CINXE.COM
Understand & Master Your Pricing Strategy for Maximum Success
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.privacy-notice-link{color:var(--pd-cb__color--black)!important}#onetrust-consent-sdk #onetrust-pc-sdk .ot-pc-footer .ot-btn-container{width:100%;flex-direction:column-reverse;justify-content:flex-end;margin:0;padding:10px;display:flex}#onetrust-consent-sdk #onetrust-pc-sdk .ot-pc-footer .ot-btn-container *{margin:10px 0;display:inline-flex}@media (min-width:600px){#onetrust-consent-sdk #onetrust-pc-sdk .ot-pc-footer .ot-btn-container{flex-direction:row}#onetrust-consent-sdk #onetrust-pc-sdk .ot-pc-footer .ot-btn-container *{margin:10px}}#onetrust-consent-sdk #onetrust-pc-sdk .ot-btn-container button{letter-spacing:normal}#onetrust-consent-sdk .save-preference-btn-handler{justify-content:center}</style><style data-style-id="pd-inline">:root { --iti-hover-color: rgba(0, 0, 0, 0.05); --iti-border-color: #ccc; --iti-dialcode-color: #999; --iti-dropdown-bg: white; --iti-spacer-horizontal: 8px; --iti-flag-height: 12px; --iti-flag-width: 16px; --iti-border-width: 1px; --iti-arrow-height: 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datetime="2024-11-08T15:51:23+00:00"> November 8, 2024 </time> <span class="meta__item color-meta"> 8 min </span> </p> </div> </footer> </div> <div class="post-hero__authors"> <div class="authors"> <div class="authors__container align-left"> <div class="authors__row"> <p class="authors__heading mb-10">Author:</p> <a href="https://www.pandadoc.com/blog/author/anthony-esposito/" class="author align-start"> <img width="40" height="40" src="https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/945B3461-1-150x150.jpg" class="author__avatar attachment-40x40 size-40x40" alt="Anthony Esposito" decoding="async" loading="lazy" /> <p class="author__data"> <span class="author__name text-body-s text-bold color-black"> Anthony Esposito </span> <span class="author__position text-body-s color-meta"> Senior Account Manager at PandaDoc </span> </p> </a> </div> <div class="authors__row"> <p class="authors__heading mb-10">Reviewed by:</p> <a 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class="block-toc__link">What is CPQ?</a> </li> <li class="block-toc__item" data-toc-item> <a href="#Different-pricing-strategies-1" data-toc-link data-target="Different-pricing-strategies-1" class="block-toc__link">Different pricing strategies</a> </li> <li class="block-toc__item" data-toc-item> <a href="#Mastering-your-pricing-strategy-2" data-toc-link data-target="Mastering-your-pricing-strategy-2" class="block-toc__link">Mastering your pricing strategy</a> </li> <li class="block-toc__item" data-toc-item> <a href="#strongPricing-strategy-case-studiesstrong-3" data-toc-link data-target="strongPricing-strategy-case-studiesstrong-3" class="block-toc__link">Pricing strategy case studies</a> </li> <li class="block-toc__item" data-toc-item> <a href="#CPQ-and-pricing-tools-4" data-toc-link data-target="CPQ-and-pricing-tools-4" class="block-toc__link">CPQ and pricing tools</a> </li> </ol> </div> </div> <a href="https://signup.pandadoc.com/?ss=post-pricing-strategy-56964&lng=en-US" class="ui-button w-100 mt-30 hide-mobile-tablets" data-toc-button="" > Try PandaDoc </a> </div> </aside> <section class="post-content__main" data-post-content> <div class="typo"> <p>What’s the first thing you look at when you’re torn between two comparable products? </p> <p>Well, if you’re anything like me, it’s pricing. Also known as price skimming. Ok, not just me. </p> <p>A 2022 survey reported that upwards of 80% of buyers<sup data-fn="ecc3412d-038c-41a5-87b7-2b5b5fb7169e" class="fn"><a id="ecc3412d-038c-41a5-87b7-2b5b5fb7169e-link" href="#ecc3412d-038c-41a5-87b7-2b5b5fb7169e">1</a></sup> assess competitor prices before deciding to purchase.</p> <p>As the business, your pricing strategy needs to be competitive and adaptable to shifting markets. </p> <p>Fortunately, <strong>CPQ (Configure, Price, Quote)</strong> is a tool that can process data and cut down on admin and guesswork to help you know your ideal price point.</p> <p>Before we dig a little deeper into mastering your pricing strategy, let’s discuss what CPQ is and how it can help when it comes to setting prices.</p> <h2 class="wp-block-heading" id="What-is-CPQ-0">What is CPQ?</h2> <p><a href="https://www.pandadoc.com/blog/what-is-cpq-configure-price-quote-and-why-use-cpq/">Configure, Price, Quote</a> software is a system that allows businesses to configure pricing products on a complex level, in addition to generating quotes. </p> <p>Sales teams are able to easily peek at consumer data to adjust pricing as needed.</p> <p>The automation features built into CPQ also significantly cut down on time spent in administrative tasks. </p> <p>That way, stakeholders can focus on big picture items like pricing strategy and tactics.