Pricing Strategy Software

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.