Before discussing Pricing Models make sure: 1. You've clearly mapped out needs, requirements, restrictions and scope of your prospect's project(s). 2. You've demonstrated and proven (potential) value! 3. You've carefully defined the DMU and timelines to reach a decision. Tip: Try to avoid using complicated Pricing Models they tend to confuse and may potentially cause unnecessary and avoidable doubt.

Negotiating a SaaS pricing model that satisfies both parties involves understanding the specific needs of the client while ensuring the sustainability of the service provider. Open communication about usage requirements, scalability, and desired features helps tailor a pricing plan that aligns with the client's budget and objectives. Offering flexibility, such as tiered plans or customizable features, allows clients to pay for what they need. Additionally, considering long-term partnerships and incorporating growth-oriented pricing structures can create a win-win situation, fostering a mutually beneficial arrangement that accommodates evolving needs and ensures fair value for both the client and the SaaS provider.

Negotiating SaaS pricing? Here's how: Know your needs. Highlight value. Seek flexibility. Leverage competition. Emphasize long-term. Trial periods and pilots. Explore customization. Find the balance for mutual success! #SaaS #Negotiation"

I have been researching two specific SaaS platform use cases pretty intensively over the past month. I've lost track of how many sites I've been to and demos I have sat through. Give serious customers with a vision some room to experiment and prove their concept - let them reward you with a longer agreement in exchange for price flexibility. And, when I arrive at your site and find myself confronted with your desire to get me on a demo while I am trying to learn - you're not building goodwill with me. SaaS increasingly feels a lot like buying software licenses again... That's squandering the opportunity and promise of SaaS.

Customer need is good starting point but keep in mind that you can't satisfy all people. Needs vary across customers dramatically and early on you just can't design a SaaS pricing model that's ideal for everyone. I think this why in my experience, pricing models change so much over the years as SaaS companies mature. Don't get me wrong, eventually, the model needs an option for everyone. That's why you see the full spectrum from self-serve to enterprise plans at more mature companies. But early on -- pricing just needs to reflect the value that you know your early adopters will get from your solution.

There is an entire field of pricing models and analysis. I think keeping it simple is always better. You see more consumption models now, especially developer-driven SaaS/PaaS/IaaS products. Seats-based pricing is still a mainstay. There's a lot of factors here. I think for early stage SaaS, you just need a pricing model that makes sense, can be easily understood (not too many levers) by your customer and is perceived as fair. Then you have to see what price the market will tolerate. I personally think you have to pick something and then not get too hung up on optimizing for price too soon. Find the right ballpark relative to the value you provide.

💰 Evaluate different pricing strategies based on factors such as market dynamics, competition, and customer preferences. Consider options like value-based pricing, where the price is determined by the perceived value of the solution to the customer, or tiered pricing, where customers can choose from different pricing tiers based on their needs and budget. For example, if you're selling a subscription-based software to a diverse customer base, you might opt for tiered pricing with different feature sets to cater to varying customer needs.

In my experience there is always an amicable solution. From fixed rate, cost per action, cost per project and so on you can always find a model that makes sense to an interested prospect. The key factor is to quickly and accurately identify your prospect hesitations, once you know exactly what’s stopping them from “signing on the dotted line” you can offer a billing solution thats tailored to those needs. Personally I don’t find billing to ever be a glamorous topic so find something that works and then keep the conversation moving!

Value is important but it's always relative. This is why differentiation is so important and why everybody in saas is after category creation. If you are truly way different than anything else out there, you can charge a premium for the unique type of value you provide.

The value is what the customer perceives. Communicating the value has little sense. It will be perceived as you try to get more money. Value communication is about asking the right questions, influencing the value perception in order for the customer to think about the value. Customers don't buy value, they only perceive value.

📣 Clearly articulate the unique value proposition of your product or service and how it addresses the customer's specific pain points and challenges. Use compelling language and real-world examples to demonstrate the benefits they'll receive from choosing your solution. For instance, if you're selling a cybersecurity solution to a financial institution, you might highlight how your product can protect sensitive financial data, prevent cyber attacks, and ensure regulatory compliance.

Está es la labor más delicada y a la que debes dedicar mayor tiempo. Si de verdad tu solución SaaS logra cubrir las necesidades del cliente, no desistas nunca en demostrarle todos los beneficios, todos los puntos de dolor que va a resolver. Utiliza demos, testimoniales, pruebas gratuitas por tiempo limitado, todo lo que esté a tu disposición para que el cliente vea y entienda tu propuesta de valor.

there will always be concerns about pricing from your prospects. I think this is where your first few customers can come in handy to inform -- why did they buy regardless of having the same doubts that show up as objections from your other prospects? How did early customers reassure themselves (or how did you reassure them). And lean into those things. Always anchor back to value and let objections fall away. The things you really need to address will show up as blockers and you can take care of them.

🤝 Anticipate potential objections and questions the customer may have and prepare thoughtful responses in advance. Listen actively to their concerns, validate their perspective, and address each objection with empathy and understanding. Provide relevant information, testimonials, or case studies to reassure them and build trust. For instance, if a customer raises concerns about the implementation process of your software, you might offer to provide dedicated support and training to address their specific needs.

beyond discounting-- I think it's important to think about whether the pricing model you chose creates the right incentives. Customers will of course always try to minimize costs and we don't want any anti-patterns here where the model (for example charging per additional seat) discourages the customer from behaviors we actually want (sharing the tool with more team members).

💸 Identify opportunities to add value and incentivize the customer to move forward with the deal. Offer discounts, extended trials, or additional features as incentives to sweeten the deal and overcome any hesitations they may have. Be strategic in your concessions, ensuring they align with the customer's priorities and deliver mutual benefits. For example, if a customer expresses budget constraints, you might offer a discount on the annual subscription fee or include complimentary training sessions to enhance the value proposition.

Fundamental, que las expectativas que tiene el cliente, surgidas de tu propuesta, queden en blanco y negro de manera que no "queden en el aire" posibles suposiciones. Una vez este este acuerdo refrendado, comunicarlo a lo interno de nuestra empresa para que todos estén en la misma página.

📝 Once an agreement is reached, document the terms and conditions clearly and concisely in a formal contract or proposal. Ensure that both parties have a shared understanding of the agreement and are committed to fulfilling their respective obligations. Follow up with the customer after the negotiation to confirm their satisfaction, address any remaining concerns, and provide assistance with onboarding or implementation as needed. Establishing clear communication channels and maintaining ongoing engagement with the customer can help strengthen the relationship and drive long-term success.

In a SaaS business, it is super important to continue evaluating the value and influence the value perception during the usage. That is why customer success plays such a big role in getting the return of your initial investment in sales.