Software & Technology

The software and tech industry are rapidly changing, and highly competitive with its low barriers to entry. Revenue Management Labs considers all critical levers when developing pricing strategies that extract value and ensure the long-term success of our software and tech partners, including price optimization, customer segmentation, loyalty and retention, subscription sales, etc.


Unique Pricing Challenges in the Software Industry

  • High margin, focus on growing sales
  • Wide breadth of buyers with unique needs
  • Difficult to identify alternatives and assess the value

Revenue Growth Opportunities in the Software Industry

  • Optimizing monetization models and offer packaging strategy
  • New product launch strategy
  • Value-based customer segmentation


Software Pricing Strategies

Pricing in the software industry is constantly changing as the industry develops and fluctuates. Revenue Management Labs considers all critical factors — such as customer retention, price optimization and subscription sales — when developing financial plans. We ensure your long-term success by strategically planning your product's value.

Whether you're a startup or an established company, financial planning can increase your return on investment (ROI) and help you achieve your financial goals. Our software pricing models and pricing strategies can help your company become proficient in financial planning.


Why You Should Evaluate Your Software Pricing Strategies?

Finding the balance between pricing and revenue can help you achieve more with your business. Your goal should center on earning a steady profit while helping your customers.

There are two pitfalls your software company could experience without pricing solutions:

  1. Undercharging: If you undervalue your service, you may struggle with development and basic costs like delivery fees.
  2. Overcharging: If you charge too much, you could drive away many potential customers and harm your growth.


When running a successful software or SaaS business, consider the following to help you create benchmarks for your financial plan:

  • Focus on growing sales
  • Address a wide breadth of buyers with unique needs
  • Optimize monetization and packaging models
  • Create value-based customer segmentation


Revenue Management Labs can help you achieve your goals through the creation of custom pricing strategies.


Different Software Pricing Models and Strategies

A pricing model includes the fees, controlling and discounting when distributing a product or service. A software or SaaS pricing strategy links the usage rights from the customer with the distribution costs.

To have an effective strategy, you must have a data-driven analysis of common market strategies coupled with an understanding of your product or service:

  • Cost-based pricing: Cost-based pricing evaluates the cost to create a product or service and uses that amount as the basis for profit. This straightforward method means you increase your prices to account for your operation costs and profit. This method does not take market competition or other flexible factors into account.
  • Value-based pricing: Value-based pricing encourages businesses to look at their price as a reflection of the value of their service. Consider quantitative and qualitative elements to determine an accurate price for your product.
  • Penetration pricing: Penetration pricing involves dropping prices substantially in the short term but making a larger profit by upselling or cross-selling other products.
  • Captive pricing: Captive pricing is where you offer a core product at a lower price, and then you charge extra for additional products related to the core product. These other products help the user get the most out of the core product.


Software Pricing Solutions From Revenue Management Labs

At Revenue Management Labs, we strive to help every client become self-sufficient in revenue management. We create custom solutions for each client and work with you to plan and fulfill your revenue goals. We go beyond planning and give you all the tools you need to implement our strategies successfully, such as a clear execution plan and team training.

We can help create a custom pricing plan for your business to increase your return on investment and provide more to your customers. Complete our online contact form for a free consultation. Contact us today to learn more about how we can improve your finances.