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Breaking Free from Freemium // Product Chats Podcast

On a recent episode of the Product Chats Podcast, I joined host Rebecca Kalogeris to discuss the specifics of SaaS pricing. We touched on customer value perception and the challenges businesses often face in their pricing approaches. I brought up key factors in pricing decisions, pinpointed common pitfalls, and highlighted the crucial role that Product Managers play in developing effective pricing strategies.

Key topics we covered in this episode:

  • Importance of willingness to pay in determining pricing.
  • Focus on exchange value, not just use value of a product/service.
  • The Freemium trap
  • Introduction to the jobs-to-be-done framework.
  • Importance of understanding customers’ desired outcomes
Don’t Use a Freemium Pricing Strategy and Other Lessons with Dan Balcauski

Timestamped Outline

09:36 Four pricing challenges: unclear customer profile, lack of customer value understanding, unclear differentiation, and underappreciation of pricing decisions.
12:37 Intelligent price management starts with value management.
20:32 Customer segmentation: firmographics or job-based approach?
23:23 Land grab strategy rarely leads to profitability.
34:08 Price metrics should align with product value.
37:06 Pricing owner, committee, policies, and small changes.

Potent Quotables

The Price of Beer:

“It depends on where I’m at. The beer at the grocery store is a very different price than the really expensive beer at the ballpark.”
— Dan Balcauski

Understanding Customer Segments and Value Differentiation:

“We talked a little bit about segments. The most important thing is who you are selling to and understanding that. We want to break this up into segments because they will have different willingness to play because they have different values.”
— Dan Balcauski
The Importance of Regularly Evaluating Existing Pricing:

“You don’t just price it once and forget it.”
— Dan Balcauski

Want more B2B SaaS pricing and packaging insights? Follow Dan on LinkedIn and Twitter.