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Pricer’s Points: A Question About Pricing Models | Mark Stiving

“Mark, I was in your pricing class yesterday (I was the obnoxious one wearing a baseball cap) and it was very informative, I learned a lot.

“I know you’re very busy, and I apologize for the imposition, but one thing we didn’t go over were different pricing models. For example, in our business we have varied pricing models for our SaaS products. Some are a variable monthly fee based on hospital size (bed count), some are “pay by script” (for retail pharmacies), or a “winners only” pay model (meaning only pay for a script when it is profitable, regardless of total script count). Another common model I’ve seen in the healthcare industry is, “We keep 25 percent of any reimbursement we are able to capture that was missed at the time of claims submission.

“One of our biggest challenges before going to market (or sometimes after) is determining the appropriate model to use (even after deciding to go SaaS over traditional software) and I did a cursory search of your blog for strategies on this and I was unable to find any. Thanks, E.”

You’re probably looking at several different things when choosing a pricing model.

Where does value come from? An ideal pricing model charges more as the customer gets more. Often this means a transaction-based model. The best models are easily accepted by your market because your customers pay more only as they get more value.  Each of the three examples you provided seem to follow this, but the winners-only model is probably most ideal from this perspective.

Read complete article here:

A Question About Pricing Models | Pragmatic Pricing.

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