</p> <p>HAAS Alert reported saving over 120 hours of admin work each month, which led to a <a href="https://www.pandadoc.com/customers-case-study/haas-alert/">66.67% increase in efficiency</a> by utilizing PandaDoc CPQ for HubSpot.</p> <p></p> <div class=" mb-40" data-pd-block="ui-banner-brand"> <aside class="banner-brand banner-brand--narrow bg-color-pastel-amethyst"> <div class="banner-brand__content"> <h3 class=" h4 banner-brand__title mb-05em "> Stop wasting valuable hours and energy on admin tasks </h3> <p class="banner-brand__tagline text-body-l mb-30"> Reduce the risk of human-error and up your efficiency with PandaDoc. </p> <a href="https://www.pandadoc.com/getdemo/?ss=pricing-strategy_pricing-strategy_ui-banner-brand_56964" class="ui-button"> Request a demo </a> </div> <div class="banner-brand__cover"> <picture class="__migration image-block"> <img decoding="async" src="https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/demo-tour-thatch@2x-334x248.png" srcset="https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/demo-tour-thatch%402x-334x248.png 1x, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/demo-tour-thatch%402x.png 1.5x" width="334" alt="Demo Tour Thatch"> </picture> </div> </aside> </div> <p><strong>Bonus</strong>: We recently launched PandaDoc CPQ for HubSpot to help you improve the buying experience and streamline consistency with pricing.</p> <p>Now you can create accurate quotes for complex products & services with ease. Learn more <a href="https://www.pandadoc.com/blog/cpq-for-hubspot/">here</a>.</p> <h2 class="wp-block-heading" id="Different-pricing-strategies-1">Different pricing strategies</h2> <figure class="wp-block-image size-large"><img fetchpriority="high" decoding="async" width="1024" height="568" src="https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-1024x568.png" alt="things to consider for pricing strategy" class="wp-image-56965" srcset="https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-1024x568.png 1024w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-300x166.png 300w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-768x426.png 768w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-1536x852.png 1536w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-550x305.png 550w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-334x185.png 334w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-668x370.png 668w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-314x174.png 314w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-628x348.png 628w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-360x200.png 360w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-720x399.png 720w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-460x255.png 460w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-920x510.png 920w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-1100x610.png 1100w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-490x272.png 490w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-980x543.png 980w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-705x391.png 705w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-1410x782.png 1410w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-225x125.png 225w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-451x250.png 451w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-162x90.png 162w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-325x180.png 325w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-721x400.png 721w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-1443x800.png 1443w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-126x70.png 126w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1-252x140.png 252w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_1.png 1760w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure> <p>Pricing isn’t about blindly throwing a dart at a board and choosing whatever number you land on. </p> <p>There’s a few common pricing strategies with intentional tactics behind them. </p> <p>What best applies to your marketing strategy comes down to what you’re selling and your<a href="https://www.pandadoc.com/blog/ideal-customer-profiles/"> ideal customer</a>.</p> <p>Let’s go over some of the most common pricing models, along with their pros and cons. </p> <p>What is the best pricing strategy for you? </p> <p>Let’s go over some pricing strategy examples, as only you can decide on your pricing method of choice.</p> <h3 class="wp-block-heading">Cost-plus pricing</h3> <p><a href="https://www.pandadoc.com/blog/cost-plus-contracts/">Cost-plus pricing model</a> is as basic as it sounds. Take the cost of your product, and mark it up.</p> <p><strong>Pro:</strong> Easy, simple way to create pricing and margin profits.