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The Psychology of Pricing // Cash & Burn Podcast

In an episode of Cash & Burn, I join host Brandon Metcalf to tackle the influential world of pricing and packaging strategies. We navigate through the significant impact these decisions have on a company’s approach to the market, highlighting the risks of misaligned pricing that can lead to increased acquisition costs and revenue loss. We also take apart the myths around value-based pricing, revealing that appropriate pricing could sometimes mean lowering prices to better capture certain market segments.

Our conversation also touches on the importance of pricing as a strategic tool for business growth, considering the evolving challenges of AI integration into pricing models. We emphasize the importance of understanding customer-perceived value and the need for regular strategy reassessments in light of market changes and competition.

Key topics we covered in this episode:

  • Pricing as a powerful lever for business growth
  • Constant adaptation of pricing strategies to market changes and macroeconomic factors
  • Pricing and packaging exercises and mistakes
  • Four major challenges in pricing
The Psychology of Pricing W/ Dan Balcauski

Timestamped Outline

09:17 Timing of pricing discussion crucial for success.
12:22 SaaS pricing model: services, strategy, competition, value.
17:44 Pricing strategy: essential for SaaS business growth.
23:23 Pricing and packaging impact go-to-market success.
26:47 Pricing challenges and anchoring in decision-making.

Potent Quotables

Myths in SaaS Pricing:

“You don’t have a choice of whether you will have a pricing conversation with your customer. The only decision you get to make is when you will have this conversation.”
— Dan Balcauski
Understanding Value in SaaS Pricing:

“Value and price are so tightly interlinked that we need to be precise about value. Otherwise, we can’t have a workable conversation.”
— Dan Balcauski
The Importance of Agile Pricing Strategies:

“There’s no one magic number of how often we should update our pricing.”
— Dan Balcauski

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