Josh Melick – Highlighting the Mistakes Which SaaS Providers Make With Their Pricing Structure

Recently there has been a fantastic blog post written by the brilliant Josh Melick, regarding the common mistakes which many companies are making with regards to their pricing structure. Josh is not only an expert when it comes to software development companies, but also regarding business and sales, which places him perfectly to offer these insights.

If you are yet to read this post, we have rounded up some of the key information which he discusses, and we can describe here what Josh is getting at and what exactly companies are doing wrong when it comes to boosting their revenue. the key element here is the pricing structure, so let’s take a look where so many are going wrong.

All Inclusive Options

Surprisingly there are still a number of companies who are only focusing on one-time sales to their customers. This means that a customer can buy a software suite for $100 today, and rely on regular updates. In 3 years time that software could be worth $175 and yet the company sold it for far less the first time around. This also means that the company loses the right to upsell to the customer in the future, unless it just stops the upgrades. If upgrades are stopped however, it means that the customer will look to the business in a and light, and then look elsewhere.

Two Dimensional

The core of the blog post which Josh has written focusses on the need for a three dimensional sales approach. The mistake which many will make is only looking at two dimensions with regards to the packages which they have created. When the bronze, silver and gold package are created at the moment, too many companies focus on the amount of users the customer is allowed, and the amount of usage. What Josh talks about however is the importance of adding the critical third dimension which will give the business so many possibilities when it comes to upselling and when it comes to customer satisfaction.

Failing To Cover Core Costs

The whole point of adding a third dimension here, the dimension of time, is that you can use this to ensure that the cost of the package continues to bring in revenue which will both cover costs and maintain a profit percentage. If this doesn’t happen then you will end up charging the same as before, yet with rising costs. Given the range of costs which go into software developing, it is critical that businesses are focused on ensuring that the prices they charge fall in line with the costs which they face.

These are the key errors which so many companies are making with regards to sales, at least in the eyes of the expert Josh Melick. This is exactly why it is so important that businesses pay attention to the likes of Josh, and fix any of these mistakes before they cost any more money.

What is your reaction?

In Love
Not Sure

You may also like

Comments are closed.

More in:Tech