I joined fellow software pricing expert Brian Russell in a webinar with Mainsail Partners, a growth equity firm that invests in fast-growing bootstrapped software companies.
We explored pricing strategies and value management in the SaaS sector, discussing the impact of inflation and economic changes on pricing, and the challenge of choosing the best pricing metric. Our conversation covered important areas like the advantage of proactive pricing strategies, the role of a pricing committee, and effective methods for communicating price increases to customers.
Key topics we covered in this webinar:
- Effects of inflation, interest rates, and capital availability on pricing decisions
- The necessity of involving stakeholders in pricing decisions and having a pricing committee
- Choosing the right price metric for company success and challenges in selecting a pricing metric
- Importance of communication, advance notice, and value-based arguments for price increases
- Differentiating pricing strategies for new and existing customers and considering price sensitivities
Timestamped Outline
16:03 Strategic questions for executives about pricing changes.
18:40 Pursuing optimal pricing, considering customer behavior.
32:47 Understanding customer perspective is key to changing pricing.
53:51 Pricing and packaging strategies for efficient sales.
Potent Quotables
The Importance of Pricing and Packaging Change in a Company:
“It’s important to understand that pricing and packaging change will affect everyone at the executive leadership level and throughout the company. Each department will bring their own bias, not because they’re bad people, but because that’s what we’ve given them responsibility for.”
— Dan Balcauski
The Importance of Pricing Strategy:
“There’s no one single price level that optimizes both revenue and profit. We have to make a choice.”
— Dan Balcauski
The Importance of Pricing Metrics in SaaS:
“A good rule of thumb is about a third of your deals would be lost due to pricing.”
— Dan Balcauski