</p> <p><strong>Con:</strong> Not strategic. Doesn’t take into account competitor pricing or a customer’s willingness to pay (WTP). </p> <p>This is particularly a disadvantage in the SaaS industry, where a value-based approach resonates best with targeted consumers when it comes to the bottom line.</p> <h3 class="wp-block-heading">Competitor-based pricing</h3> <p>Competitor-based pricing is, yep, you guessed it, pricing based on your competitors. </p> <p>Whether it’s having a lower price to edge out the competition, or a higher price to convey perceived value, this competitive pricing strategy can be hit or miss.</p> <p><strong>Pro: </strong>Watching your competitors helps you stay within market range and adjust to changes as needed.</p> <p><strong>Con:</strong> If this is your sole focus, you risk losing sight of a value-based approach and may lose revenue and customers with too many fluctuations.</p> <h3 class="wp-block-heading">Value-based pricing</h3> <p>This one is a bit more ambiguous, but with the right data can be a highly effective approach. </p> <p>Industries like SaaS are value-based, and need to position themselves as such to stand out from the crowd. </p> <p>Also known as the premium pricing strategy.<br><em>Ahem</em> speaking of, you are reading a PandaDoc blog, did you know we offer a<a href="https://signup.pandadoc.com/?lng=en-US"> free 14-day trial?</a></p> <p><strong>Pro:</strong> Most effective for maximizing revenue with the WTP approach.</p> <p><strong>Con: </strong>Diligent research and a constant ear to the ground are required to stay on top of things and remain in-tune with consumer reviews.</p> <h3 class="wp-block-heading">Penetration pricing strategy</h3> <p>This strategy is often utilized by those moving fast. It’s the tactic of setting a low initial price to attract customers and get their foot in the bigger market with the intent to gradually raise prices later.</p> <p><strong>Pro:</strong> Helpful when coming into a saturated market, as consumers will be more likely to give you a try if your price is exceptionally lower than the competition. </p> <p>When done right, this can be a highly effective pricing strategy.</p> <p><strong>Con:</strong> With high reward comes higher risk. </p> <p>You could be losing long-term revenue and customers as pricing increases. Especially if done too often, and too quickly.</p> <aside class="post-container block-note ms-60" data-pd-block="related"> <h4 class="h6 mb-1em"> See also </h4> <p class="text-body-s mb-1em"> <a href="https://www.pandadoc.com/blog/price-optimization/"> Hit by a sales slump? Unlock the secrets of price optimization and watch your profits soar </a> </p> </aside> <h3 class="wp-block-heading">Dynamic pricing strategy</h3> <p>An effective strategy that utilizes real-time market trends and data from inventory levels and customer demand.</p> <p><strong>Pro:</strong> Flexible with a shifting market, giving businesses more leverage with profit margins.</p> <p><strong>Con:</strong> Too many price adjustments risks losing customers and having the business come off as lacking confidence in their value and positioning in the marketplace.</p> <h2 class="wp-block-heading" id="Mastering-your-pricing-strategy-2">Mastering your pricing strategy</h2> <p>Alright, as promised, now comes the meat and potatoes part of the blog. </p> <p>You may be sitting here nodding, scrolling, ready to sink your teeth into how to utilize your (new) knowledge of CPQ and pricing models to your advantage.</p> <figure class="wp-block-image size-large"><img decoding="async" width="1024" height="623" src="https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-1024x623.png" alt="pricing strategy matrix" class="wp-image-56970" srcset="https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-1024x623.png 1024w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-300x182.png 300w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-768x467.png 768w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-1536x934.png 1536w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-550x334.png 550w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-334x203.png 334w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-668x406.png 668w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-314x191.png 314w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-628x382.png 628w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-360x219.png 360w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-720x438.png 720w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-100x62.png 100w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-460x280.png 460w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-920x559.png 920w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-1100x669.png 