The B2B information-services industry has struggled to rediscover modest, let alone rapid, growth since the onset of the global financial crisis, as banks and other major customers closely watch costs. Many providers have resorted to heavy discounting to maintain volume and cost cutting to preserve margins.
There is a better approach. Pricing is a powerful tool that too few companies deploy to their advantage. It is one of the best ways for a company to grow organically and is especially relevant for products and services under development. Pricing is effective because information services tend to be “sticky.” Once end users start to rely on a specific service, they are reluctant to switch. Try telling Wall Street professionals that they have to give up their Bloomberg terminals or Thomson Reuters Eikon desktops or lawyers that they have to switch from Westlaw to LexisNexis or vice versa, and watch the reaction. If information service providers—and, more generally, companies that sell software as a service—understand the distinct value that different segments of end users derive from their services—in other words, what makes those services sticky—they can price more effectively.