Product Launch

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E91: Building ROI Into Your B2B SaaS Pricing Model

Absolute numbers are almost irrelevant when it comes to your customer.

What really matters are relative numbers to what your SaaS product is saving them.

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Episode Transcript
Hey folks, Sean here and today what I want to talk to you about is the fact that absolute numbers are almost irrelevant when it comes to your B2B SaaS. And why I want to talk to you about relativity here is what really matters. Your numbers need to be relative to something, and more importantly, anchor to something.

Otherwise, you’re gonna be missing the right context you need in order to build a effective pricing strategy for your B2B SaaS product. Now, this is all in terms of a concept, which to. Is by far one of the most important and critical success factors for your B2B SaaS, and that’s building ROI and a path to profitability into what it is, what you’re doing, and trying to grow and scale your B2B SaaS product.

But from your customer’s perspective, that return on investment is what really matters for every dollar they invest. How many dollars are they getting back? That’s what I mean when I say return on investment, whatever they’re contributing toward. , whatever they need to pay in order to gain access to your product, what are they getting back in return?

It should be time or money. And time is money. You just need to figure out how much of their time translates to how much money. Now when I say relative numbers are much more important than absolute numbers, that’s because you need the context in order to be able to determine and calculate the return on investment.

For example, if I asked you whether or not $10 is expensive, well, it’s gonna depend. Who I’m speaking about, right? For a working professional with a high paying job? No, probably not For a child, yes. Probably. I mean, I guess it depends on the kid, but still you take my point, right? So the relative numbers on the other hand are where you’re going to be able to build ROI into a pricing strategy for your product.

Now, there’s other factors as well too, but for the sake of this conversation. It depends on how much you’re saving your customer. If you’re saving your customer a hundred dollars, then $10 is gonna look like a solid investment to them, and that’s the relative numbers. But if you’re saving your customer a thousand dollars, a hundred dollars by the same token, is gonna also look very attractive to them.

Both of these instances, there’s a 10X return kind of designed into this experience from a pricing strategy perspective. So that’s what I mean when I say relative numbers. And absolute numbers taken outta context really don’t. So I want you to think about this as you’re figuring out how to design, return, a positive, strong return on investment into the pricing strategy for your B2B SaaS product so that your customer receives the kind of return that they’re looking for for your product to go viral.