“Pricing is not something that changes often”
Common misconception among SaaS founders and builders is that pricing is a one-off gig. You research a bit of the competition, you create a spreadsheet with a few options, then the spreadsheet is prettified into slides that you can share, and at last - you launch it. All done.
Truth is that like your product, pricing development never stops. Wether you like it or not, the market will force you to update your pricing - time after time.
Truth is that like your product, pricing development never stops. Wether you like it or not, the market will force you to update your pricing - time after time.
Why does pricing have to change?
- Competition - free markets invite savvy competitors to take a bite off your pie simply by offering a more attractive offering. If you want to stay relevant, you need to tweak your offering.
- Consumer buying experience is a fashion - nobody likes to admit it, but buying experience has a fashion angle to it. From time to time, people simply like to consume products in new ways. Consumers generally like more buying options, and the pendulum keeps swinging from one model to the other. Examples? Car companies now offer add-ons on subscriptions, Chip companies offer subscriptions, Software companies are now going pay-as-you-go, and so forth.
- Business goals - as the company grows, the business is optimizing for different north stars. Gross margins, NDR, adoption, or else. Every time the business prioritizes a different goal, pricing needs to be aligned with it.
- Macroeconomy - inflation and currency buying power can affect consumers’ willingness to buy
- Value perception - changes in the perceived value of your business can trigger price changes
- Sales & Marketing operations - the way you choose to market your product is intertwined with your pricing. Higher or lower ASPs dictate different GTM strategies. Whether you want to transition from sales-led to self-service or the other way around, your pricing must be updated as part of that motion.
- New markets or new products - when you introduce a new product line or enter a new market (region or segment), your pricing model has to accompany that as well
- Your existing pricing doesn’t make any sense - sometimes, your pricing strategy simply does not make sense for your prospects, and you have to change it. fast.
So if that’s the case, why do we hear so many builders insist that pricing does not change that often, if at all?
Because making a price change in SaaS still sucks. Even talking about price changes triggers immediate anxiety among every single stakeholder.
Because making a price change in SaaS still sucks. Even talking about price changes triggers immediate anxiety among every single stakeholder:
- Sales are concerned about win rates and commission plans
- Product is concerned about adoption and engagement
- Marketing is concerned about brand reputation and CAC
- CS is concerned about churn and NPS
- R&D is concerned about their backlog and their ability to build it
- Finance is concerned about revenue recognition and making sense of it
- CEO is concerned about all of it together
Reality is that pricing is not a one-off gig; Most successful SaaS companies changed their pricing dozens of times.
How do we know? Because we went ahead and did the research for you!
Today, the Stigg team is announcing pricing.quest
Built by our very own amazing builder/analyst/woman-genius Lior Glazer, the pricing.quest is a data application giving you the ability to quickly see pricing changes made by selected most successful SaaS companies, throughout their entire lifetime. Here are just a few things you can do with a click:
✅ Sort and stack rank companies by the number of changes they made
✅ See the actual pricing pages over the years 🤯
✅ See the speed of changes, and stack rank companies by how nimble they were with their pricing over the years
✅ See the correlation between funding announcements and pricing changes
Give it a try, and see for yourself - long-term, being nimble on pricing plans is what separates winners from losers. Supercharge your business on your next pricing quest.