1100w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-490x298.png 490w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-980x596.png 980w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-705x429.png 705w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-1410x857.png 1410w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-206x125.png 206w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-411x250.png 411w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-148x90.png 148w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-296x180.png 296w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-658x400.png 658w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-1316x800.png 1316w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-115x70.png 115w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate-230x140.png 230w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_2-alternate.png 1760w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure> <p>Here’s what you need to ask yourself when crafting your perfect price:</p> <p><strong>Value & Market Position:</strong></p> <ul class="wp-block-list"> <li>While lower pricing may be effective initially, it can also be associated with a cheaper product. How do you plan to market your value to consumers? Also known as, value-based pricing.</li> </ul> <p><strong>Business Goals:</strong></p> <ul class="wp-block-list"> <li>Which matters more to you right now, market share or long-term value?</li> <li>Are you aiming to be cost-based, or going off the value of your product?</li> <li>Depending on your product, have you factored in the cost of production, and consumer demand?</li> </ul> <p><strong>Customer Perception:</strong></p> <ul class="wp-block-list"> <li>How do you plan to clearly communicate price fluctuations to your customers?</li> <li>What are the pain points customers currently have in your industry, and how can you best solve for their needs to promote customer value?</li> </ul> <p><strong>Competitors:</strong></p> <ul class="wp-block-list"> <li>Who are your biggest competitors? Look for 3-5, depending on your industry.</li> <li>What are their prices, and how do they vary?</li> <li>Are your services/products comparable, or do you have specifics they may not?</li> <li>Based on market research, do they offer freemium pricing or bundle pricing options, and will you?</li> </ul> <figure class="wp-block-image size-large"><img decoding="async" width="1024" height="770" src="https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-1024x770.png" alt="retail pricing strategy" class="wp-image-56975" srcset="https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-1024x770.png 1024w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-300x226.png 300w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-768x578.png 768w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-1536x1155.png 1536w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-550x414.png 550w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-334x251.png 334w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-668x503.png 668w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-314x236.png 314w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-628x472.png 628w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-360x271.png 360w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-720x542.png 720w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-460x346.png 460w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-920x692.png 920w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-1100x828.png 1100w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-490x369.png 490w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-980x737.png 980w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-705x530.png 705w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-1410x1061.png 1410w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-166x125.png 166w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-332x250.png 332w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-120x90.png 120w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-239x180.png 239w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-532x400.png 532w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-1063x800.png 1063w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-93x70.png 93w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3-186x140.png 186w, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/INF_How-to-Master-Pricing-Strategy-with-CPQ_3.png 1760w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure> <p>On the flip side, it’s equally important to understand what makes a weak pricing strategy.</p> <p>Poor targeting:</p> <ul class="wp-block-list"> <li>Not marketing correctly, reaching the wrong customers and losing out on the right ones.