Ultimate Guide to SaaS Pricing
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The document provides a comprehensive guide to SaaS pricing strategies, outlining effective and ineffective pricing methods. It emphasizes the importance of value-based pricing, understanding customer segments, and the two stages of pricing: initial unknowns and growth optimization. Additionally, it outlines seven rules for pricing to enhance business revenue, including techniques like anchoring prices and offering multiple pricing tiers.
Ultimate Guide to SaaS Pricing
- 1. The Ultimate Guide to SaaS Pricing Lars Lofgren Marketing Analyst - February 2013
- 3. We’ll cover... 1 Right and wrong ways to pick a price 2 The two stages of pricing 3 7 rules to give your pricing the edge
- 4. Price has a MASSIVE impact on your business.
- 5. Bad Methods for Pricing
- 6. 1. Product cost + X% You’ll undercharge some customers and overcharge others.
- 7. 2. What does the customer want to pay? People have no idea until you ask them for their credit card.
- 9. Value-Based Pricing Your customers get value worth $Y and it only costs them $X.
- 10. Why does this work? People cannot perceive absolute value, only comparative value.
- 11. Some value is easy to calculate...
- 13. Pricing - Stage 1 1
- 14. Stage 1 is all about the unknown. Customers don’t understand your product and you don’t understand your customers.
- 15. This is before product/market fit.
- 16. The price you pick won’t be the best.
- 17. Your goal = prove that the product can be sold.
- 18. Pricing - Stage 2 2
- 19. This is your growth stage.
- 20. Time to optimize your price. You’ll need a deep understanding for how your customers use your product.
- 22. The ideal price is... Just high enough to need consideration but low enough to still provide plenty of value.
- 23. What if you have different customer segments?
- 24. Separate segments with features. Price sensitive customers get limited plans, value sensitive customers get the VIP plan.
- 25. For this to be successful... You need to talk to your customers and understand the benefits they need the most.
- 26. Capture the full value from each customer type.
- 27. Bidsketch Case Study - Old Pricing
- 28. Bidsketch Case Study - New Pricing
- 29. Bidsketch Case Study - Results 1 Doubled average revenue per customer 2 Only a slight drop in conversions 3 No impact on churn Google “bidsketch pricing post”
- 30. Seven Rules for Pricing 7
- 31. Rule 1: End with a 9 $39 or $37?
- 32. Rule 2: Make Your Price Short $1,000.00 or $1000?
- 33. Rule 3: Anchor Your Price 1 That product is $100, this is only $10 2 Was $150, now only $80 3 Value of $1500, selling for only $150
- 34. Rule 4: Offer Multiple Prices
- 35. Rule 5: Double your Price People tend to UNDERvalue their services.
- 36. Rule 6: Be Careful With Freemium Plans Very difficult to make it work outside of mass markets.
- 37. Rule 7: Grandfather Old Customers In As long as you don’t raise prices for old customers, you won’t get any complaints.
- 38. These are rules, not laws.
- 39. Your 3 Tools for Getting It Done
- 40. 1. The Customer Interview
- 41. 2. A/B Testing
- 43. KISSmetrics helps you find the right price 1 Know who to interview 2 Get A/B results from your whole funnel 3 Track WHO’s doing what
- 45. Q&A Time! Lars Lofgren llofgren@kissmetrics.com @larslofgren For more info on KISSmetrics contact Rossi Khoung rkhoung@kissmetrics.com (415) 800-4156