SaaS Pricing Strategies to Stimulate Sales

SaaS Pricing Strategies to Stimulate Sales

by Jim Geisman


Kicking off the Zuora Guest Blogger Series, Jim Geisman, founder and principal of SoftwarePricingPartners, Inc. shares new ways to monetize your existing assets by making quick modifications to pricing and packaging.


Software pricing and packaging are often viewed as long-term tools. So, in a severe economy — when you need action now — what do you do?


Many software companies believe their only option is to counter with deeper discounts, and extras like free products or services. While these tactics can help close deals, these quick wins may be setting precedents that will be hard to overturn down the road.


To stimulate sales in a slow market without the baggage of long-term liabilities, here’s a thought: Give your sales team the freedom to negotiate packaging options, just like they have the freedom to negotiate discounts.


Far-fetched? We think not. Here’s what we suggest…


  • Downsize or “de-feature” existing products to create new, no-frills packages. Unbundle a larger product into several smaller packages. Limit, or eliminate, high-value services, and pare down what’s inside your products, disabling (but not hiding) more-advanced features.Whichever of these you choose, the key is to downsize in a way that allows you to rapidly bring these lower-value, lower-priced products to market. Avoid creating new packages that require any new product development.
  • Get these no-frill packages into the hands of your sales team immediately. Don’t wait for launch plans, new price lists, etc., take your plans straight to your sales force now. Give them the guidance they need to start selling these new offerings immediately. Let them know what options they can trade for price, and give them the go-ahead to start selling.
  • Use time limits and short-term contracts to control these deals. Position them as short-term promotional packages that won’t necessarily be around downstream. This positioning should also be a part of any deep discounts or free product offers, if they continue to be a part of your “poor-economy arsenal”.Don’t get locked into long-term contracts that guarantee price protection. Instead use short-term contracts that give you the freedom to raise prices and promotional offers to coax prospects off the fence.


We will also cover ways to more effectively use pricing, packaging, and discounting in detail during a series of software pricing workshops that will be held this year around the country. The first two workshops will coincide with OpSource’s SaaS Summit (March 11th)
and SoftLetter’s SaaS University (April 16th). Zuora readers can save $200 off the $595 registration fee by entering the promo code ‘zuora’ when they register.

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