Pricing Strategy
The High Cost of Low Prices: Why Competing Solely on Price is a Risky Move for SaaS Companies
I understand the competition is tough. But here's the thing: competing solely on price is a risky move.
Ever tried winning a customer by undercutting the competition on price? 🤔
I understand the competition is tough.
But here's the thing: competing solely on price is a risky move. 🤯
Why? Here are some things to consider:
🧐 Low prices can indicate low quality in the minds of potential customers
💸 You'll need to acquire more customers just to make ends meet
🔪 There will always be a competitor who comes along and offers a lower price
💼 It's hard to build a strong brand reputation when you're always discounting
🪙 By focusing solely on price, you'll attract price-sensitive customers who may not value the quality of your product
💻 While you’re undercutting everyone, you'll struggle to invest in the growth and development of your product
So focus on setting a fair price for you and your customer, get strategic with your discounts, and focus on the value and impact your SaaS brings to your customers.
You'll be able to attract customers who understand and appreciate the value of your offering, and more importantly, you’ll repel those who don’t.
My good friend Kyle Racki said this: “Pricing lets you choose which game you’re playing. Don’t want to be in a race to the bottom? Don’t play that game.”
