This month Nauta Capital’s Carles Ferrer, Vendeed Capital’s Sakari Pihlava and Xolo.io Mikko Teerenhovi teamed-up on a SaaS Pricing webinar attended by nearly 200 SaaS founders. The three speakers shared their tips, insights and lessons on how SaaS startups can get their pricing right.
You can watch the webinar recording here and find the slides here, and below is a short summary of 5 key takeaways from the event.
#Pricing is a key tool in SaaS businesses
It’s one of the tools that can really make a difference to a SaaS business. It affects all of the key variables a business: it can destroy or make your company the next category leader. But often it’s not just about defining a single price – it’s much more complex
#Pricing is a multidisciplinary decision
One key element in getting pricing right is who is part of the decision-making process. Most companies decide on their pricing once and forget about it. However, the key to success is to review your pricing a couple of times a year. More importantly, keep in mind that pricing is a multidisciplinary decision across management, finance, sales, marketing and product teams.
#Experiment with different pricing strategies
The theory is always easy but putting into practice is often much harder.
Most VCs look for value-based pricing strategy, nevertheless, this route often requires more effort as it relies on direct feedback from customers which can be hard to measure as there needs to be a clear understanding on attribution.
#Land on value-based strategy
Initially, most early-stage companies often use competitor-based pricing and it’s only after they go-to-market and start talking to customers that companies gain an understanding on their ideal customer profile in order to land on their value-based pricing strategy. As this is the strategy VCs often look for, SaaS startups need to nail their value-based pricing strategy by the time they start talking to late Seed and Series A investors.
#Articulate your value metric
Founders need to have a good value metric that is simple, correlates with the amount of value a customer gets and aligns with what the customer wants. While the most common value metric is perceived value – this can be misleading as it can tempt startups to price only for a single sale.
#Final thoughts
Last year we saw the impact and value of SaaS businesses – when many of us became even reliant on tools such as Slack, Zoom, Calendly and Hopin to communicate, connect and collaborate. And it will be interesting to see the pricing strategies that will shape the SaaS winners of 2021.