How we price our products is fundamental to our revenue goals. As a result our pricing model is incredibly important.
Whether it’s taking a new product to market or repackaging existing offerings, we must consider customer value, competitor offerings, and our own cost structure when developing our pricing strategies.
Finding the sweet spot of maximizing profits and meeting customer needs takes work. Marketers must keep a pulse on customer feedback and market trends to understand changing needs and where customers place the most value.
Traditionally, this has meant combing through win/loss notes to understand why a competitor’s offering was perceived as more valuable. Or we conduct market research to better understand perceptions about our products being “too expensive.”
These processes are costly and time intensive.
SaaS marketers need a better way to incorporate feedback into their pricing model.
LoopVOC exists to centralize customer feedback in real time so that all teams have the opportunity to listen, understand, and respond based on the greatest risks and opportunities to your business.
Perhaps you’ve identified a problem with declining sales and retention, or you want to proactively ensure that your pricing strategy is competitive and tied to customer value.
Your first step is to aggregate feedback from the places your customers are already sharing feedback about your company or products. Below, we share examples of places to begin monitoring.
One of the best (and growing) channels for B2B customer feedback is online review sites. Customers are regularly sharing feedback about pricing and product features that are critical for marketers to pay attention to. Feedback shared on these channels will also give you insight into where customers place the most value.
Additional Public Channels to monitor:
Qualitative NPS feedback is another critical channel for feedback.
In addition to asking customers whether or not they’re likely to recommend your company or product, ask them about the product features most important to them. Understanding the feedback driving the Net Promoter Score, and where customers are finding the most value in your products, will guide your pricing strategies and help you build packages your customers want.
Additional Internal Feedback Channels:
Once you’ve identified your feedback channels, you’ll want to connect this feedback in Loop. This step is easy, but it’s the most important step of all.
Using natural language processing, Loop extracts meaningful insights from customer feedback, so that company leaders can proactively identify issues impacting revenue, and pivot company initiatives to address them.
Your feedback data is what makes it possible for Loop to run its magic and extract real-time insights.
Once your feedback has been connected in Loop, the next step is to identify any feedback trends related to your pricing strategy: price point, price metric, and packaging.
Step 1: Review the topics related to pricing, and identify those with a high amount of negative feedback.
In this example, we can see that feedback related to pricing is primarily negative.
Oftentimes when people mention pricing being too expensive, they’re often talking about the overall value they’re receiving. So, it is very common for feedback about price point to correlate with packaging, price metric, and even features that customers may perceive to be over-priced for the value they provide.
Drilling into the pricing model topic can help us identify the root cause of the issue.
Our next step will be to dig deeper into the feedback to understand how long feedback related to price point has been trending negative.
Step 2: Understand if the identified feedback trend is getting better or worse over time.
It’s clear from the 12 month rolling view that feedback related to price point has been trending negatively over time, indicating that there are pricing issues that need to be addressed. There could be some price-sensitivity in the market or customers feel that the product features provided warrant a lower price.
Step 3: Identify the problem
Next, we drill into the verbatim feedback related to price point to understand the common issues coming up in customers’ feedback.
We recommend digging specifically into mentions of the following:
Rather than immediately dismissing the problem as a non-issue or jumping into action, we advise customers to do a bit more research to gather context and perspective.
Understanding how this customer feedback compares to competitor feedback will help you understand both the risk and opportunities this feedback represents to your business.
Step 1. Connect competitor feedback in Loop
Start by identifying comparable and aspirational companies in your industry, whether they are directly competing with you now or could be in the future. You can leverage online review sites like G2 Crowd and Capterra to see what companies the market is comparing you to today.
There are multiple ways to access the Competitive Benchmarking dashboard feature:
Adding competitors to your dashboard will provide you with real-time updates on their customer feedback, giving you a more comprehensive view into what is and is not working for them.
Step 2. Compare negative feedback trends to competitors
Now that your competitor feedback has been added, you can benchmark your pricing feedback trends to competitors.
This will help you understand if competitors’ customers are expressing similar sentiment related to pricing. You’ll then want to dig into how your price point compares to competitors’ and what features are included in their offers.
Comparing to Competitors:
First, we can see that feedback related to pricing is trending negative across the space. This signals that there are likely common frustrations experienced across each customer base, marking an opportunity for your company to differentiate itself in the market with updated pricing.
We also see that feedback related to Price Point is trending less negative than Competitor B and more negative than Competitor F.
We recommend digging into the pricing models of Competitor F as well as the verbatim feedback to understand what is working for their customers and where you can refine your pricing strategy.
Step 3. Make decision on taking action
From digging into the customer feedback data, we now know the following:
Our next step is to decide whether or not the feedback trends warrant action. Do this by weighing the risks of inaction:
The best step forward is to address pricing concerns by creating Actions.
As you begin to put plans in place to address pricing issues, it will be important to understand the root cause of the feedback, internal or external factors, and any steps that have been taken previously.
Taking action will require cross-team collaboration to ensure that there is alignment on the need and owners for each action.
Step 1: Identify potential root cause and past initiatives
Work with cross-functional partners to identify contributing factors and understand if past actions have had an impact on the feedback trends.
Events that could be driving negative feedback about your price point:
Ongoing issues that could be driving negative feedback about your price point:
Understanding the root cause of customers’ pricing concerns is critical to charting a path forward to address the issue. Conversely, perhaps the issue was known—sales or retention rates were declining—but the reason for performance dips was not. In this case, customer feedback trends are the proof points needed to align teams on why and how to address the problem.
Once the root cause or past initiatives have been identified, create retroactive actions to mark the specific events contributing to the feedback trends.
Continuing our example, let’s assume the following:
We will want to create “past Actions” to chart the factors contributing to the declining sentiment over time. Then, we will create Actions to track the impact of new initiatives.
Step 2: Create initiatives to address the issue
Once you’ve identified the root cause of the issue and aligned stakeholders on the importance of addressing it, you’ll create specific action plans.
Here are example actions that may be taken to address negative feedback about your price point:
Continuing with our example, we know that new sales reps are not effectively trained. To address this, we recommend rolling out new sales enablement trainings to help reps with value-based and ROI positioning.
After you align on actions to be taken, create actions in Loop and assign owners for visibility. In this case, we’ve created the action for value-based selling to ensure that reps are prepared to position conversations based on the value to customers, not the cost.
Step 3: Track the action to understand if it solves the issue over time
The final step is to measure the impact of your actions over time to ensure that you’re driving the intended outcome.
Set up regular cross-functional team meetings to review actions and progress to goals (ensure that there are area-specific metrics you’re measuring against like customer retention and new logos).
You should focus your meetings on answering whether existing actions are solving the problem or whether additional action needed.
Continuously monitor customer feedback to inform your Start/Stop/Continue plan:
The key to using Loop to improve revenue and retention is following the four steps outlined above: listen for feedback, identify and understand trends, benchmark to understand risk and opportunities, and then adapt strategies to respond.
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