How do you approach competitive intel for pricing?

1. You’ll likely have a shortlist of the competitors you go head to head against. They should always be on your checklist and the folks you look at most closely. We always use them to checkpoint the packaging of new features, study why and how they make the pricing decisions they do, and go as far as to do frequent teardowns of their pricing page and pricing model
2. There are likely companies who you don’t compete with yet but want to. These are more established companies who you’re hoping to be compared to and start competing with. Doing competitive intel on these companies is important when you’re trying to position yourself as a challenger and beat the more established company on price. You often don’t want to price higher than these competitors if they’re very popular and established in the market since probably their brand trust is part of why they’re able to charge that premium
3. Last there are folks that are competitor-adjacent that don’t compete with you or do what your product does, but they are in a similar software category or are related in some way to what your product does. Understanding their pricing models in helpful in thinking about the industry as a whole and where your product fits.

As mentioned before, competitive intel is important to at least understand when thinking about pricing and packaging. You certainly shouldn't price a particular way just because your competitors do but you should always at least understand what the competitive landscape looks like. Here are some resources I've found useful:

• Competitor websites (hopefully you'll be lucky and they'll publish their pricing!). Know that whatever you find here is likely to be higher than actual selling price as it is not usually inclusive of discounts or promotions
• Review websites like G2 and TrustRadius. Often people will comment on the price they pay or paid
• Marketplaces like the Salesforce AppExchange, HubSpot Marketplace, Microsoft AppSource etc. These marketplaces often require vendors to list a "starting" price. Again, this will likely be higher than actual selling price
• Industry analysts like Gartner, Forrester etc. They will be able to talk about average market selling prices and average discounting practices but they won't give you an exact price.
• Independent research/survey firms. If you have the budget you can hire a company for market analysis. Many times these companies have people on contract who are practitioners and may know the market from either working at a vendor or buying from other vendors. This is often very useful but costly.
• Your existing customers or prospects. If you have a customer community you can leverage, don't be afraid to ask. Your happy customers are often willing to give you their opinion on pricing and packaging both of your own products or any competitive products they may have experience will
• Your existing partners. If you work with implementation or resell partners, often they will have knowledge of market pricing. Like the industry analysts, they may be unwilling to give you exact prices but could advise on the market or give suggestions on packaging.
• Your sales team. Maybe someone worked for a competitor or knows the general market. Or at the very least, your sales team will know how prospects and customers have reacted to pricing in the past

Competitive Pricing Intelligence is tricky because that information is often confidential so you cannot just go ask a customer or a partner for it. However, it's natural to come across it and there are some ways I've found to go find it.

1. Talk to your sellers. Customers (existing and prospective) will often share pricing of alternatives in regular conversation as they negotiate a deal -- you may not always get specifics, but if you get enough ballpark estimates you can get a pretty good sense of where you competitor is coming in.

2. Forums and review sites are your friend. Sometimes google can find pricing for you, but I have had better luck searching within review sites (G2, TrustRadius, etc.) or small business / startup forums. This won't get you enterprise pricing -- you'll have to rely on #1 for that.

Below are few important exercises to consider when first standing up a competitive intelligence program for pricing:

1. Identify Key Competitors: Start by identifying your main competitors in the market. Understand their positioning, target markets, and the products or services they offer that compete directly with yours.

2. Pricing Models: Analyze your competitors' pricing models. Determine whether they use flat-rate pricing, usage-based pricing, tiered pricing, or other pricing structures.

   • Understand the rationale behind their pricing models.

   • Evaluate where their pricing stands relative to one another, as well as how yours' compares.

   • Analyze your competitors' bundling, cross-selling, or upselling strategies.

3. Compare Features and Value: Compare the features and value proposition of your product or service with those of your competitors. Identify areas where your offering provides unique value that justifies a premium price or areas where you may need to adjust pricing to remain competitive.

4. Benchmarking: Conduct pricing benchmarking exercises to compare your prices with those of competitors. Identify areas where you may be pricing too high or too low relative to the competition.

In addition to the items listed above which can be refreshed on an annual or bi-annual basis, these are some things to track more regularly when it comes to competitive pricing:

1. Pricing Changes: Regularly monitor your competitors' pricing changes. This can include tracking list prices, discounts, promotions, and any adjustments in pricing strategy over time.

2. Market Trends: Stay informed about market trends, economic conditions, industry regulations, and other external factors that may impact your competitors' pricing decisions. Understand the broader context in which pricing strategies are formulated.

3. Competitive War-Gaming: Scenario plan various changes in competitor pricing and the impacts that those would have on your business. Determine what mitigation efforts you would take to most favorably position yourself in the market and limit the downside potential.

4. Intelligence Tools: Consider using competitive intelligence tools or software that can automate the process of monitoring competitors' pricing changes, tracking market data, and providing insights into pricing trends. This can speed up the process and limit the amount of manual effort.

Competitive intel for pricing will vary based on the type of industry you're in, as well as the go-to-market motion. 

If you're competing in sales-led go-to-market motion and Enterprise market, it will be significantly more difficult to gather intel on pricing as it won't be easily located on your competitor's website. A great place to start would be to listen in on your demo and sales calls. What are prospects telling you about your competitors? When you share your pricing with them, how do they respond? Do the mention you're higher or lower than a competitor. Don't be afraid to have your sales team dig into this a bit more.

If you're competing in a product-led go-to-market motion and self-serve market, this task will be much simpler. Many, if not all, of your competitors will have their pricing listed publically online. I always recommend that when you complete a pricing comparison, you consider more than just price point. What's their value metric (ie. how are they scaling plans)? Is there a combo value metric + feature differentiation? How does service scale as you ascend?

To monitor competitor pricing, I also put alerts on all of my competitors' pricing pages using my team's competitive enablement tool, Klue. This will alert us immediately if anything changes on the page.