Request for Advice
Recently, I was asked to contribute to a blog post by Chargify. Due to space limitations, it was abridged ... so I wanted to provide my full response below.
What is the #1 piece of advice you’d share for how SaaS businesses should think about pricing in 2018?
Setup Your Pricing (aka: give your pricing a chance)
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.
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?
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.
One of the best (most effective) ways to understand, demonstrate and communicate value … is to contrast life WITH -vs- WITHOUT 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 and (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.
Use the above LW-LWO and map to: Bain's, "The 30 Elements of Value" or Christensen's, "Jobs To Be Done".
Your pricing determines both your revenue and your profits.
Get paid what you are worth.
Ultimately and literally ... you are worth ... the prices you accept.