Product Thinking Episode 225: Aligning Pricing With Product and Customer Segments with Dan Balcauski
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May 28, 2025 Dan Balcauski, founder of Product Tranquility and pricing expert for B2B SaaS companies, discusses the art of aligning pricing with customer segments. He shares his journey from software engineering to pricing mastery, emphasizing how overlooked value capture can lead to poor pricing decisions. The conversation delves into four pivotal elements of pricing, illustrated through relatable examples like fast food menus. Dan also highlights the importance of understanding customer motivations and adapting pricing strategies as a dynamic process, crucial for competitive advantage.
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Pricing Success Depends on Who and How
- Pricing is more about who and how you charge than the actual number you set.
- Companies often fail by rushing pricing decisions and not treating pricing as a strategic process.
Align Pricing with Customer Segments
- Define customer segments clearly by understanding their needs and context, not just firmographics.
- Align your pricing strategy with segments, product value, and competition to make appropriate trade-offs.
Start Pricing With Validated Segmentation
- Start pricing by deeply understanding and validating true customer segments beyond surface demographics.
- Use frameworks like Jobs To Be Done to capture customers' problems and value perceptions.