The financial success of your company or business is determined by the price you decide to charge for your goods and services. That is why you need a comprehensive b2b SaaS pricing strategy that takes into account customer insights, competitors’ pricing strategies, and market research while setting a reasonable profit margin for your company.
People usually opt for products that are priced as per their perceived value. People are ready to pay a higher price only if the product is of high value to them and has a higher number of features. This customer approach has made it vital for businesses to create effective pricing strategies. Read on to know more about pricing strategies and how it determines the success or failure of a business.
Business to Business SaaS pricing Strategies:
B2B businesses must create pricing strategies that will give them a competitive edge while taking into account the ever-changing market conditions as well as the consumer.
The right B2B pricing strategy will allow your business to create sales processes that can be repeated and generate recurring revenues. Although there are endless options to choose from, the following are some of the pricing strategies that you can consider—
- Premium pricing:
High prices are necessary to communicate a sense of exclusivity, quality, and, in many cases, luxury. SaaS companies that use premium pricing tend to target and sustain a smaller customer base of premium customers willing to pay more for the highest value products and services.
This B2B pricing strategy is best for brands with strong brand recognition that offer SaaS products to high-profile companies. These companies have also achieved clear differentiation in the value and quality of their products. The customers of such companies are often willing to pay more for exclusivity.
- Penetration pricing:
In this strategy, a product is launched at a lower price point, and gradually with time, as the product starts gaining popularity in the market, the price of the product also increases. The main aim of this pricing strategy is to create customer loyalty as well as to highlight the brand in the market. Based on the reaction of the customers to the initial prices, you can gradually increase the pricing of the products.
This B2B pricing strategy is adopted by companies who aim to compensate in the long run by upselling their products and convincing customers to sign up for a product that provides more profit.
- Value-based pricing
In this pricing strategy, the price of the product is determined on the basis of a value proposition. The set price is in accordance with what the customers are willing to pay for the product value. You can tailor price points and packages to meet their needs. You can also set a higher price point if your customers are ready to pay.
Value-based pricing allows you to adjust prices when the value of your product increases or the customers’ requirements change. A value-based pricing strategy requires a deep understanding of the market, including extensive research into customer needs, pain points, and market state.
Therefore, if you want to increase your revenue as well as your customer base, it is vital to have an efficient price structure management system in place. For that, you have to wisely choose the pricing strategy that will best suit your aims and objectives.