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SaaS - Enterprise & SMB B2B: In SAAS, Can we have different Pricing plans for Different Products being offered to our Clients.
KW
KW
Kenneth Wolstrup, Value adding advice built on analysis. answered:

This is a classic pricing- and positioning problem, and in the SaaS-environment you can do lots of stuff with it that is harder in traditional businesses.

First off, consider the lessons from pricinglessons.com - they are a good starting point before you build your pricing structure, and they also include considerations on product quality. http://stefanmichel.typepad.com/.a/6a011570229a53970b019104666b84970c-pi

I think you should take the following into account in your work going forward.

- Different Pricing Plans for Different products makes excellent sense. Price differentiation as a great way to go, and you want your customers to choose. But don't make it overly complex (as we see f.eks. in insurance).

- It makes sense to group your offerings, but make sure, that the products are bundled in a coherent and value adding way, that fits your clients needs. Think about how your customers will use your solution. Perhaps start by offering the bundled product over the phone to a few pilot users, and try to understand their price sensitivity and will-to-pay. Once you launch it on the website, it will be harder to change.

- It could make sense to build a simple structure as you describe, where one package costs x, while 4 packages cost 4x minus a discount. But the discount has to count for something: Expected increased usage or increased loyalty? Advantage in distribution? Larger margin for you?

- In my view - especially in SaaS, pricing has to be fair and transparent, as customers have to quickly understand the structure. While it is important, that you find the optimum price, this also has to work in real life, and you have to be able to stand up for and explain your pricing structure, although product offerings get challenged less than service offerings

- Don't die from maintaining a complex IT-infrastructure to support your pricing structure - instead spend your time making your offering and positioning better, and improve fencing between the products (see pricinglessons.com for fencing definition, or search Stefan Michel Fencing HBR for an introduction).

- Make sure you capture all data, that will document the customer journey from consideration to quote to conversion. Otherwise, you cannot adjust your pricing and nuance in the future as you produce new offerings and the market changes.

If you want to discuss this further, I will be happy to set up a call as pricing, positioning and business model optimization are of great interest to me!

Best regards
Kenneth Wolstrup

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