Dear SaaStr: How Do You Price a SaaS Product in a New B2B Market?
I’ve lived it. It’s not as complicated or as hard as it sounds.
The simplest answer is usually to copy the pricing from the closest public company or other break-out leader you can find that is vaguely similar.
It’s OK you are doing something different. But someone else out there is selling a product to at least similar buyers. Or at least, that is providing a similar amount of value. We did a podcast with Godard Abel, CEO of G2 the other day, and talked about their new data product. I guessed the pricing almost immediately. How did I know? I just guessed based on what vaguely similar product sell for. That convo here:
– G2's original vision
– Going multi-product
– Selling with multiple sales teams
– Demand gen spend in 2023
– Why G2 is going all-in on AI on multiple levels
— Jason ✨Be Kind✨ Lemkin (@jasonlk) August 22, 2023
So if you are doing something brand new, or at least a new category, find your comp as best you can.
Someone that if they aren’t doing something similar, they at least provide somewhat similar value at scale. That everyone knows, and knows the price points of. Copying that pricing to start. Salesforce, Hubspot, Box, Notion, Twilio, Slack, Atlassian, etc. etc. … these folks have figured out good pricing models.
99 times out of 100, don’t reinvent the wheel on pricing. Even if you are actually reinventing the wheel. Maybe even especially then. There are just too many other moving pieces.