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Stax Helped a Software Solutions Provider Identify an Optimal Pricing Structure Across Different Product Bundles
THE SITUATION
- A Corporate Client sought our assistance to understand the optimal pricing structure for different product bundles they offer.
- The key objectives were to validate the feasibility of transitioning their product sales—from a perpetual license model to a subscription based model, as well as to gain perspective on a role-based pricing structure so as to supply users with an appropriate set of features/modules while maximizing revenue per customer.
THE ASSIGNMENT
- Conjoint analysis—to identify preferences for feature bundles using trade-off scenarios.
- Van Westendorp price sensitivity meter—to discover price points for a role-based pricing strategy.
- Data collection—web survey which included a sample of firmwide and function specific IT decision makers and influencers across different contractor types and company size verticals, as well as existing customers and prospects.
THE BENEFITS
- The Client identified new product and pricing configurations to gain profitability, as well as to capture share from dissatisfied prospects seeking upgrades.
THE FINDING
- Our research revealed that perpetual license structures were widely used. However, subscription based licensing was emerging at the time, along with the preference for role-based licensing.
- The conjoint analysis revealed that a majority of decision makers were looking for a fully integrated solution with added features.
- Our research also revealed that the Client maintained a significantly higher net promoter score compared to major competitors, with flexibility and customization being its key points of differentiation.
- Additionally, through the price sensitivity test, we were able to determine role-based pricing for different users and discover additional ways to generate value from different offerings.
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