Pricing is one of the most important financial levers that companies have at their disposal to influence the financial success of their business. However, it is not an easy task.
As Tayfun Uslu, Finance Expert at Toptal states, firstly, pricing affects multiple stakeholders, both inside and outside the company. “Experimenting with pricing is therefore not a task that should be taken lightly. Secondly, finding the right price is notoriously hard. Customer preferences are hard to gauge ex-ante, and internally, it can be difficult to foresee the effects of pricing changes on the financial performance of a company. And finally, of course, pricing doesn’t happen in a vacuum. In any competitive market, pricing changes can often lead to retaliatory actions which end up canceling out the intended effect of the pricing adjustment.”
With this in mind, techniques and methods for getting around these challenges, such as Software as a Service (SaaS) are extremely useful. In his experience, “the SaaS business model and its delivery mechanism have important ramifications related to pricing which, in turn, can be extremely useful in the financial management of your company” and, amongst other things, very pricing-friendly. Reason why he believes the shift to SaaS from On-Premises software is likely to continue at a steady pace.
To know more about the ramifications and benefits of SaaS, visit Toptal.