Hey Listener! If you’re serious about mastering the art of product pricing in the B2B SaaS realm, buckle up—this interview is filled with knowledge you can't afford to miss. (Pretty good pricing, dad joke, huh?)In this episode, I chat with Bill Wilson, Pricing Coach and founder of Pace Pricing. Wilson has over 25 years of software expertise and specializes in pricing strategy and tactics for his coaching clients.Connect with Bill on Linkedin.

Listen now on Apple and Spotify.

Key Mistakes in SAAS Pricing

Bill framed a crucial premise: Pricing is dynamic and rooted in market changes and customer perceptions. He pointed out the fear many have of changing pricing models due to confidence issues. Bill stresses that pricing isn't static, and it’s essential to periodically review and adjust it to reflect the growing value of your product.

* Misunderstanding Market Dynamics

* Pricing is a Negotiation

* Table-stakes features aren’t enough to justify the purchase

* Founders Delegating Sales Calls Too Soon

* Not Willing to “Hill Climb”

Time Stamps

00:00 Introduction to Pricing Challenges

03:07 Deep Dive into SaaS Pricing

05:54 Common Pricing Mistakes and Anti-Patterns

08:55 Understanding Customer Value and Competitor Pricing

13:07 Monetization Strategies and Feature Valuation

16:55 Pre-Sales and Customer Engagement

18:07 The Importance of Customer Surveys

18:46 Leveraging Data for Product Development

20:22 Insights from MIT Sloan Executive Education

20:47 Understanding Pricing Strategies

22:58 The Role of Product Managers in Pricing

27:27 Founder-Led Sales and Founder-Led Product Management

29:25 Capturing Market Demand

32:04 The Multifaceted Role of Product Managers

36:30 Final Thoughts and How to Connect

1. Misunderstanding Market Dynamics

According to Bill, here’s what often goes awry:

* Guessing the Price: Too many businesses set prices based on intuition rather than data. Bill argues the right question is not "How much should I charge?" but rather, "How do I charge?"

* Ignoring Competitors’ Shortcomings: Copying competitors can be misleading. Understanding your unique value—and then pricing for that, rather than mimicking competitor pricing blindly is essential.

2. Pricing is a Negotiation

"People just don't change their pricing regularly enough… I think one of the biggest mistakes is that people just don't change their pricing regularly enough. Like they don't, they don't look at it. They don't, you know, raise the price. People are scared to death to raise prices or even change their model…

Takeaway: Approach pricing like a negotiation. Keep making higher-priced offers, then regularly iterate your pricing strategy as your product and market evolve. This experimental mindset will help you capture actual product value over time.

3. Table-stakes features aren’t enough to justify the purchase

Understanding and articulating your product’s differentiated value is paramount.

"Understanding what value you're bringing to your customer is probably the most important thing you can do……pricing is about confidence… what value you're bringing to your customer is the most important thing you can do. It's constantly changing because the market's changing. People's perceptions are changing…

… Why do you exist? You have the same price and claim to solve the same problem. What's the point?”

Takeaway: Consider what's valuable to your customers by examining what you can do that a competitor cannot. Reflect on how markets and perceptions shift, and stay proactive in aligning your pricing. In many ways, pricing is about optics rather than being the most comprehensive product.

3. Founders Delegating Sales Calls Too Soon

Bill’s journey from software development to founding Pace Pricing underscores the importance of adaptability. He highlights how his ventures shaped his understanding of pricing and product value, with each role honing his approach to monetization.

Founder-Led Sales: Bill emphasizes that founders typically excel at leading sales and product decisions in the early stages because they have an innate understanding and passion for their creations.

“I’m a big fan of founder-led sales, especially at the beginning. I made the mistake of hiring a sales guy a few months after launching our product, and it was a disaster. He relocated, and we were still experimenting. It didn’t work.

Building a Confident Proposition: Bill’s stories of creating a product led to monetizing solutions that genuinely solved customer problems—his narrative serves as a roadmap for budding entrepreneurs or those in product management.

The founding team should run product because they can make necessary decisions. Product managers can’t do it in the same way; they may feel obligated to protect their jobs. As a founder, you can make bold decisions that might not seem sensible at the moment, but you believe they are the right moves to steer the company.”

4. Not Willing to “Hill Climb”

One way to figure out willingness to pay is to use a simple technique called hill climbing. Set your price for a small product and, every five to ten sales, increase the price. Keep doing this until you receive pushback, with around 20 to 30 percent of people saying no. At that point, you may have identified the maximum willingness to pay.

Takeaway: Bill highlights the essential interplay between product and monetization, a concept every product team should integrate into its workflow.

If you'd like to learn more about pricing strategies directly from Bill, connect with him on LinkedIn and watch his informative pricing page tear-down videos for more hands-on insights.

Also, we only scratched the surface of the value of this episode. Make sure to listen to the full interview when you get a chance.

Listen now on Apple and Spotify.

Cheers!

Caden Damiano

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