In a recent video titled "Get Inside Your Customer's Mind to Optimize Your SaaS Pricing" from the channel "AI, SaaS & Agentic Pricing with Monetizely," an expert shares valuable insights on how to leverage qualitative research to validate pricing strategies for SaaS businesses, particularly those serving enterprise customers.
Why Customer Research Is Crucial for SaaS Pricing
Pricing is one of the most critical elements of your SaaS business strategy, yet many companies make pricing decisions based on internal assumptions rather than customer feedback. The disconnect between what you think provides value and what customers actually value can lead to missed opportunities and revenue leakage.
As the speaker in the video explains: "Many companies have the bias of thinking that everything that they do is valuable but customers don't think that way."
This insight highlights a fundamental challenge in SaaS pricing: without proper validation, you risk pricing your product based on features customers don't value, while undervaluing what they actually care about.
Qualitative Research for Enterprise Customers
The video emphasizes that qualitative research works particularly well for enterprise customers where the complexity may be higher. Unlike consumer-focused quantitative methods, enterprise customer research often requires:
- In-person visits or calls
- Group discussions with multiple stakeholders
- More in-depth conversation about complex needs
According to the presenter: "This works better for enterprise customers where there may be accounts you may have to visit them, you may have to call them, there may be a group that has to come, and the complexity may be much higher."
The Forced Ranking Method
One of the most powerful techniques discussed in the video is the forced ranking method. This approach requires customers to make tough choices between options, revealing their true preferences rather than allowing them to say everything is important.
The speaker explains the process: "First you want to bring out like force the customer to make choices and based on the choices that they make… you get their feedback that helps you build empathy with the customer and then you have them force rank choices around benefits that they're getting, value proposition, features."
This methodology can be applied to various aspects of your offering:
1. Benefits and Value Propositions
Have customers distribute points or dollars across different benefits to understand which ones they value most. The aggregate results will show clear patterns of what drives purchasing decisions.
2. Feature Prioritization
The presenter suggests showing customers different plans and asking them to allocate resources: "I'm showing them different plans and saying you have $100 to pick to spend on the one that you really like."
This exercise helps product teams understand which features actually matter to customers and should be prioritized or highlighted in marketing materials.
3. Pricing Metrics Selection
The research can also help determine the right pricing metric for your product. As mentioned in the video: "Do they think is the right pricing metric for them… we had done similar analysis with our customers and we found out that they prefer, they couldn't really do the math for what we thought the right answer would be."
Van Westendorp Pricing Analysis
The video also references the Van Westendorp Price Sensitivity Meter, describing it as a "poor man's Van Westendorp" approach where you ask customers two critical questions:
- "At what price is it going to be so cheap that you think it is not going to be of value to you?"
- "What price is it going to be so expensive that you don't think that is going to be ROI enough?"
This method helps identify the acceptable price range for your product and can reveal significant insights about how customers perceive the value of your offering.
Sample Size and Synthesis
For enterprise-focused research, the presenter recommends conducting between 5-15 customer interviews, depending on the size of your business unit:
"If it's roughly like two to 300 customers, by 10 plus interviews you will have a good idea of what you're hearing."
After completing the interviews, it's crucial to synthesize the information properly:
- Rate customers on their willingness to buy
- Assess budget availability
- Create frequency distributions of preferred features and benefits
- Compare results to your initial hypothesis
Validating Your Value Hypothesis
Perhaps the most valuable outcome of this research is validating (or invalidating) your core value hypothesis. The speaker emphasizes: "That should ideally match your differentiator, that should ideally match the offering what you thought is the most important part of the offering."
If your research reveals a disconnect between what you think is valuable and what customers prioritize, it's a clear signal to reevaluate your pricing strategy and messaging.
Beyond Pricing: Feature Roadmap Prioritization
The methodology extends beyond just pricing decisions. As mentioned in the video, "You can do the same approach on even the feature roadmap… to really sort out what exactly is the most important."
By having customers force-rank upcoming features, product teams can make more informed decisions about development priorities.
Conclusion
Conducting qualitative research with your enterprise customers provides invaluable insights for optimizing your SaaS pricing strategy. By forcing customers to make choices and rank features, benefits, and pricing options, you can validate your hypotheses and build a pricing model that truly reflects what customers value.
As the video concludes, this approach helps bridge the gap between company assumptions and customer reality—a crucial alignment for any SaaS business looking to optimize revenue and drive growth.