All right, today I wanna talk about a topic that's just not discussed enough, and that's pricing.
We've worked with many different B2B SaaS companies in different industries, and their most common pricing strategy is to be a little bit lower than the leading company.
What are the odds that across all these companies that we've worked with that the best price for them is a little bit lower than the leading company?Zero.It just reflects a lack of thought put into pricing.That's just not good enough.
On top of the lack of thought in terms of pricing strategy is that when prospects enter the sales process, even that price goes out the window.Your price gets significantly discounted in order to win the deal.
This is not a pricing strategy at all, and it's not a winning strategy for your company.There's five ways this hurts you.One is it doesn't address prospect needs.
While your prospects generally may be trying to accomplish the same thing, their individual needs are different.They may value certain things more and other things less.Your pricing should reflect that.
You should come up with a strategy that enables you to deliver maximum value.Two, it eliminates your differentiation. Is your product exactly the same as your competitors, but a little bit worse?
No, you better be differentiated or you're not going to win at all.The third thing it does is it discounts the value of your product.Are you just developing a product that's a little bit worse than your leading competitors?No, your product has value.
You're trying to create a great product.You shouldn't just discount it based on your position. The fourth thing it does is that if your point of differentiation is just that you're a little bit cheaper, you're going to lose every single time.
Saving a little bit of money is not a point of differentiation.They're going to go with the leading competitor.
And then the fifth thing it does, it doesn't address two of the biggest costs that prospects have, especially for challenger brands, which are switching costs and risk.
Just by adopting the leading brand's price but lower, you're not addressing either of those factors.This also highlights an important reason why marketing should be brought into the pricing conversation.
Marketing can help you understand prospect needs. It can help you understand what they value and don't value.
It can also help you highlight your points of differentiation, really be able to articulate that and find a way to bring that into your pricing model.And then finally, you want to make sure you maintain your brand.
B2B SaaS companies do not think enough about their brand and they're willing to discount their price without thought about the brand.And this isn't good.Your brand is very valuable and you want to make sure you maintain it.
throughout all of your customer interactions.Not just your website, not just your advertising, not just your content, but all the way through pricing as well.So bring marketing into the conversation.
Force marketing to go into the conversation if they're not willing, because you need to have these insights and you need to think about your brand throughout all these conversations.
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