THE VALUE & PRICING BLOG

The latest stories, blog articles, and pricing news from the Ibbaka team

Steven Forth Steven Forth

Will pricing for profit lead to higher SaaS prices?

What will SaaS prices for over the rest of 2023? In Q1 many companies raised prices. The general consensus is that these price increases will continue. Ibbaka thinks SaaS price changes will diverge. Only companies with differentiated value in certain categories will be able to push through price changes.

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Steven Forth Steven Forth

Trends in SaaS pricing from Q2 2023

What will SaaS prices for over the rest of 2023? In Q1 many companies raised prices. The general consensus is that these price increases will continue. Ibbaka thinks SaaS price changes will diverge. Only companies with differentiated value in certain categories will be able to push through price changes.

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Steven Forth Steven Forth

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.

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Steven Forth Steven Forth

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.

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Steven Forth Steven Forth

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.

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Steven Forth Steven Forth

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.

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Steven Forth Steven Forth

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.

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Steven Forth Steven Forth

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.

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Steven Forth Steven Forth

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.

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Steven Forth Steven Forth

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?

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Steven Forth Steven Forth

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.

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Steven Forth Steven Forth

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?

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Steven Forth Steven Forth

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.

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Steven Forth Steven Forth

How Ibbaka will support pricing optimization in 2023

2023 will be an interesting year in the pricing and customer value space. The first half of the year will be dominated by inflation, higher interest rates and the threat of a recession. The second half of the year will depend on how deep the recession is and how we all respond. Ibbaka provides a software platform and services that enable price optimization.

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Steven Forth Steven Forth

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.

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