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Pricer’s Points: Resist Excessive Price Discounting in B2B SaaS – Standing on the Shoulders of Giants | Mrinal (MG) Gurbaxani

As explored in the last post, SaaS companies should learn from their experienced B2B counterparts to strive for value-based pricing and avoid spiralling into a price war. So how exactly does a modern SaaS company stand on the shoulders of these B2B pricing giants?

The short answer: Don’t tolerate being treated as a commodity – prove differentiated value to ease pricing pressure, which is the essence of value-based pricing.

Why is it so challenging to convince B2B SaaS buyers to pay for differentiation in the market? Because so-called superior value has been (over-)promised but not ­proven. A global high-tech digital transformation executive mockingly commented to me that if all his software vendors delivered on their promised cost-savings, his P&L would have zero cost next year!

So let’s take a lesson from the B2B giants. GE Infrastructure Water & Process Technologies has a tagline: “Proof, not promises.” SKF Documented Solutions says “Real world savings – and we can prove it!” These slogans are commitments to measure and document success at the customer-level, not only hyped-up success stories during the sales process. In turn, this value measurement helps these B2B companies to gain trust, understand their differential value and craft value propositions that resonate with target customers.

Why does value measurement matter for SaaS specifically?

Reason 1: To achieve higher price realization – documented value provides an objective basis to refuse excessive discounting. The measurement process also allows for an intimacy to develop between the SaaS company and its customer, gaining trust and credibility to build resistance against aggressive competitor pricing.

Reason 2: Customers don’t buy your solution once – the era of the perpetual software license is over. Quantified value is the safest passageway through the subscription renewal and re-pricing decision.

Read complete article here:

Resist Excessive Price Discounting in B2B SaaS: Standing on the Shoulders of Giants | LinkedIn.