</li> <li>A high price with too much markup for the customer base.</li> </ul> <p>Incorrect value portrayal</p> <ul class="wp-block-list"> <li>Exaggerating what the consumer will get with their purchase, pricing too low for a high-value product, etc.</li> </ul> <p>Not finding the sweet spot:</p> <ul class="wp-block-list"> <li>Prices too high or too low compared to similar products will cause potential buyers to hesitate.</li> <li>Sales volume and price-sensitivity aren’t factored into decision making.</li> </ul> <h2 class="wp-block-heading" id="strongPricing-strategy-case-studiesstrong-3"><strong>Pricing strategy case studies</strong></h2> <p>If you’re overwhelmed narrowing down the best selling price, we’ve got you. </p> <p>Sometimes it helps to look at historical data of companies who have been there, done that, and reported back on the trial-and-error of pricing strategies for you.</p> <h3 class="wp-block-heading">Disney+ and penetration pricing</h3> <p>Back in 2019, Disney+ was far from the first big studio to launch a streaming platform. </p> <p>In fact, many considered them late to the game. </p> <p>While Disney is a major household name, Netflix and Hulu dominated the market.</p> <h4 class="wp-block-heading">Method </h4> <p>So, what did Disney do? </p> <p>They adopted the penetration pricing model<sup data-fn="2756a131-4e67-423d-9109-67b3f35d2cf0" class="fn"><a id="2756a131-4e67-423d-9109-67b3f35d2cf0-link" href="#2756a131-4e67-423d-9109-67b3f35d2cf0">2</a></sup> to break into market shares and get traction by starting out with a fiercely-competitive low price of only $6.99 a month. </p> <p>This business model positioned them to be the option with economy pricing for new customers, while still having a high-quality product.</p> <h4 class="wp-block-heading">Outcome</h4> <p>This strategy worked well for Disney+, who steadily increased their prices after accumulating a large customer base of monthly subscribers. </p> <p>Part of the effect was positioning their value with more original content, such as <em>The Mandalorian</em>, and making access to all Marvel (a Disney company) and Disney content exclusive to their platform.</p> <aside class="post-container block-note ms-60" data-pd-block="related"> <h4 class="h6 mb-1em"> See also </h4> <p class="text-body-s mb-1em"> <a href="https://www.pandadoc.com/blog/price-elasticity/"> A top guide to what price elasticity is, how to calculate it, types, and determining factors </a> </p> </aside> <h3 class="wp-block-heading">Canva and value-based pricing</h3> <p>The go-to graphic design site for non-graphic designers has moved through a few iterations since coming onto the scene in 2012. </p> <p>In 2019, Canva had a flat-rate pricing model for a monthly subscription of $12.95 in addition to keeping their free basic plan. </p> <p>Now, there’s also Canva for Teams at $14.99 monthly for 5 seats.</p> <h4 class="wp-block-heading">Outcome</h4> <p>Canva took the slow and steady approach<sup data-fn="197d58b4-59b1-4848-9ab2-77fd1a49686b" class="fn"><a id="197d58b4-59b1-4848-9ab2-77fd1a49686b-link" href="#197d58b4-59b1-4848-9ab2-77fd1a49686b">3</a></sup>, letting customers discover and try them out before ever asking for money. </p> <p>As word spread and use increased, they launched their first monthly subscription plan, backed by the added-value of new and improved features. </p> <p>If someone didn’t need that, they could simply keep their free version. </p> <p>Another few years later, they added a third-tier value package for companies for a very small amount more, making the incentive to purchase the package rather than 5 individual Pro accounts.<br>At present, Canva has over half a million team subscriptions. Some are from large corporations, such as Zoom and Marriott. </p> <p>Near the end of 2023, their customer subscriptions surpassed $2 billion<sup data-fn="2a67e212-7a05-47be-8295-4df5f2e6b5c0" class="fn"><a id="2a67e212-7a05-47be-8295-4df5f2e6b5c0-link" href="#2a67e212-7a05-47be-8295-4df5f2e6b5c0">4</a></sup>. </p> <p>In their case, the slow and steady value-based pricing model was highly successful.</p> <h3 class="wp-block-heading">CPQ and dynamic pricing</h3> <p>Enterprise companies in fields such as Saas benefit highly from CPQ when deciding their pricing model. </p> <p>CPQ’s ability to simplify complex products and integrate with CRM and ERP systems allows it to tailor solutions and provide accurate pricing for higher profitability.</p> <h2 class="wp-block-heading" id="CPQ-and-pricing-tools-4">CPQ and pricing tools</h2> <p>CPQ’s ability to provide data-driven pricing gives its users a competitive edge. </p> <p>Sales processes are streamlined, time is saved, pricing configuration can be automated, and tailored. Need we say more?