You either have a million questions that you don’t know how to arrange on your product pricing survey, or your mind is blank and you don’t know where to start. Well, monetizing your product is a pretty complex topic and many companies, in fear of going down a rabbit hole, tend to keep their distance from adapting and changing their prices.
But if you’re here, then you must know chickening out is not the way to do business! If you are providing more value to your customers, then let your product be appreciated at the price it deserves.
In this article, we’ll look at examples of lean pricing surveys, trends of SaaS companies’ pricing changes, and strategic insights from our special guest John Kotowski.
We hope to inspire you to be more hands-on and persistent in pricing research and experiments. You can employ manageable yet powerful approaches to drive your revenue growth.
What is a pricing survey?
First let’s clarify some definitions.
A pricing survey is a research method using surveys to obtain information that will drive your pricing and packaging decisions for your product or service. The outcome of the survey helps companies understand the perceived value from the market, the attributes impacting the purchase decision, the product-market fit, etc.
What is pricing research?
Pricing research is an act of investigation and validation of the market demand and supply. The goal of the research is to optimize the price range of a product or service that helps companies to meet their strategic goals, such as maximizing revenue or market share.
What is product monetization?
Product monetization is the process of deriving revenue from the value you offer to your users. The ways and processes to monetize a product include research, promotion, sales analysis, experimentation, etc.
Meet John Kotowski, co-founder of PricingSaaS
The water of pricing is flowing, not static. That’s why we invited John to shed light on the most common questions about pricing. You can even start using the pricing survey templates he suggests immediately!
John is the co-founder of PricingSaas, a competitive intelligence product that uses AI to summarise pricing changes across the B2B SaaS industry. John also runs a boutique agency Buyerson Inc., that helps software companies with product monetization.
John also shares brilliant insights regularly on Linkedin about SaaS pricing trends and tactics.
How to set the right price for your product?
To this, John responded with another question: What is a fair price for your product? The answer is almost always “it depends”.
The reason why it is a multi-faced question, is because the answer depends on multiple factors. This includes competition, the product’s features and functionality, the economy, your target market, how you sell … and so on and so forth.
Additionally, none of these factors are static. Your competitors change, your product changes, the economy changes, so even if you nailed your pricing last quarter, it is likely to be suboptimal this quarter.
So instead of thinking about “setting the right price”, you really need to establish a process to continuously collect information and iterate on pricing, otherwise you are leaving money on the table.
How often should companies update pricing?
Following from the previous question, John said the frequency you should follow in updating prices, as a rule of thumb, is once a quarter.
At PricingSaaS, over 3000 B2B SaaS pricing pages are tracked and here is what they have observed:
6 out of 10 companies in our Top 100 PLG index updated their pricing pages in the last 90 days.
In contrast, only 1 out of 10 companies update their pricing page for the other 2900 companies over the last quarter.
Clearly, there is a correlation between being a leader and how frequently pricing iterations take place!
What should pricing changes be based on?
When we talk about pricing changes, we often think about dollar amounts. In reality, there are a lot more variables to pricing that you can experiment with, especially if you publish your pricing on your marketing page.
Some common examples that John brought up include:
Feature changes
This could be new features or capabilities that you want to highlight, or simply rearranging how you present the features in your pricing plans.
Discounts
Many companies use discounts as part of their acquisition strategy. This works especially well when you have a sticky product that’s hard to leave once the full price kicks in.
Copy
the words that describe the persona or overall value proposition is another common change we have observed on pricing pages. They are often run as a/b tests, to see which change drives higher conversion rates.
Here’s a breakdown of pricing page changes over the last 90 days from the top 100 PLG companies (May 11th – Aug 11th 2023):
You can see that the actual changes in prices only took 34.5%, and there are many other ways to impact your go-to-market pricing.
This is also why we suggest your pricing research should expand to understanding your most important features, how you present your packages, etc.
What product pricing questions to ask customers?
Finding the sweet spot for your pricing requires precise understanding of your customers. That goes beyond their price sensitivity, your product pricing surveys should explore how customers perceive the value of your product, in order for you to monetize those attributes.
Here are 8 essential product pricing survey question examples for you to ask:
- When it comes to [product], what is your #1 goal?
- What problems were you trying to solve when you first looked for [product]?
- Which of these features is the most valuable to you?
- What features would you be willing to pay extra for?
- How well does the pricing match your expectation?
- Is there anything in [package] that is irrelevant to you?
- What attracted you to the [product]?
