Episode 91May 18, 2022

A Deep Dive into B2B SaaS Pricing

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Show notes

When should a B2B SaaS company change its pricing and how often should it happen?

How do free trials and freemium play within the pricing equation?

In this episode of Marketing Spark, Dan Balcauski and I explore the pricing landscape.

We look at who should be responsible for pricing, know when prices have to be increased and know when your pricing is working.

Pricing may not get the attention it deserves so Dan has great insight into its role and how to think about it.

Charge something from the start. A free product attracts users who never become customers and never feel the pain of a price, so you get no validated market feedback.
Treat pricing as a process built on four parts: customer segments, the value you create, your competition, and strategy. Cost-based and competition-based pricing are starting points, with value-based pricing as the goal.
Product marketing should own pricing, with a pricing council of sales, finance, customer success, and product giving input. Founders own it early, since no one else is there.
Signs you are underpriced include no prospects complaining about price, wide price bands among similar customers, and 90% of buyers choosing your top tier. Revisit pricing at least once a year.
Choose a 14 to 30 day free trial over freemium. A trial forces a decision point, while best-in-class freemium converts only 1 to 3% of users and wastes growth effort.

You'll leave the call with an honest read on what to fix first, whether or not we work together.

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