</p> <p>According to a Forbes article, sales teams spend an estimated low of <a href="https://www.forbes.com/sites/kenkrogue/2018/02/15/why-sales-reps-spend-so-little-time-selling/#3122a2e51051" target="_blank" rel="noreferrer noopener nofollow">35% of their time</a> actually selling.</p> <p>Quickening the sales cycle is one of the key benefits of implementing CPQ software. </p> <p>Depending on your needs, and if you already have a CRM in place, there are a few options when it comes to <a href="https://www.pandadoc.com/blog/best-cpq-software/">choosing a CPQ software</a> that’s right for you.</p> <aside class="post-container block-note ms-60" data-pd-block="related"> <h4 class="h6 mb-1em"> See also </h4> <p class="text-body-s mb-1em"> <a href="https://www.pandadoc.com/blog/cpq-integration/"> Accelerate productivity with CPQ integrations </a> </p> </aside> <p>We’ve done the research so you don’t have to. </p> <p>By taking a look at the above blog you can see some of the highlights of the most commonly used CPQ software, and how PandaDoc stacks up against the competition.</p> <p><a href="https://www.pandadoc.com/cpq-software/">PandaDoc CPQ</a> is competitive in the landscape by streamlining your tools. </p> <p>You can easily connect them so you don’t have to switch between programs, while ensuring all relevant teams have transparency and access for quick and easy alignment.</p> <blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> <p>“<strong>CPQ has transformed our quoting process. Our quoting is not only more efficient but also much more attractive, offering an Amazon-esque experience to our customers. It has significantly streamlined our operations and enables reps to generate proposals in real time</strong>.”</p> <p>Mike McCormick, Director of Employee Education</p> </blockquote> <p>PandaDoc CPQ includes:</p> <ul class="wp-block-list"> <li>CRM integrations for easy set-up</li> <li>Pricing rules</li> <li>Drag-and-drop editor</li> <li>Approval workflows</li> <li>Step-by-step selling</li> <li>Embedding trusted payment options to make closing easy</li> </ul> <p>PandaDoc CPQ allows your team to easily managed all parts of the sales process.</p> <p>Deciding on your pricing strategy is a crucial part of any businesses success. </p> <p>Reaching your target audience and standing out to potential customers works when you have the right price for your product. </p> <p>Said another way—your value proposition.</p> <p>No matter what method you go with, remember, it’s a competitive market. </p> <p>Market conditions fluctuate, and the right pricing strategy for you will with it. If it doesn’t work out, try another. Better, have CPQ do it for you.</p> <p><a href="https://www.pandadoc.com/getdemo/">Get a demo</a> of PandaDoc CPQ For HubSpot and see how it can help your team interpret data and maximize revenue with pricing strategies.</p> <p></p> <div class=" mb-40" data-pd-block="ui-banner-brand"> <aside class="banner-brand banner-brand--narrow bg-color-pastel-amethyst"> <div class="banner-brand__content"> <h3 class=" h4 banner-brand__title mb-05em "> Streamline your integrations and processes with PandaDoc </h3> <p class="banner-brand__tagline text-body-l mb-30"> Link your most important tools to simplify and automate your workflow. </p> <a href="https://signup.pandadoc.com?ss=pricing-strategy_pricing-strategy_ui-banner-brand_56964&lng=en-US" class="ui-button"> Try PandaDoc </a> </div> <div class="banner-brand__cover"> <picture class="__migration image-block"> <img decoding="async" src="https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/automation@2x-334x290.png" srcset="https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/automation%402x-334x290.png 1x, https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/automation%402x.png 1.5x" width="334" alt="Automation"> </picture> </div> </aside> </div> <div class="accordion block-footnote pt-60" data-control="accordion"> <article class="accordion-item" data-accordion-item data-class-opened="accordion-item--opened"> <div class="accordion-item__title mb-1em" data-accordion-item-title> <span class="h5 text-bold mr-1em"> References </span> <div class="accordion-item__icon"> <svg xmlns="http://www.w3.org/2000/svg" width="24" height="14" fill="none" viewbox="0 0 24 14"><path d="M1.95.05 0 2l12.02 12L24 2.04 22.05.1 12.02 10.11 1.95.04Z"></path></svg> </div> </div> <div class="accordion-item__content"> <div class="accordion-item__content-inner" data-accordion-content data-class-visible="block-footnote__content"> <div id="references-list"> <ol class="block-footnote__references"> <li id="ecc3412d-038c-41a5-87b7-2b5b5fb7169e"> Statista, <a href="https://www.statista.com/statistics/1239795/price-comparison-online-shopping-habits/" target="_blank" rel="noreferrer noopener nofollow">Share of global shoppers who