The Secrets to SaaS Pricing
• 3. The 3 Models of SaaS Pricing1How to Pick the Best Price28 Pricing Hacks3How to Test New Pricing4We’ll cover... • 4. Model 1: Targeting Small Businesses1 • 5. Self-service, no sales team, limited support • 6. Pricing in the $10 - $100/month rangeThis mean you need to focus onscale and acquiring customerscheaply. • 7. Similar companies • 8. Model 2: Targeting Enterprise2 • 9. Sales team, contracts, full support • 10. Pricing is $1,000s or $10,000s/monthVery little is automated, your teamwill be working very closely witheach customer. • 11. Similar companies • 12. Model 3: The Mid-Size Hybrid3 • 13. Automated marketing with a sales team • 14. Pricing is $100’s/monthYou’ll need to scale your leads butyou’ll have a full sales team toclose them. • 15. Similar companies • 16. Pick the right price range for your vision • 17. 2 Bad Methods for Pricing • 18. 1. Product cost + X%You’ll undercharge somecustomers and overcharge others. • 19. 2. What does the customer want to pay?People have no idea until you askthem for their credit card. • 20. Pricing by Value • 21. Value-Based PricingYour customers get value worth $Yand it only costs them $X. • 22. For B2B, focus on money earned or saved • 23. How much extra revenue do they earn?1How many hours do they save?2What other costs do they avoid?3Ask your customers: • 24. Capture more value from each customer. • 25. There’s no such thing as a perfect price.If you need more guidance, pick aprice that’s 10% of the valuedelivered. • 26. 8 Pricing Hacks8 • 27. Rule 1: Go AnnualYou’ll improve cash flow, reduceyour churn, and improve yourrevenue. • 28. Rule 2: Don’t Add Unnecessary Digits$1000 looks cheaper than $1,000or $1000.00 • 29. Rule 3: Avoid Discounts Unless LaunchingDiscounts create destructivecustomer habits. Do not use themregularly. • 30. Rule 4: Offer Multiple Prices to Anchor • 31. Rule 5: Use pricing plans to segment customers.Different customer types getdifferent value from your product.Capture that value. • 32. Rule 6: Double Your PriceWe all tend to UNDERvalue our ownservices. • 33. Rule 7: Be Careful With Freemium PlansVery difficult to make it work in B2Bmarkets. • 34. Rule 8: Grandfather Old Customers InAs long as you don’t raise pricesfor old customers, you won’t getany complaints. • 35. These are rules, not laws. • 36. How to Test New Pricing - 4 Steps • 37. Step 1: Track subscription plans for all customersSubscription plans1Each monthly charge2Any cancelations3Access to total revenue, averagerevenue per user, and churn4 • 38. Step 2: Launch Your New Pricing Page • 39. Step 3: Track your entire funnel • 40. Step 4: Track ARPU and churn • 41. KISSmetrics helps you find the right priceConnects all data to individual people1A/B tests for your entire funnel2See which plans are most profitable
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The Secrets to SaaS Pricing
- 1. The Secrets to SaaS Pricing Lars Lofgren Product Marketer - June 2013
- 3. The 3 Models of SaaS Pricing1 How to Pick the Best Price2 8 Pricing Hacks3 How to Test New Pricing4 We’ll cover...
- 4. Model 1: Targeting Small Businesses 1
- 5. Self-service, no sales team, limited support
- 6. Pricing in the $10 - $100/month range This mean you need to focus on scale and acquiring customers cheaply.
- 8. Model 2: Targeting Enterprise 2
- 9. Sales team, contracts, full support
- 10. Pricing is $1,000s or $10,000s/month Very little is automated, your team will be working very closely with each customer.
- 12. Model 3: The Mid-Size Hybrid 3
- 13. Automated marketing with a sales team
- 14. Pricing is $100’s/month You’ll need to scale your leads but you’ll have a full sales team to close them.
- 16. Pick the right price range for your vision
- 17. 2 Bad Methods for Pricing
- 18. 1. Product cost + X% You’ll undercharge some customers and overcharge others.
- 19. 2. What does the customer want to pay? People have no idea until you ask them for their credit card.
- 20. Pricing by Value
- 21. Value-Based Pricing Your customers get value worth $Y and it only costs them $X.
- 22. For B2B, focus on money earned or saved
- 23. How much extra revenue do they earn?1 How many hours do they save?2 What other costs do they avoid?3 Ask your customers:
- 24. Capture more value from each customer.
- 25. There’s no such thing as a perfect price. If you need more guidance, pick a price that’s 10% of the value delivered.
- 27. Rule 1: Go Annual You’ll improve cash flow, reduce your churn, and improve your revenue.
- 28. Rule 2: Don’t Add Unnecessary Digits $1000 looks cheaper than $1,000 or $1000.00
- 29. Rule 3: Avoid Discounts Unless Launching Discounts create destructive customer habits. Do not use them regularly.
- 30. Rule 4: Offer Multiple Prices to Anchor
- 31. Rule 5: Use pricing plans to segment customers. Different customer types get different value from your product. Capture that value.
- 32. Rule 6: Double Your Price We all tend to UNDERvalue our own services.
- 33. Rule 7: Be Careful With Freemium Plans Very difficult to make it work in B2B markets.
- 34. Rule 8: Grandfather Old Customers In As long as you don’t raise prices for old customers, you won’t get any complaints.
- 35. These are rules, not laws.
- 36. How to Test New Pricing - 4 Steps
- 37. Step 1: Track subscription plans for all customers Subscription plans1 Each monthly charge2 Any cancelations3 Access to total revenue, average revenue per user, and churn 4
- 38. Step 2: Launch Your New Pricing Page
- 39. Step 3: Track your entire funnel
- 40. Step 4: Track ARPU and churn
- 41. KISSmetrics helps you find the right price Connects all data to individual people1 A/B tests for your entire funnel2 See which plans are most profitable3