For Starters #45: All Pricing Pages are Trailing Indicators
Rule #14: Everything you experience is from the past.
B2B pricing needs to be responsive to the market, which means reviewing them quarterly and against the customers and markets that have come through in the intervening time. The additional coordination cost of publishing pricing when the offering is not fully self-serve only slows down this responsiveness. Updating the pricing page becomes one-more-thing-to-remember to update, so putting ‘call for quote’ is just easier, and allows the vendor to focus on the prospect in front of them.
Which is a long way of saying: Do not base your pricing, packaging, or anything else about your offering off your perceived competitors published pricing pages.
First, they could be, at this exact moment, in the final steps of completely refreshing pricing and packaging (and if they’re my clients they probably are). The published prices are, at best, positioning and segmentation. So, when they make a change, the specific pricing and packaging is less significant than any change in positioning. In other words, what does this change suggest about who they want to their customers to be?
Like the restaurant that doesn’t include decimal points or currency signs on their menus. Or the restaurant that doesn’t have a menu at all. Compared to a fast food restaurant where even menu item ends in a 9.
Second, and even more important, they may not even be a competitor. Sure…in some very mature markets all the players are known by everyone and these have been the same players for decades. Most markets are much more dynamic. There are many markets where the primary competitors are a) spreadsheet, b) nothing at all.
What matters is:
What are your customers currently paying to address this JobToBeDone?
What do they say are their reasonable alternatives?
Where is your offering 10x better on a vector they really care about?
Googling a company doesn’t make them a competitor, they’re only competitor if your target customers are actually considering them.
Matching a competitors pricing isn’t the same as charging what customers are expecting to pay. We don’t know how they arrived at this pricing, they could have been copying you.
The goal here is to stake out your own monopoly, how ever small. To have a unique opinion about the strategic direction of the market not shared by other providers.
Keeping an eye on who else serves your target customer is a good practice, presuming they know more than you about what resonates with your customers - not a good practice. Especially about the inherent attractiveness of any novel new feature only somewhat related to the core value proposition.