The Ultimate Guide to B2B Sales Pricing Strategy

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Pricing a B2B (Business to Business) product can be overwhelming, largely because B2B organizations need to consider all selling characteristics before pricing.
The pricing strategy should reflect all the hard work the internal team has put in to develop a compelling product.
Here is a comprehensive guide on B2B pricing strategies to help you pick the best one for your business.
B2B pricing is fixing various B2B product and/or service prices depending on the overall cost and effort involved. For example, if a business is selling project management software to another business, the following factors will be considered:
Different B2B businesses use pricing models and strategies to establish pricing for their products and services.
An appropriate B2B sales pricing strategy can make or break a business's overall revenue. 90% of startups fail, and many times, it is because of a weak pricing strategy. Companies often focus on process automation, lead generation, and deliverables but a strong pricing strategy should
Pricing is complicated and requires the involvement of multiple departments. As a result, pricing often becomes a secondary factor for organizations. However, finding and implementing an optimized pricing strategy can drive businesses towards exponential growth.
B2B pricing model is the structure that businesses follow to decide how to charge the users for different products and services. Here is a list of the most popular pricing models for B2B professionals:
Value-based pricing is when a brand prices its products based on its understanding of the customers’ needs and requirements. Under this pricing model, the B2B decision-makers try to perceive the worth of a product from the end-users’ point of view.
This pricing model is dependent on marketing initiatives. Largely because brands implement various marketing tactics to seek end users’ attention. To successfully implement value-based pricing, businesses should put strong effort in market research, survey, collecting customer feedback, etc.
The above image shows how Trello uses a value-based or freemium pricing model. Starting from the free plan to the Enterprise plan, Trello keeps adding several features and integrations. Accordingly, the price also increases.
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A popular pricing model for B2B organizations is to charge based on the number of users. The price range varies depending on the increase or decrease in users. For example, an instant messaging service may charge a certain amount for the first 100 users, and the price also increases as the number of users crosses 100.
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The dynamic pricing model works best for large enterprises residing in multiple locations. Pricing depends on numerous factors like currency, customers’ requirements, purchasing power, etc. Hence, if a business operates in various locations, it is mandatory to consider these factors for fixing the prices of different locations.
Businesses should note that dynamic pricing is not about changing pricing for each business division. It is about segmenting each business division into various categories and fixing the prices accordingly.
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Competitor-based pricing strategy is about fixing prices based on competitors’ pricing strategies. An organization needs to estimate an average price for all its competitors to implement this pricing model.
Afterward, the brand can decide whether they want to keep the same price or go slightly higher or lower the average price. The concept of this pricing model is that you are letting your competitors do all the hard work and hoping that their pricing strategy is right.
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A flat-rate price is when a business charges a single price for all its products and services. It is a one-size-fits-all pricing model. Many SaaS brands adopt this strategy, and they charge their customers the same every month, regardless of the number of users or usage limit.
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Now that you have a brief idea of different B2B pricing strategies and models, let’s highlight some of these mistakes:
Pricing strategy can never be constant. The key to success for any business is consistently experimenting with their pricing strategy and upgrading it as per changing marketing trends. However, some companies prefer one-time research and hardly keep up with the changing market trends. That’s a critical pricing mistake and can lead to huge revenue loss.
Ideally, businesses should appoint dedicated market researchers to conduct customer surveys, evaluate competitors’ pricing strategies and conduct A/B testing to optimize their pricing strategy. This continuous experiment helps them to ensure that the pricing strategy is not becoming stale over time.
Identifying a pricing strategy is difficult if you don’t know your target buyers. Businesses that move on to create a pricing strategy without creating an ideal customer profile make a significant mistake.
An ideal pricing strategy should be customer-centric. You need to know the prospects' financial status, purchasing power, and, most importantly, how much they are willing to pay for your product. When a brand has all this data, it becomes easier to develop a pricing strategy.
Early-stage startups often provide too many discounts to the customers. While they perceive this as a retention strategy, it can always go the other way. Customers may believe that the product is of poor quality, which can drive them away. Occasional discounts are fine as long as customers are interested in your products and want to invest in them.
Selecting a significant pricing strategy is the first step toward growth. Apart from evaluating the pricing models mentioned above, businesses should also focus on finding a sales enablement tool that provides real-time insights into customers’ behavioral patterns. That way, sales reps, and marketers can identify what price the customers are willing to pay.
When we say sales enablement, the first tool that crosses our mind is - Salesken. On a mission to improve your sales strategy, this B2B SaaS tool helps sales managers and reps with the following:
To know and explore further, book a sales demo now!
SaaS pricing is a unique pricing model where customers pay based on subscriptions. The factors that decide SaaS pricing include target customers’ needs, brand revenue goals and software usage.
Without a straightforward pricing strategy, target customers can confuse and select your competitors over you. B2B pricing helps businesses to add transparency to their operations and attract customers easily.
There is no hard and fast rule to set up your B2B pricing strategy. Businesses must evaluate various B2B pricing models to select a suitable strategy. Some quick tips for selecting a B2B pricing strategy are as follows:
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