Innovative Pricing Strategies For Competitive Advantage

During my career I helped price 10+ SaaS products that have generated over $3B in revenues. Recently my CEO Adam Robinson and I discussed how to price our new B2B product. Here's a breakdown of our thinking: BACKGROUND: We are launching a new identity-resolution product that is arguably superior to other substitutes in the market. The market we operate in has organized itself into two tiers: High and lower priced solutions. Here’s a pricing wisdom that I have developed over time : 1. If you want to increase revenue incrementally, increase price  2. If you want to increase revenue exponentially, decrease price 3. If you want to dominate your space, give it away for free and charge later When pricing, it’s important to understand your motivation:   - Are you trying to capture more revenues? - Are you trying to compete more effectively? - Do you want to switch market segment or increase TAM? - Do you want to comfortably win or completely dominate the space? Once there’s clarity, it becomes easy to use pricing as a lever to navigate the business towards the desired outcome. We are fortunate to have a profitable business that’s generating $22M+ in ARR. This allows us to go slow on monetization. From our initial discussions, it was clear we needed to optimize our pricing and GTM for rapid market adoption and not short term revenues. Largest growth always happens at the latter end of the curve, but for that we need to have a bulk of the market already using us. We will try and get 250K+ domains (including free signups) in the next 2 years.  Once we decided we wanted to go freemium, it made sense to double down on self serve motion. This also gave us some direction to the kind of GTM team we want to build. We also knew backend data costs had to be fixed with zero marginal cost to support freemium pricing. To increase our likelihood of capturing a significant TAM, it only makes sense to decrease all friction to adoption - including pricing. Most of the competitors are charging on traffic volume. To change the game, we took volume out of the picture. Given we can provide this solution at no marginal cost, we will resolve unlimited traffic (fair usage) for the same price. We are instead charging on integrations. The lowest priced plan requires users to work with excel files. Whereas the other more expensive solutions provide additional integrations. We think disruption happens at the low end of an established market. So we have a laser sharp focus at the SMB/lower MM users to drive our signup numbers. We ended up with: Plan 1: Perpetually Free, but no download Plan 2: $295/mo, csv download, slack integration Plan 3: $495/mo, Sales Integrations Plan 4: $995/mo, Sales + Marketing Integrations (no annual deals, only M2M) Remember: Pricing is an iterative exercise. We will watch the impact of our initial assumptions and recalibrate.

Competitive pricing isn't just about matching or undercutting competitors—it's a foundational, phase 2 pricing capability that, when used effectively with advanced analytics, can serve as the basis for dynamic pricing models, new product introduction strategies, and long-term pricing strategies. It's about smart positioning to boost market share, enhance profit margins, and drive sustainable growth. How can competitive pricing fuel your business success? • Penetration Pricing: Want to disrupt the market? Set prices lower than competitors to capture market share rapidly. This approach is particularly effective for emerging brands looking to make an immediate impact. Brands like Netflix and Xiaomi have successfully used penetration pricing to gain market share by offering lower prices initially. Competitors can use consumer research and advanced analytics-based insights to understand price competitiveness versus perceived value and determine the optimal pricing strategy for new product introductions. • Price Skimming: Aiming to maximize early profits? Start with a higher price to target early adopters, then gradually lower it to reach broader audiences. Advanced analytics help forecast demand curves and determine the ideal timing for price adjustments. Brands like Apple and Sony frequently use price skimming when launching new products, such as smartphones or gaming consoles, to maximize early profits from loyal customers. • Premium Pricing: Ready to command a premium? Create a perception of superior quality or exclusivity. Use data to understand customer willingness to pay and to segment markets effectively, allowing your brand's value to justify higher prices. Luxury brands like Rolex, Gucci, and Lululemon use premium pricing to position their products as high-quality or exclusive, justifying higher price points. • Intelligent Price Indexing: Want to stay competitive without sparking a price war? Use smart price indexing to strategically align specific product and customer segments with competitor prices while setting others slightly higher or lower based on segmentation, price elasticity insights, and optimal competitor price gaps. This approach allows you to selectively take the price off the table—indexing higher on certain items while knowing that only a certain percentage of customers will react to price differences. This self-segmentation helps drive profitability while maintaining competitiveness. Analytics can reveal where you can stand out—whether through customer experience, product features, or added services. Crafting an effective competitive pricing strategy goes beyond choosing a tactic. It requires understanding market dynamics and competitor behavior and clearly defining your value proposition. Using advanced analytics empowers smarter pricing decisions and drives growth. Check out our latest article on effectively using competitor pricing intelligence to drive profitable growth in your business.

Louis Vuitton just launched a $160 lipstick with ZERO market demand. And it might be the smartest pricing play I've seen all year. 🔥 Here's why this is brilliant: When there's no demand at your price point, conventional wisdom says to lower it. But LV is doing the opposite - they're not selling lipstick, they're selling market leadership. This is what I call "strategic anchoring." By pricing at $160, they instantly make Hermès' $85 lipstick seem reasonable. Their own $69 refills - more expensive than a full Chanel lipstick - suddenly feel like a bargain. This is impossibly premium positioning at work. When you price beyond rational demand, you're not targeting customers - you're targeting COMPETITORS. You force the entire market to compete on your terms. Every beauty brand must now justify why their lipstick costs "only" $85. The lesson? Sometimes the best pricing strategy isn't about maximizing sales - it's about maximizing competitive advantage. Price can be your moat, not just your revenue stream. Watch the full breakdown → Link in comments #PricingStrategy #LuxuryMarketing #BusinessStrategy #PremiumPositioning #BrandValue #CompetitiveAdvantage #SaaS