The Secrets to SaaS PricingLars LofgrenProduct Marketer - June 2013
@larslofgren #KISSwebinar
The 3 Models of SaaS Pricing1How to Pick the Best Price28 Pricing Hacks3How to Test New Pricing4We’ll cover...
Model 1: Targeting Small Businesses1
Self-service, no sales team, limited support
Pricing in the $10 - $100/month rangeThis mean you need to focus onscale and acquiring customerscheaply.
Similar companies
Model 2: Targeting Enterprise2
Sales team, contracts, full support
Pricing is $1,000s or $10,000s/monthVery little is automated, your teamwill be working very closely witheach customer.
Similar companies
Model 3: The Mid-Size Hybrid3
Automated marketing with a sales team
Pricing is $100’s/monthYou’ll need to scale your leads butyou’ll have a full sales team toclose them.
Similar companies
Pick the right price range for your vision
2 Bad Methods for Pricing
1. Product cost + X%You’ll undercharge somecustomers and overcharge others.
2. What does the customer want to pay?People have no idea until you askthem for their credit card.
Pricing by Value
Value-Based PricingYour customers get value worth $Yand it only costs them $X.
For B2B, focus on money earned or saved
How much extra revenue do they earn?1How many hours do they save?2What other costs do they avoid?3Ask your customers:
Capture more value from each customer.
There’s no such thing as a perfect price.If you need more guidance, pick aprice that’s 10% of the valuedelivered.
8 Pricing Hacks8
Rule 1: Go AnnualYou’ll improve cash flow, reduceyour churn, and improve yourrevenue.
Rule 2: Don’t Add Unnecessary Digits$1000 looks cheaper than $1,000or $1000.00
Rule 3: Avoid Discounts Unless LaunchingDiscounts create destructivecustomer habits. Do not use themregularly.
Rule 4: Offer Multiple Prices to Anchor
Rule 5: Use pricing plans to segment customers.Different customer types getdifferent value from your product.Capture that ...
Rule 6: Double Your PriceWe all tend to UNDERvalue our ownservices.
Rule 7: Be Careful With Freemium PlansVery difficult to make it work in B2Bmarkets.
Rule 8: Grandfather Old Customers InAs long as you don’t raise pricesfor old customers, you won’t getany complaints.
These are rules, not laws.
How to Test New Pricing - 4 Steps
Step 1: Track subscription plans for all customersSubscription plans1Each monthly charge2Any cancelations3Access to total ...
Step 2: Launch Your New Pricing Page
Step 3: Track your entire funnel
Step 4: Track ARPU and churn
KISSmetrics helps you find the right priceConnects all data to individual people1A/B tests for your entire funnel2See whic...
VIP KISSmetrics Demokiss.ly/webinar-20
Q&ATime!Lars Lofgrenllofgren@kissmetrics.com@larslofgren
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The Secrets to SaaS Pricing

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