usually compare prices before buying online as of August 2022</a> <a href="#ecc3412d-038c-41a5-87b7-2b5b5fb7169e-link" data-target-id="ecc3412d-038c-41a5-87b7-2b5b5fb7169e" class="text-body-s color-meta reference-link" aria-label="Jump to footnote reference 1"> Show in the article ↑ </a> </li> <li id="2756a131-4e67-423d-9109-67b3f35d2cf0"> Marshall Johnston,<a href="https://marshall-johnstonmm.com/2022/03/13/pricing-disney/" target="_blank" rel="noreferrer noopener nofollow"> Pricing Disney+</a> <a href="#2756a131-4e67-423d-9109-67b3f35d2cf0-link" data-target-id="2756a131-4e67-423d-9109-67b3f35d2cf0" class="text-body-s color-meta reference-link" aria-label="Jump to footnote reference 2"> Show in the article ↑ </a> </li> <li id="197d58b4-59b1-4848-9ab2-77fd1a49686b"> Top Lyne, <a href="https://www.toplyne.io/blog/11-examples-of-saas-pricing-done-right" target="_blank" rel="noreferrer noopener nofollow">11 Examples of SaaS Pricing Done Right</a> <a href="#197d58b4-59b1-4848-9ab2-77fd1a49686b-link" data-target-id="197d58b4-59b1-4848-9ab2-77fd1a49686b" class="text-body-s color-meta reference-link" aria-label="Jump to footnote reference 3"> Show in the article ↑ </a> </li> <li id="2a67e212-7a05-47be-8295-4df5f2e6b5c0"> Famewall, <a href="https://famewall.io/statistics/canva-stats/" target="_blank" rel="noreferrer noopener nofollow">Canva Usage, Revenue & Growth Statistics (in 2024)</a> <a href="#2a67e212-7a05-47be-8295-4df5f2e6b5c0-link" data-target-id="2a67e212-7a05-47be-8295-4df5f2e6b5c0" class="text-body-s color-meta reference-link" aria-label="Jump to footnote reference 4"> Show in the article ↑ </a> </li> </ol> </div> </div> </div> </article> </div> <h6 class="wp-block-heading"><strong><em>Disclaimer</em></strong></h6> <p style="font-size:10px">PandaDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDoc services are governed by our Terms of Use and Privacy Policy.</p> </div> </section> </div> </div> <div class="mb-120 post-container post-authors ms-120 "> <p class="h5 text-bold mb-20">Author</p> <footer class=" mb-80 "> <div class="mb-20"> <div class="ui-author"> <a href="https://www.pandadoc.com/blog/author/anthony-esposito/" target="_blank" rel="noopener" class="ui-author__body ui-author__body--link"> <div class="ui-avatar ui-author__avatar"> <img width="40" height="40" src="https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/945B3461-1-150x150.jpg" class="attachment-40x40 size-40x40" alt="Anthony Esposito" decoding="async" loading="lazy" /> </div> <p class="ui-author__content"> <span class="text-semibold ui-author__name"> Anthony Esposito </span> <span class="text-caption color-meta"> Senior Account Manager at PandaDoc </span> </p> </a> </div> </div> <p class="text-body-s mb-20"> Anthony Esposito joined the company in March of 2021. He really enjoys helping customers find new avenues and workflows to help make their own organizations more efficient while consolidating their tech stack by using PandaDoc as a one stop shop. In his free time Anthony loves to cook. "I’m a massive foodie and I’m die hard Tampa Bay Buccaneers and Tampa Bay Lightning fan!" </p> <address> <ul class="ui-author__links text-body-s"> <li class="ui-author__links-item"> <a href="https://www.linkedin.com/in/anthony-esposito-1049549a/" class="ui-link-meta" target="_blank" rel="noopener"> LinkedIn </a> </li> </ul> </address> </footer> <p class="h5 text-bold mb-20">Reviewed by</p> <footer class=""> <div class="mb-20"> <div class="ui-author"> <a href="https://www.pandadoc.com/blog/author/keith-rabkin/" target="_blank" rel="noopener" class="ui-author__body ui-author__body--link"> <div class="ui-avatar ui-author__avatar"> <img width="40" height="40" src="https://public-site.marketing.pandadoc-static.com/app/uploads/sites/3/Keithheadshot-scaled-e1671798021839-150x150.jpeg" class="attachment-40x40 size-40x40" alt="Keith Rabkin" decoding="async" loading="lazy" /> </div> <p class="ui-author__content"> <span class="text-semibold ui-author__name"> Keith Rabkin </span> <span class="text-caption color-meta"> Chief Revenue Officer for PandaDoc </span> </p> </a> </div> </div> <p class="text-body-s mb-20"> Keith has been working in technology organizations for the past 15 years and is currently the Chief Revenue Officer for PandaDoc. Prior to this, he had roles leading Growth for Adobe's Digital Media business, Gmail, YouTube, and Google Fiber. </p> </footer> </div> </article> <aside class="post-container mb-120"> <div class="sharing-footer"> <h4 class="text-body-l sharing-footer__title align-center mb-15em"> Like the article? 