Companies like Airbnb are able to quickly adjust prices to reflect changes in the market — imagine if your SaaS company could do the same.
It’s not generally easy to accomplish in the SaaS world since there are several steps involved with changing prices or implementing pricing tools. Developers have to do a lot of extra coding, add tasks to a sprint, update the software, and more.
All those steps can also lead to potential mistakes, or your company may not be able to change pricing information quickly. Maybe there aren’t enough engineers on the team, or if you’re the only developer, you simply don’t have time to both work on the product and continuously adjust the pricing.
But there’s a silver lining — dynamic pricing software that streamlines the process. SaaS companies that use dynamic pricing tools experience more efficient processes for their developers, as well as increased revenue and better customer relationships.
What are dynamic pricing tools?
A dynamic pricing tool allows you to make changes to your current offering — without having to perform a bunch of coding to make it happen.
The short-term rental market uses this kind of pricing strategy. Airbnb, VRBO, property managers, and other vacation rental companies change pricing to reflect customers’ willingness to pay based on competition and seasonality. They’re able to pivot and make pricing changes quickly — and speed is key to remain competitive.
Not all pricing changes mean an increase in prices. Dynamic pricing tools allow businesses to improve their overall self-service buying experience, like adding or removing plans, updating the packaging, introducing a trial or freemium experience, and more.
How SaaS companies benefit from dynamic pricing tools
In the B2B SaaS world, the concept of dynamic pricing plans is still very much based on theory, but research already supports the importance of changing your pricing plans regularly. In fact, just a 1% change in your pricing may result in a 12.7% increase in revenue. Considering that the SaaS market is constantly evolving, and competition is fierce and never dwindling, using a more adaptable data-driven pricing strategy just makes sense.
Gives customers a better overall experience
Buyers of SaaS products are nowadays expecting seamless buying experiences.
It starts with packaging what you offer into the pricing plans that reflect how your different customers are using your product. In a dynamic market, SaaS companies need to regularly update their pricing plans according to changing customer needs.
That could mean adding new features to existing plans or updating them with more users instead of remaining stagnant and not giving customers what they need out of your product.
Dynamic pricing tools allow your company to evolve quickly and change pricing as needed in response to customer needs and wants.
Reduce engineering time
The right pricing tool steps in and takes all the necessary changes off your plate, automating changes for you. Some will even integrate with CRM software and send notifications to customers when they should upgrade their plan or if their free trial is about to end.
However, SaaS companies struggle with an inflexible infrastructure — even the smallest change often means waiting to be prioritized in one of the next developer sprints, and then lots of manual handling to reflect the change across the product, pricing page, billing, and CRM.
This easily chews up valuable engineering resources that could be spent instead on improving the product and the user experience. Your company either has to settle for outdated pricing plans and miss out on potential revenue or put pressure on you and the other developers to make the changes, delaying updates to the product.
If you have to go through engineering cycles, you’ll spend scarce resources and lose time. SaaS pricing needs to be more agile, and businesses need to be more flexible in the way they iterate on their pricing.
Stigg gives your company pricing flexibility without the burden of extra coding
The concept of dynamic pricing plans in the SaaS world has been rooted in theory — up until now. With Stigg, your company has the flexibility to change its pricing plans and to do so without putting extra strain on you, engineering, and your team. If you’re interested in seeing how we can help your company implement pricing solutions like flexible pricing and dynamic paywalls, get access here.
