Goal

DATASEC currently operates with an extensive but unflexible pricing model, which presents opportunities for greater consistency, scalability and revenue optimization. The goal of the project was to develop a dynamic, data-driven pricing model that aligns customer needs with DATASEC’s complex software and service offerings and that supports scalable growth. To address these challenges, we worked out a hybrid pricing structure tailored to different customer segments and supported by a CPQ configurator tool for scalable automation.  

Methodology

For our approach we combined three key methods:

1. Literature: First we analyzed academic literature and industry sources on pricing to gain a deeper theoretical understanding of the different pricing models. These included subscription-based, tiered, usage-based and hybrid pricing strategies. 

2. Best practices: Secondly, to identify best practices, we conducted web research using search queries such as “companies using subscription-based pricing” or “examples of tiered pricing in SaaS”. We started with Google’s AI-generated overview before conducting more in-depth research and analysis. We evaluated the output based on the companies’ business models, similarity to DATASEC, and pricing transparency. Best practices were gathered from companies such as Notion, Stripe, and Copy.ai. 

3. Expert interview: Lastly, we conducted two expert interviews with industry experts on pricing. 

 

Results

Based on our research we developed two recommendations that include our key findings. Namely subscription-based, usage-based and tiered pricing models combined in a hybrid model to offer maximum flexibility and to align with customer value. We thereby arrived at our two strategic recommendations:

1. Tiered + Customized Pricing 

 

The first recommendation consists of two different plans, a standard and a real-estate plan, each with three fixed tiers. These tiers scale by the number of users, data volume, and include certain modules. This enables easier entry for SMEs and leads the way to upscaling for future growth. For larger enterprise clients we advise keeping the currently used customized pricing, as they need more tailored offerings than SMEs.

1. CPQ Implementation

 

The second recommendation is adopting a CPQ (Configure, Price, Quote) system from Salesforce, Oracle or SAP to automate the pricing, bundeling, and quoting process. The implementation of a CPQ system will cost DATASEC approximately €50,000 to €150,000 in the first year, depending on the provider used. These costs include the initial set-up costs and license and are expected to reduce in year two. 

Cooperation Partner

DATASEC information factory GmbH
Welterstraße 57, 57072 Siegen
Germany
contact@datasec.de

Contact Person

• Sonja Siebel - So.Siebel@datasec.de

Student Team

• Tom Edinger

• Moritz Heidenreich

• Paulina Horvat Zeilhofer

• Finja Reithmeier

• Mathias Stolberg-Stolberg

• Jacob von Zimmermann
   

Project Manager

• Caroline Fabian

• Melina Mazzucato