I have had several conversations this week about SaaS pricing. It’s the most prominent conversation to have as a next step in the process of clarifying your value proposition.
I mean, if you’ve sharpened everything from who you’re ideally for (segmentation), to your positioning, to your unique story of value, then very likely you’ve created an opportunity to adjust pricing as well.
The big question is: What determines the price?
What is too high? What is too low? What is exactly right?
And that’s where things go wrong. How many B2B SaaS vendors end up with a user-based pricing model that’s a direct copy of their nearest competitor; just a bit cheaper.
If you believe you are uniquely positioned to solve your customer’s problems, and if you genuinely believe in the value you deliver, why should you a) copy the model of your competitor and b) be a bit cheaper.
The better question is: What determines the price your customers want to pay?
And here’s where it gets interesting because money is a story.
Just look at yourself. For example, when you’re shopping on Saturday, and you see that beautiful shirt in a store – it’s the story we tell ourselves that determines if we perceive it as cheap, expensive, or “just right” for us.
It’s the same in business. The money we’re about to pay for something is a story. Three key factors determine it:
👉 1) Desire
👉 2) Buying power, and
👉 3) Available options
And that’s a unique opportunity – cause this is what we can play within the way we communicate with our ideal customers
It’s in the way we communicate our value where we create desire
It’s in our segmentation where we determine buying power
It’s in our positioning where we limit their available options – even in a commodity market with many (at face value) similar options
What story do you tell?