The Structure of SaaS Pricing and Designing SaaS Pricing Models with Ulrik Lehrskov-Schmidt

Ulrik Lehrskov-Schmidt is the partner of willingnesstopay.com where they help companies create pricing models that radically accelerates growth and unlocks the value of their underlying technology. He has founded and sold two different companies, and he has a master's degree from Harvard. He also has an upcoming book called "The Pricing Roadmap" which will be published this December.

In this episode, Ulrik enumerates four (4) things that he thinks are the most important in SaaS pricing. He also shares his methods on product segmentation and explains why the traditional "good, better, and best" product tier is lacking some important details.

Why you have to check out today's podcast:

• Learn about designing your models as well as the structure of SaaS pricing
• Find out how different 'tiered packaging' is to Mark's idea of good, better, best
• Understand what prescriptive solution is and why you should not do it

"Usually, people underestimate the pricing power they have in the market. So, I see, even if you had to do it blind, the chances that you could make more money by raising prices, even poorly, is better than what you're doing."

– Ulrik Lehrskov-Schmidt

Topics Covered:

01:47 – How Ulrik got into pricing

05:43 – The top four things that really matter in SaaS pricing

08:22 – There are no perfect outcomes; only workable and functional outcomes

09:27 – How Ulrik does product segmentation

12:09 – What is prescriptive solution and why you should avoid it

15:19 – Ulrik's attempt on product packaging with conjoint analysis

18:04 – What Ulrik likes about being a pricing consultant

19:45 – Ulrik's thoughts on the three tiers of products (Good, Better, Best)

21:24 – How Ulrik actually defines the tiered packaging model

22:08 – The specifics of "Tiered Packaging"; how it's different from good, better, best

28:30 – Ulrik's pricing advice

29:59 – Connect with Ulrik

Key Takeaways:

"If you have segments that are so different that they need different pricing models and product models, that's the first thing you need to figure out." – Ulrik Lehrskov-Schmidt

"There are two different high level tool boxes to do price discrimination; pricing matrix and packaging. Packaging runs on functionality, and pricing metrics on some volume or usage." – Ulrik Lehrskov-Schmidt

"There's not a perfect outcome. There is a workable outcome, functional outcome to run through. And then you might want to go back and change something if there is a better outcome to be had." – Ulrik Lehrskov-Schmidt

People / Resources Mentioned:

• The Pricing Roadmap: https://www.willingnesstopay.com/saas-pricing-book

Connect with Ulrik Lehrskov-Schmidt:

• LinkedIn: https://www.linkedin.com/in/ulriklehrskovschmidt/
• Website: https://www.willingnesstopay.com/
• Email: ulrik@behaviouralstrategy.com

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: mailto:mark@impactpricing.com