This article comes from Zak Virdi’s talk, ‘Going global: Product strategy and pricing for hypergrowth in new markets’, at our 2023 SaaS Metrics Summit, check out his full presentation here.
Ever wonder how some SaaS startups manage to rapidly dominate global markets while others struggle to gaintraction?
Well, let me let you in on a little secret.
Growth hacking through viral loops and referral programs isn’t enough anymore in today’s crowded space. To scale abroad, you need to become pricing chameleons.
In this article, I'd like to share my insights on the product, pricing, and partnership strategies that have fueled our hypergrowth, and provide actionable tips to fellow SaaS entrepreneurs looking to scale globally.
Ready to unlock the secrets to success?
Our SaaS offering
We founded Xensam back in 2017 as one of the first pure SaaS vendors using the cloud to totally transform how organizations manage their software licenses.
Our tech normalizes license data no matter where apps are deployed - on-prem, cloud, you name it!
As a bootstrapped business relying only on our early customers, we knew getting pricing right was critical from day one. We emphasized simple, transparent pricing so customers clearly saw the value at each tier.
We also built win-win margin models to incentivize channel partners to co-sell our solution. Their localized expertise helps us navigate complex regulatory and technical landscapes abroad faster.
Read on as I share how we crafted flexible pricing frameworks and strategic partnerships to accelerate worldwide.
Designing flexible pricing models
When initially structuring our pricing models, we considered a range of options like:
1. Usage-based: Pay per actual use.
2. Tiered feature bundles: Group capabilities by user types.
3. Flat rate: Single pricing option.
After extensive testing, we found the tiered bundle model aligned well with providing clear value-based tiers while letting us upsell.
The most advanced approach is value-based pricing - essentially pricing your software based directly on the value customers receive from using it. This is highly complex to model but so worth it in the end!
No matter what pricing models you start with or evolve to over time, some key considerations should always guide your strategy:
How does the customer perceive value inyour product?
What are competitor products priced at?
What are your customer acquisition costs?
What is your target profit margin?
Now let’s explore how to tailor pricing across borders …