Posted by Alan Nazarelli ● Tue, Jul 12, 2022 @ 09:36 PM

Your Pricing Strategy and the Inflation Factor

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Lately, we have been having several conversations with our clients about their pricing. With inflation concerns being top-of-mind for everyone today and in ways not seen in the last 40 years, it's time for all companies to revisit their current pricing strategies. Physical goods, both durable and perishable face real cost increases in their supply chain. These factors may not directly affect you if you are, say, a B2B SaaS player as a lot of our clients are. But sooner or later, rising costs will affect us all. At Silicon Valley Research Group, we believe revisiting pricing/packaging strategies is an imperative. And the time is now, to allow time for implementation for the new year. We are also seeing technology buyers reeling in spending trending in our recent qualitative research interviews with CIOs and this recent article in Barron’s confirms our findings- https://www.barrons.com/articles/tech-stocks-earnings-season-51657294025

To this end, we are offering up a complimentary pricing strategy consultation to our existing clients and prospects during the month of July. The scheduler is included below and is open to product management, marketing management and financial personnel, and will be conducted by me or one of our Senior Analysts. Before you book a session, please consider the following scenarios that may affect your business negatively in the coming months.

  1. Do your SKUs or packages match what buyers are interested in today as they wrestle with cost control challenges? What worked during periods of expansive thinking and scaling may not fit today's reality for your buyers. As a CIO recently told us, new applications and workloads that even last year would have been cloud-bound as part of their Cloud-First strategy are now seriously scrutinized for suitability to be hosted on legacy data center servers to extend their life and save money on escalating cloud consumption costs. Your current SKUs may be subject to a product/market misfit, not because your product does not create value, but the pricing strategy does not fit the buyer's current reality and needs.
  2. Have competitive moves altered the selling landscape for your offerings? This is critical success factor which is why we have made this an integral part of our pricing studies incorporating both directly and indirectly substitutable offerings in our price sensitivity analysis research. In cases of product complementation, where your product co-exists with adjacent competitive offerings, is it possible for competitors to co-opt your space. We can test the extent to which such complementary offerings pose a threat and uncover strategies to preempt such possibilities.
  3. Are you leaving money on the table? Counter-intuitive to the rest of this discussion, as we are exploring how what your buyers are willing to pay has fallen in the face of inflationary pressures, but is it possible that they are willing to pay more? Our research recently helped a startup launch their offering at a higher initial price than the founders had expected based on their intuition through our price modeling and simulations, enabling them to price their offerings at approximately 35% higher pricing.
  4. Have some non-product aspects of your offering become more important today and how can they best be monetized? Many SaaS companies also have a services component? Has the current skills gap impacted your customers' ability to implement your solutions and can service offerings be tailored and priced to fill the gap? Does the skills gap point to a demand for low code development and customization and does your offering need to be tweaked to accommodate citizen developers?
  5. Additional monetization opportunities? At the same time we are testing pricing strategies for suitability to the current business climate, pricing studies can provide opportunities to test for additional monetization opportunities. For example, are their peripheral offerings or by-products that can by monetized to make up, at least partially, for any potential revenue loss in your core offerings.

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The calendar below has 20 open slots for pricing consultations on a first come first-serve basis. We are booking 30-minute sessions but will leave time open for longer discussions if required. You may also add other members on your team to the conversation. And lastly, if your time zone does not accommodate the open slots, please email us at insights@siliconvalleyrg.com.

Pricing Strategy Discussion

Alan Nazarelli is President & CEO of Silicon Valley Research Group.

Topics: Market Research Best Practice

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