What would need to be true for customers to say ‘Thank you!’ when you 10x your price today?
That was the fun challenge we explored last week in our CEO Mastermind.
Here’s the thing:
The majority of the SaaS vendors I work with have set their prices based on ingredients that have nothing to do with customer value:
- Cost price with a margin,
- their main competitors’ price with a bit of discount (and sometimes an uplift)
- Their historic license price multiplied by a 1.87 factor divided by 36 to make it a SaaS price
Funny thing is – how your price is perceived by your customers is a story in their heads. So what if we’d make value our starting point? What value would make them prepared to even well pay 10x of what they pay today – for the same product?
Challenge 1: If we hear ’10x’ we instantly go into defense mode: “This can’t be!”, “We’d never sell a product again!”, “We’d make ourselves completely ridiculous!” – and more of those assumptions.
Again – purely internal thinking – without any connection to the customer
Challenge 2: When I ask this question I always instantly hear “more this, more that” – and in particular things that have a relation to perceived product gaps and flaws.
Assuming you have customers that happily use your SaaS product, more is almost never the answer. Value is the answer. Hence I’d like to challenge you to exclude changing anything about your product for this exercise
So what if you’d consider some of these angles?
- What could you change to the guarantees you give? Which ones would give the customer peace of mind? That’s what they’re buying
- What could you change to introduce scarcity or exclusivity?
- What could you change to create a sense of belonging that your customers desire and value?
- What human touch moments could you bundle in to accelerate their time to the outcomes they desire most?
- What could you do to the way you position your SaaS business?
The question to reflect upon today:
What would have to be true for your customers to say ‘Thank you’ when you 10x your price today?
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