often don’t think about it for far too long. Even when they eventually figure it out, they don’t touch it again for years.

The most successful companies optimize monetization in some manner every quarter. You may be thinking, “they change their price every 3 months!?” No, and that's the first lesson of monetization: pricing goes so much further than the actual price. Let me explain.

If we go to a thirty thousand foot view, you have to think about what you're actually doing with pricing. No matter the business you're in — non-profit, retail, SaaS, DTC, B2B, whatever — you've created some sort of value. You attach a unit of measurement to the value you created: your price. Put simply, your price is the exchange rate on the value you're creating in the world.

But price doesn’t live in a vacuum. Everything in your business — from sales and marketing to product and finance — is used to drive someone to buy the product at the price you're offering. Dozens of aspects of your business influence your price, and how effectively it converts customers:

  • The segment and vertical you are targeting: You can go upmarket to customers who have higher willingness to pay, shift to a vertical that sees more value in your offering, or even change the ideal customer profile entirely.
  • Your product, positioning, and packaging: You can come out with new features, move features to different tiers, pull features out and make them add-ons, change up your value propositions, etc.
  • Your price: You can move your price up or down, which will impact conversion obviously, but will also impact the perception of your brand.

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