Did you know you’re leaving money on the table because visitors aren’t converting into customers since your pricing strategy isn’t optimized effectively? Maximizing revenue and optimize B2B SaaS pricing for business is never an easy task.
Because there are a lot of things to do before you can achieve that. First, you need to gain a deeper understanding of your product and what customers are looking for. Secondly, you need to launch effective sales strategies and deliver outstanding customer support. But even after doing all that, you still have one key factor that can influence your business growth: Your pricing strategy.
No matter how great your product is, if you price it too high, it won’t sell. Besides, if you price it too low, it may negatively affect your bottom line. Getting your pricing strategy right consistently as your customers’ expectations evolve is helpful to lower churn and generate recurring revenue. So, what’s the sweet spot?
In this article, you’re going to learn how to optimize B2B SaaS Pricing to Increase Sale:
1. Leverage Subscription Management Software
To effectively optimize B2B SaaS pricing, you should leverage a holistic subscription management software solution. Here is a list of the best ones by Attrock. The beauty of subscription management software is that it is designed with features and capabilities that simplify pricing optimization.
Furthermore, most subscription management systems have customer segmentation features, use price automation, and can manage prices based on customers.
What’s more, leveraging subscription management software for pricing optimization enables you to:
- Leverage machine learning to analyze price elasticity
- Analyze the results of multiple pricing techniques
- Develop and evolve your pricing strategy constantly
- Generate more revenue for Optimize B2B SaaS Pricing business
- Drive more sales by focusing on the user while setting up pricing plans for your product
2. Know How Customers Use Your Product
The way customers use your product is not the same. For instance, some customers use your product regularly while others irregularly. Others will login and use the product for hours while others might log in and use it for a few minutes.
You need to put into consideration all these customer behaviors when setting up pricing for your product otherwise, you experience a huge churn rate. But understanding your customer when optimizing pricing is not an easy task.
Here, you need to gather objective data like demographic, analytics, etc. You also need subjective data from customer surveys, interviews, and other sources. This will help you to fully understand how customers actually use your product.
In that case, you need to know the following:
- How often customers use your product
- The duration they use your product after logging in
- Whether they use your product individually or as part of a team
3. Understand How Subscription Management Works
Even though good subscription management is essential for the success and growth of SaaS businesses, it is one of the most challenging, complex, and interesting topics in SaaS businesses.
Generally, subscription management for SaaS businesses encompasses the strategy, systems, and processes created to manage customer revenues and contracts. Thus, understanding subscription management can help you to effectively optimize B2B SaaS pricing strategies.
4. Leverage Data to Quantify Buyer Personas
Buyer personas are essential factors for SaaS success. They help you understand your potential customers better, reduce unnecessary costs, enhance customer engagement as well as how the product fits in with your customers.
In most cases, you create SaaS personas using subjective data from customer surveys and interviews. To optimize B2B SaaS pricing strategy, you need to quantify your buyer personas with hard data.
In this case, you need to gather the following information:
- Understand what price each of your buyer personas is willing to pay
- Know the customer acquisition and lifetime value for each buyer persona
- Understand the top customer acquisition channels for each buyer persona
- Identify the top 3 features and 3 least used features of each persona
- How the purchase process works for each of your buyer personas
Use the information you gather to optimize your pricing and value metrics.
5. A/B Test Pricing Strategies
There is probably no better way to optimize your B2B SaaS pricing than trying. Yes, trying can help to simplify your SaaS pricing optimization process. This is why it’s advisable to A/B test your pricing strategies.
A/B testing pricing strategies simply means offering different prices per customer segment. If you test it and it works, you can optimize your pricing. If it flops, you can revert to your old pricing strategy. Using robust price optimization software can be a great idea in this case.
Att: Starting a successful B2B SaaS subscription business can be daunting especially if you’re doing it for the first time. If you’re confused about how to start yours, you can try one of the business formation services outlined by SmallBusinessHQ.
Learning how to optimize B2B SaaS pricing is a big task yet a great idea for achieving SaaS growth and overall success.
To effectively optimize B2B SaaS pricing business, understand your customers, offer product features they want at a price right for them, then A/B test different pricing strategies.
Author Bio – Reena Aggarwal
Reena is Director of Operations and Sales at Attrock, a result-driven digital marketing company. With 10+ years of sales and operations experience in the field of e-commerce and digital marketing, she is quite an industry expert. She is a people person and considers the human resources as the most valuable asset of a company. In her free time, you would find her spending quality time with her brilliant, almost teenage daughter and watching her grow in this digital, fast-paced era.