How to implement value-based pricing
Now, what do you need to do when it comes to applying value-based pricing? Once the research and analysis is over, the hard work is pretty much done, and the experimentation can begin!
1) Create packages within the pricing plan
We’ve really hit home about the whole customer segmentation thing, haven’t we? That’s because one of the first things you should be doing when you are looking into value-based pricing is divvying up your services into packages to suit each customer segment.
Create bundles that suit each segments’ perceived value of your product. This not only takes into account the customers’ need for your product, but also the price point that they’d be willing to spend for it.
By offering a range of packages in your pricing plan, you appeal to a greater audience, at the same time as giving yourself the opportunity to upsell to clients further down the line.
Framer’s pricing plan, which we mentioned above, is a great example of this with their Freemium, Standard and Teams pricing, leading into a further detailed tiered pricing plan for different sized Teams.
2) Determine your price point
This is the main part of the experiment! After identifying and analyzing each buyer persona to work out your segments, you then need to apply the right price point for each.
Your research and analysis phase will undoubtedly help you towards this point, however, it’s important to remember that creating the optimal pricing plan can take time. There might be a few tweaks here and there, but keeping up to date with your customers will help you get there.
Leading us nicely onto our next point…
Keeping up communication with your customers is absolutely essential if you want to see success with a value-based pricing model. How else are you going to know what’s working (and what’s not working) for your clientbase?
It’s down to great customer service to listen out for what they’re saying, as well as great marketing to explain to your customers exactly what value you are providing.
4) Introduce your value-based pricing gradually
If you’re a SaaS business that has been going for a while, take your time introducing your new pricing strategy to your customers. Consider trying it out on a small selection of clients first, before applying it to your entire client base. Ideally, this selection should be made up of new clients that haven’t had any, or much, experience of your old pricing plans.
This way you can highlight any teething issues without it causing a mountain of work (and emails in your Support inbox) and get some good, honest, unbiased feedback. Lovely.
5) Keep up the good work
There’s very little point in introducing a value-based pricing strategy if you start to slack on delivering value once it’s in place.
The more you keep up the good work = the more value you are delivering to your customer = the more those customers will be willing to spend = the more customers want to know who you are, and try you out for themselves.
And there we have it - hard work really does pay off.