THE VALUE & PRICING BLOG
The latest stories, blog articles, and pricing news from the Ibbaka team
Why You Should Use Value Stories Instead of Conjoint Analysis for B2B Pricing
More and more B2B business are using conjoint studies to inform packaging and pricing. But conjoint studies were originally designed for B2C and caution is needed in extending them to B2B. Structured interviews using a value story can provide more actionable insights.
Introducing the New Ibbaka Website: Our Commitment to Pricing and Customer Value Management
Ibbaka's website is now easier to navigate and provides a wealth of valuable information on the company's services and expertise. This fresh update demonstrates Ibbaka's commitment to staying at the forefront of innovation and delivering the best possible user experience to its clients.
Costs come back into SaaS pricing
Historically most SaaS companies have focussed on revenue and not been concerned with margins and costs. This was the result of a revenue growth focus and relatively high margins. With the paradigm shift in SaaS, this has changed, and costs are being factored into models and tested at different scales.
When to price using revenue value drivers, when to price using cost value drivers
In a tough stretch for the tech sector AI, and especially content generation AI, has been getting a lot of love. This is only sustainable if these AIs are creating value and that value can be priced. How can we do this?
How pricing models impact growth rate
Pricing model has a big impact on revenue growth. And as the business environment changes the pricing model should change too. The Maxio Institute has recently published its 2023 Growth Market Report. We look at the lessons this has for pricing design and execution at SaaS companies.
Is it time for SaaS companies to factor costs into pricing?
SaaS companies have typically had high gross margins and have seldom considered costs when designing pricing. Is that still sustainable in the changing economic climate? When designing pricing, test to see how value, price and costs change with scale and make sure that your pricing stays aligned as you grow.
In pricing it is the distribution that matters (averages are not your friend)
Making pricing decisions on average value is a mistake. Always go into the data and look at the distribution. Different distributions (normal, fat tails, skewed, multimodal) suggest different pricing actions.
Is your SaaS business making full use of its pricing power?
Pricing is the most powerful way to improve SaaS business performance. Yet many companies hesitate to act as they lack a process for designing pricing and confidence in the outcomes. Ibbaka gives you the frameworks, insights and tools you need to price with confidence.
Pricing for profit - the paradigm shift in B2B SaaS pricing
There has been a paradigm shift in how investors are thinking about their B2B SaaS portfolio. The changing economic climate and higher interest rates are leading investors to pay more attention to NDR/NRR (net dollar retention or net revenue retention), gross profit and cashflow. This is cascading through to changes in pricing strategy.
Two pricing-packaging responses to platform commodification
Every successful platform eventually sees its core functionality get commoditized. There are two completely different strategic responses: 1. separate new high value functionality from the platform or 2. use the new high value functionality to defend the platform price. Be clear which approach you are taking as one can cancel out the other causing both to fail.
Pricing and sales volume part 2 - mechanics
Given that unit price will change with volume for many products in many markets, how does one design a pricing model that takes this into account. There are several design choices to make. Getting these wrong will suck profit out of your revenue.
How pricing can help fix NDR challenges
Net Dollar Retention (NDR) or Net Revenue Retention (NRR) is a key metric that investors are using to measure the health of their portfolio companies. Pricing and packaging has a big impact on this metric, but not always in the ways one expects. How can pricing help improve NDR?
Four years of Pricing Transformation predictions from Kyle Poyar and Steven Forth
Beginning in 2020, Kyle Poyar from OpenView Ventures and Steven Forth from Ibbaka have been making predictions about how pricing will transform in the coming year. Our predictions for 2023 came out on January 12. Here is a summary of how our predictions have evolved over 4 years.
Pricing and sales volume part 1 - framework
Pricing and sales volume part 1, a general framework for understanding how and why price changes with volume and how to design pricing that responds to this. The design of pricing to volume relationships is a big part of pricing model design. Part 2 will look at the mechanics of different ways to align unit price with sales volume.
Is SaaS price inflation a real thing?
SaaS price inflation began to surface as a meme in late 2022. Early in 2023 it seems to be taking hold as many SaaS companies move to raise prices in response to inflation. This has provoked pushback from some buyers. Is SaaS price inflation a real thing? If so, what does this mean for pricing in 2023?
The design of pricing projects
Over the past few years a set of best practices has evolved in the design of pricing projects. These best practices have emerged from more general approaches to the design of adaptive, data-centric systems and the specific needs of pricing, packaging, revenue generation and monetization. Here are the six steps any major project should have.
How to Approach Increasing Your Prices in Response to Inflation: Mark Stiving and Steven Forth in conversation
Many are debating the implications of inflation for price increases. In this podcast on Mark Stiving’s popular Impact Pricing Podcast Channel Mark and Steven debate how we should respond to inflation and what it means for pricing.
How to price AI
If software is eating the world (Mark Andreessen) than Artificial Intelligence is eating software. AI has come of age and over the past few years we have seen a blossoming of real world applications. There is still a lot of confusion about how to price and monetize this innovation. Ibbaka proposes a general framework for pricing AI.
Core Concepts: Emotional Value Driver
B2B pricing work usually focuses on the economic value, but that is only part of the story. Few B2B sales take place without an emotional commitment from the buyer. Emotion, how buyers and users feel about a solution, are also central to the customer journey and impact subscription renewal. Understanding emotional value drivers is part of B2B pricing.
Which users are you monetizing? Which should you monetize?
Many B2B SaaS companies have multiple types of users,
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