Requests for Advice
Candidly, as there are so few software pricing consultants with my scope of real-world experience ... I get to have a lot of conversations about the issues, challenges and regrets that tech founders, executives and investors face.
Because there are so many factors, variables, conditions and scenarios to consider when making better-informed monetization and pricing strategy decisions ... it is common for these conversations to close with the following question.
What is your #1 piece of advice for how a Software and SaaS business should think about pricing?
Give your pricing a chance.
Setup Your Pricing
The best way to "give your pricing a chance" ... is to continuously test and fine-tune new ways to better setup your pricing, with improved value messaging at every touchpoint.
It is common for leaders to conclude or suspect that pricing is the cause for low (or decreasing) conversions, wins or renewals. They may even reference verbatims from prospects, customers or sales staff as proof that pricing is too high or that a discount is necessary.
It's not the price they don't like, but what they understand they are (or are not) getting for that price.
Here are the most important questions to be asking and answering often:
Q1: How well are you setting up your pricing?
Q2: If someone asked, how would you explain your pricing?
Q3: Are you making a compelling and credible value case for why your pricing makes sense?
Q4: Are you giving your value advantages the best chance to differentiate you from alternatives?
Q5: If you and your team do not believe in your pricing, why would your prospects and customers?
Value Clarity = Pricing Confidence
As you increase value clarity, you simultaneously increase pricing confidence in the minds of ….
The better you MAKE A CASE FOR YOUR VALUE, the better you make a case for your pricing.
The most common reason … prospects do not choose you -or- customers leave you … is they do not believe you are worth it.
Top Priority Recommendation
One of the best (most effective) ways to understand, demonstrate and communicate value … is to contrast LIFE WITHOUT -vs- LIFE WITH your solution.
The single most important and productive investment of your time is to get the right people in the same room and on the same page regarding how you make a meaningful and measurable difference in the lives of your customers.
Simply start with two columns on a whiteboard;
(a) Life Without - Status Quo
(b) Life With - Your Solution
Be honest and realistic with how you actually help them save money, make money, save time, increase quality, avoid risk, achieve compliance, etc.
Do This Next
Use the above LWO-LW and map it to: Bain's, "The 30 Elements of Value" (B2C), "The B2B Elements of Value" or Christensen's, "Jobs To Be Done".
Below is a quick example of how Logikcull presents a well-designed Value Visual of Life Without (Old Way) and Life With (New Way) the capabilities Logikcull enables for its customers.
Here is one more example ...