Avoid angering users by introducing a new pricing tier

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sumaiyaseobd9
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Joined: Thu Feb 02, 2023 3:01 am

Avoid angering users by introducing a new pricing tier

Post by sumaiyaseobd9 »

Your competitors’ prices help establish expectations. You don’t want to price your SaaS product far outside the established range—unless you’re sure that your product justifies the premium. The PSM approach to SaaS pricing asks four key questions to determine viable price points: At what price would you consider the product to be so expensive that you would not consider buying it? (Too expensive) At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good? (Too cheap) At what price would you consider the product starting to get expensive, so that it is not out of the question, but you would have to give some thought to buying it.

Expensive/High Side,At what price would you consider the product to be a bargain—a great buy for the money? (Cheap/Good Value) The CMO of Paubox, Rick Kuwahara, recommended the PSM Cyprus WhatsApp Number List approach for finding ideal price ranges: After you survey enough people (through the PSM approach), you usually get a range of prices where you can see how elastic pricing is between the answers for each question (in the PSM). Like too cheap may be between $10 and $20, and too expensive between $50 and $75. Additionally, you can then do some market research and see how that would bear out in the marketplace.

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While I don’t like competitor-based pricing too much, you also don’t want to be way out of the range that the market has set. If your research suggests that a price increase is justified, you may be able to move on to execution. But, as Alexa Hubley, Head of Marketing at CXL cautions, there are other factors to keep in mind: “Research” should include more than just determining acceptable price ranges. It’s also important to do projections/predictions of churn and retention related to new pricing as well as business impact analyses etc.
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