Read this before re-pricing your SaaS product because of the recession • australiabusinessblog.com
It does not matter circumstances, SasS pricing is always and always will be a challenge. Underprice your product, use a pricing model that doesn’t work for your ICP, don’t offer self-registration, or offer the wrong features as add-ons – all of these pricing and packaging issues (and many more) can cost you a lot of revenue.
But the economic downturn has added another element to the mix. Common wisdom tells SaaS founders to adjust their prices to changing market conditions, but is that really helpful advice for SaaS founders? As far as I can see, it’s not for most.
Undeniably, the economic downturn will change buying behavior and decision-making processes for some of your potential customers. But it is wrong to assume that this means that you are asking too much for your product in today’s market.
In reality, most of the cuts right now are unfortunately the big ticket items (staff). SaaS is comparable just a drop in the ocean. However, that does not mean that SaaS is completely secure. Companies want to reduce the fat in their teams, often rethinking entire workflows and considering which software can help fill the gaps. This is especially true for low-code/no-code products where customers can settle for less expensive technical resources. In that sense, SaaS products are just as much a part of the equation.
If you’re already thinking about a price and packaging change, you can thrive when the weather improves.
When you see your numbers not rising (or maybe falling), it can be very tempting to frantically change your prices, offer discounts, or question your strategies. But before embarking on a price reduction journey, make a careful analysis. If your sales are falling short of what you expected, there’s one more question to ask: actually wrong with your SaaS product or the pricing?
It is important to make a distinction here. Does the real problem lie in how you have valued (priced) your product? Is it the impact of the market on the demand of your product? Or is there a problem with the product itself? Each of these are completely different diagnoses with different prescriptions.
