The Secrets to SaaS Pricing
 

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... ...

• 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 The Secrets to SaaS Pricing Presentation Transcript

  • 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 value.
  • 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 revenue, averagerevenue per user, and churn4
  • 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 which plans are most profitable3
  • VIP KISSmetrics Demokiss.ly/webinar-20
  • Q&ATime!Lars Lofgrenllofgren@kissmetrics.com@larslofgren