Dan Balcauski is the founder and principal consultant of Product Tranquility, a SaaS pricing consultancy. Dan shares the core building blocks of SaaS pricing, including customer segments, value, competition, and positioning strategy. Dan also describes the common mistakes in pricing and the importance of having structured pricing conversations with customers.

In this expert interview, Dan shares his perspectives on key SaaS pricing challenges:

• Why CEOs need to be involved in pricing decisions as pricing and packaging affect everyone in the organization.
• How understanding customer segments, value drivers, competitive alternatives, and differentiation are key building blocks of SaaS pricing.
• Why choosing the right pricing metric and offer configurations can help target multiple customer segments.
• Why having pricing conversations with customers can provide valuable insights into their perception of value and willingness to pay.
• How pricing plays a role in positioning and branding.
• How AI is impacting pricing strategies in the SaaS industry.

“One of the healthiest ways to think about pricing is that price is a thing, but pricing is a process. Like any other process in your company, it probably will have a process owner and some sort of document to describe it.

“Your first pricing iteration is probably not going to be your best iteration. You’ll keep improving it. You don’t prevent your team from answering customer support tickets until you have the perfect customer support process. It’s the same with your pricing.

“You’re going to make mistakes. Those mistakes will be way less fatal than you imagine they will be in your head. But as long as you’re committed to improving that process over time, you’re going to start moving in the right direction.”

• Dan Balcauski on LinkedIn
• Product Tranquility website
• SaaS Scaling Secrets podcast

This week’s podcast is sponsored by Cypress Growth Capital. For 15 years, Cypress has provided non-dilutive growth funding to bootstrapped SaaS founders, including many successful founders I’ve interviewed here on this podcast.

Learn more and connect with Cliff Sentell at cypressgrowthcapital.com/practical to have a conversation about your growth plans. 

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app.