Investigating The Relationship Between Pricing Strategies And International Customer Acquisition In The Early Stage Of SaaS: The Role Of Hybrid Pricing

Abstract

Modern cloud infrastructures make it possible for SaaS businesses to provide their services to clients all over the world. As a result, it is easy for a SaaS company to operate on a worldwide scale in an early stage. Innovative SaaS services are more difficult to price than regular products. Poor pricing may lead to a misleading impression of the product, while a well-thought-out price plan can assist a business in achieving its immediate and long-term revenue objectives while also satisfying its customers. The goal of this study is to investigate which pricing strategy helps SaaS organizations attract more customers. Correlation, Random Forest Regression, and Pairwise Multiple Linear regression were applied. The correlation heatmap shows that the sales volume is highly and positively associated with hybrid pricing. This indicates that the implementation of the hybrid pricing technique is associated with more sales volume.  The majority of SaaS companies in the study sample used freemium, high-low, and hybrid. The skimming and the penetration pricing techniques were the least employed pricing tactics in SaaS.  The regression model with hybrid pricing has also shown a high explanatory performance. With an overall score of 91.89 percent, the findings of this empirical study showed a sufficient degree of accuracy. According to the random forest results, among other techniques, hybrid pricing is the most significant pricing technique in increasing sales volume in SaaS.  This study recommends that the SaaS business should employ a hybrid pricing approach in order to attract more consumers, enhance the entire experience they deliver, and therefore increase SaaS sales revenues.