- What made you choose this product over competitors?
Usersnap can help you scale in-product surveys and send these pricing questions to your users at specific times and pages.
Micro product pricing surveys get higher engagement and response rates to boost your research significance. Get started easily with these templates today.
How and who should take care of the pricing strategy?
“To nail your pricing strategy, you have to nail your buyer personas.” – John Kotowski
Buyer personas basically describe your target customers, their pain points and how you are solving them through your product. You then use that information to create plans and pricing that aligns with these personas.
Sounds simple, right?
Well, the biggest challenge is that your customers usually have multiple solutions to choose from. Your buyers will use your competitors as a frame of reference. Hopefully, you have something that differentiates your product from the rest of the pack, but the amount of money you can charge is typically limited by the competitive price points in your space. And this is where things get really interesting… Your set of competitors is determined by your positioning.
This is where PricingSaaS can help. And let’s use PricingSaaS as an example:
Since we monitor and collect SaaS pricing data, we have a few options on how we position and monetize the product. We could position PricingSaaS as a page change detector. In that case, here is our list of competitors and we can see the price range will be around roughly in the $10-$100 range.
But if we position PricingSaaS as a data enrichment platform, where we provide pricing data to go-to-market teams, our competitive set changes… and so does the price, now the price point being much higher.
So, ultimately – pricing strategy should be owned by someone who has influence over product strategy, as well as marketing and sales operations. This is typically GM, CPO or CEO/founder.
Many companies invest in pricing committees to align the different departments, but ultimately the person responsible for the overall pricing strategy is someone senior who reports to the CEO or someone on the C-suite.
How to plan for your pricing project
Now that we’ve put it out there your pricing project does not need to be all hands on decks, let’s look at how you should lead your next pricing update.
1. Evaluate your competitors
As John mentioned, your competitive space determines the range of your pricing. Identifying your positioning and differentiation among your market category is a critical, and hopefully not too brutal, step. From the value metrics to highlighted features to even the discounts, these are pricing factors you should consider as priority.
Tracking what changes competitors make to re-evaluate your strategy is another low-hanging fruit. This includes updates of the content on their marketing pages, and it is highly likely that you’ll hear questions in sales calls of prospects comparing a new thing on your competitor’s website that you don’t have.
2. Tools for pricing surveys
Depending on the hypothesis you want to validate, you may want to run different types of research and ask different pricing questions. Here are three popular SaaS product pricing survey tools and the pros and cons of each.
Usersnap
Usersnap offers a user-friendly platform to create custom surveys and target specific audiences by user events, time on page, or user properties. You can embed surveys to emails to collect off-site and post-experience feedback as well.
Having a consistent stream of feedback about your pricing and features helps you stay aware of your most competitive advantages and opportunities. You can pass your custom user data from your product to Usersnap so each feedback has more context attached. Connect Usersnap to your project management tools and data analysis tools to fully leverage the insights.
You can set up a survey in minutes with a free trial account.
Conjointly
A sophisticated market research tool that supports advanced analysis, such as conjoint analysis for Van Westendorp Price Sensitivity Meter, and many testing methods, like brand and concept testing.
The Conjointly team is formed by research specialists and provides consulting services to their clients to ensure a successful process for each research. They also offer a free trial plan, and the professional plan starts at $1795 per user per year.
SurveyMonkey
You’re probably already familiar with this one, it’s suited for many use cases predominantly long-form surveys. SurveyMonkey offers extensive customization options for the question fields, such as imagery answers.
If you want to test your pricing or product with a new group of audience, you can use their audience panel to collect survey responses from new people in over 100 countries.
3. Strategize the pricing model that boosts your product’s value
Finding a pricing model that fits your product and creating a scalable strategy is not easy. While there are many pricing models out there for you to follow, such the value-based pricing or the cost-plus pricing, you have to focus on your buyer personas. What do they perceive as value adding? How will they make the purchase decision?
Ultimately, your customers will pay for the problem your product or service helps them to solve.
And it’s important to remember that this is not an one-off project, you can and should change your pricing strategy as you go along.
Find your product-price fit with these pricing survey templates
When designing your product pricing survey you are not just validating the willingness to buy.
The research extends to understanding the value of the features your product has to offer, the messaging your marketing puts out there, and the position you stand among your competitors.
It’s a big but exciting and powerful topic, and with the knowledge and tools you have learned here, you are ready to dive into research and experiments!
Get started with one of Usersnap’s survey templates today, check out the pricing survey templates series here.
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