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10.5258C17.2828 10.5374 17.2803 10.549 17.2777 10.5606L17.2776 10.5611C17.2724 10.5842 17.2672 10.6074 17.2618 10.6305C17.2473 10.6947 17.2324 10.7592 17.2173 10.8234C17.1275 11.2066 17.0309 11.5872 16.9269 11.9648C16.6488 12.9794 16.3211 13.9738 15.9465 14.945C15.8229 15.2652 15.9434 15.6309 16.2423 15.7996C16.7419 16.0817 17.2519 16.3455 17.7709 16.5899C18.1103 16.7498 18.5125 16.5993 18.6659 16.2569C18.9019 15.7298 19.1225 15.1957 19.3269 14.6552C19.6171 13.8876 19.8751 13.1074 20.0988 12.315C20.225 11.8686 20.3406 11.4185 20.4445 10.965C20.4883 10.7784 20.6561 10.6458 20.8476 10.6553C20.8877 10.6573 20.9277 10.6594 20.9677 10.6618C21.7596 10.7068 22.3775 10.7477 23.1244 11.1388C23.3441 11.2538 23.4299 11.5191 23.3398 11.75C22.6229 13.5884 21.781 15.2067 20.7345 16.8087Z" style="fill-rule: evenodd; clip-rule: evenodd; fill: #FF5721"/><path d="M16.7397 18.4409C17.1112 18.626 17.2553 19.0882 17.0325 19.4382C16.3326 20.537 15.5632 21.5915 14.7336 22.5959C14.5012 22.8773 14.8664 23.2796 15.142 23.0401C16.3263 22.0109 17.4406 20.9009 18.4707 19.7173C18.6648 19.4942 18.9767 19.4141 19.2551 19.5138C20.9893 20.1347 22.7655 20.5351 24.5475 20.7248C25.0058 20.7736 25.2394 21.3129 24.9359 21.6599C23.5994 23.1879 22.118 24.5855 20.5129 25.8318C19.8516 26.3453 19.0105 26.575 18.184 26.4406C15.8168 26.0556 13.5202 25.2418 11.4423 24.0436C11.0734 23.8308 11.0021 23.3355 11.2735 23.0073C11.4122 22.8398 11.5491 22.6707 11.6843 22.5002C12.778 21.1214 13.7558 19.6515 14.6052 18.1103C14.7996 17.7574 15.2485 17.633 15.5988 17.8324C15.9733 18.0456 16.3539 18.2487 16.7397 18.4409Z" style="fill: #FF5721"/><path d="M9.97538 25.5258C9.69831 25.3438 9.33147 25.3714 9.08782 25.5963C7.80573 26.7798 6.42702 27.8582 4.96778 28.8152C4.16722 29.3405 3.34261 29.8292 2.49744 30.2794C1.68589 30.7117 1.91598 31.967 2.83512 31.94C6.09539 31.8441 9.34009 31.2484 12.4176 30.1619C13.1117 29.9167 13.7946 29.648 14.4656 29.3568C14.8731 29.1799 15.2761 28.9947 15.6745 28.8013C16.0024 28.6422 15.9417 28.1586 15.5903 28.0618C13.6018 27.5139 11.6999 26.6584 9.97538 25.5258Z" style="fill: #FF5721"/></svg> <div class="mini-banner__content color-secondary typo-tiny typo-tiny--list-checked"> <div> <div>ChiliPiper <a href="https://www.pandadoc.com/customers-case-study/chili-piper/">increased their close rate by 28%</a> after implementing PandaDoc.</div> </div> </div> </div> </div> <div class="ui-hero-form__col ui-hero-form__col--form"> <div class="hs-form-demo bg-color-white b-radius-m" data-control="form-wrapper"> <ul class="ui-steps mb-20 "> <li class="text-body-m ui-steps__step">Fill out the form</li> <li class="text-body-m ui-steps__step">Book a time slot</li> <li class="text-body-m ui-steps__step">Attend a demo</li> </ul> <div class="ui-preloader" data-ui-preloader hidden="hidden"> <span class="ui-circle-loader"> <span></span> </span> </div> <div data-control="hubspot-form-ssr" data-portal-id="2127247" data-form-id="23023ef1-2817-4eb6-a284-4ccc1525fe0e" class="form-hubspot--columns mb-20 " 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16.8087Z" style="fill-rule: evenodd; clip-rule: evenodd; fill: #FF5721"/><path d="M16.7397 18.4409C17.1112 18.626 17.2553 19.0882 17.0325 19.4382C16.3326 20.537 15.5632 21.5915 14.7336 22.5959C14.5012 22.8773 14.8664 23.2796 15.142 23.0401C16.3263 22.0109 17.4406 20.9009 18.4707 19.7173C18.6648 19.4942 18.9767 19.4141 19.2551 19.5138C20.9893 20.1347 22.7655 20.5351 24.5475 20.7248C25.0058 20.7736 25.2394 21.3129 24.9359 21.6599C23.5994 23.1879 22.118 24.5855 20.5129 25.8318C19.8516 26.3453 19.0105 26.575 18.184 26.4406C15.8168 26.0556 13.5202 25.2418 11.4423 24.0436C11.0734 23.8308 11.0021 23.3355 11.2735 23.0073C11.4122 22.8398 11.5491 22.6707 11.6843 22.5002C12.778 21.1214 13.7558 19.6515 14.6052 18.1103C14.7996 17.7574 15.2485 17.633 15.5988 17.8324C15.9733 18.0456 16.3539 18.2487 16.7397 18.4409Z" style="fill: #FF5721"/><path d="M9.97538 25.5258C9.69831 25.3438 9.33147 25.3714 9.08782 25.5963C7.80573 26.7798 6.42702 27.8582 4.96778 28.8152C4.16722 29.3405 3.34261 29.8292 2.49744 30.2794C1.68589 30.7117 1.91598 31.967 2.83512 31.94C6.09539 31.8441 9.34009 31.2484 12.4176 30.1619C13.1117 29.9167 13.7946 29.648 14.4656 29.3568C14.8731 29.1799 15.2761 28.9947 15.6745 28.8013C16.0024 28.6422 15.9417 28.1586 15.5903 28.0618C13.6018 27.5139 11.6999 26.6584 9.97538 25.5258Z" style="fill: #FF5721"/></svg> <div class="mini-banner__content color-secondary typo-tiny typo-tiny--list-checked"> <div> <div>ChiliPiper <a href="https://www.pandadoc.com/customers-case-study/chili-piper/">increased their close rate by 28%</a> after implementing PandaDoc.</div> </div> </div> </div> </div> </div> </div> <section class="container mb-160"> <h3 class="h3 mb-40"> Related articles </h3> <div class="grid-card-3"> <div class="grid-card-3__item"> <article class="card-post "> <div class="card-post__cover mb-1em"> <a href="https://www.pandadoc.com/blog/cpq-integration/" class="card-post__cover-link"> <img 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