What is SaaS Market Pricing Analysis?

Market pricing analysis in SaaS is based on analyzing the prices of competitor products. Adjust your business’s pricing based on factors like whether your value proposition is more unique – meaning you can charge more. If your product is more niche, the same applies. Pricing analysis also takes into account what your user base might be willing to pay.

Other than using online tools, you can follow this typical process: 

1. List rival companies: decide who are your direct and indirect competitors for your company product. 
2. Obtain insights: understand how other businesses are pricing their products, including add-ons, upgrades, discounts and pricing tiers. 
3. Look at differences and similarities: compare your pricing decisions with those of your competitors and consider how your own value proposition justifies your prices, such as a unique feature. 
4. Spot patterns: look at trends that will tell you about future patterns that might affect your SaaS pricing strategy. 

Competitive pricing analysis looks at the pricing of your competitor products more deeply in comparison with yours. You identify your unique selling point, and use this to inform your pricing strategy to create value.

Combine market pricing analysis with other factors when determining the final pricing structure for your SaaS product: 

• What your business can offer: if customers can derive more product value then you can raise your prices above the market. 
• Specific customer details: the budgets and pricing expectations of your own potential customers have an influence on your overall pricing structure and business model.
• Company objectives: business considerations like increasing profit margins or faster market penetration should influence your pricing decisions.

To actually price your SaaS product for the market, go through this process: 

1. Choose a price benchmark: decide what you want to achieve with your pricing, such as appeal to new sign-ups.
2. Work out a budget: work out the cost for your company to build, support, operate, and maintain your SaaS product. 
3. Analyze the market: analyze the market following the steps outlined earlier. 
4. Opt for a pricing strategy: finalize the pricing structure of your software that combines business and customer advantage.
5. Refine your pricing strategy: continually review the market and analyze your own results to determine whether your price needs to change.