Hi Product people,

How do you create a pricing strategy that captures value while also giving your product a competitive edge?

This week on Product Thinking, I had the pleasure of speaking with Dan Balcauski, founder of Product Tranquility, about the art and science of pricing in the B2B SaaS world. Dan shared insights on transforming pricing from an overlooked aspect to a strategic advantage.

"Most companies obsess over building fancy products and acquiring customers but neglect how they capture value. Pricing should not be an afterthought; it needs to be strategically aligned with both customer needs and market dynamics."

Dan's journey from software engineering to pricing expert is a testament to the impact strategic pricing can have on a company’s success. We discussed the importance of understanding customer segments, the value they derive from your product, and how to align pricing models with this understanding.

Have you had any pricing challenges at your company? How did you overcome them? Reply here or join the discussion on my last LinkedIn post!

🎧 Listen to the full episode here: Apple | Spotify

Looking forward to hearing from you!

See you soon,

Melissa Perri

Founder Product Institute, Board Member, and Teacher

You’ll hear us talk about:

06:38 - The Journey to Pricing Expertise

Dan shares his transition from software engineering into the pricing world. He highlights that companies often neglect how they capture value, resulting in rushed pricing decisions despite the significant impact pricing can have on a company’s success.

15:03 - The Mechanics of Pricing and Packaging

Explore the four elements critical to pricing in B2B SaaS: price metric, price model, offer configurations, and price fences. Dan uses the McDonald's menu as a relatable example to illustrate how these elements play out in the real world.

39:18 - Lessons for Long-Term Pricing Success

Dan advises treating pricing as a process that evolves with market changes, noting the importance of governance, continuous improvement, and alignment with customer value and business strategy.

Episode resources:

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