The Ultimate Guide to SaaS
Pricing Lars Lofgren Marketing Analyst - February 2013

@larslofgren #KISSwebinar

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

Price has a MASSIVE impact
on your business.

Bad Methods for Pricing

1. Product cost + X%
You’ll undercharge some customers and overcharge others.

2. What does the customer
want to pay? People have no idea until you ask them for their credit card.

Pricing by Value

Value-Based Pricing Your customers get
value worth $Y and it only costs them $X.

Why does this work? People
cannot perceive absolute value, only comparative value.

Some value is easy to
calculate...

Other value isn’t...

Pricing - Stage 1
1

Stage 1 is all about
the unknown. Customers don’t understand your product and you don’t understand your customers.

This is before product/market fit.

The price you pick won’t
be the best.

Your goal = prove that
the product can be sold.

Pricing - Stage 2
2

This is your growth stage.

Time to optimize your price.
You’ll need a deep understanding for how your customers use your product.

Interview your customers

The ideal price is... Just
high enough to need consideration but low enough to still provide plenty of value.

What if you have different
customer segments?

Separate segments with features. Price
sensitive customers get limited plans, value sensitive customers get the VIP plan.

For this to be successful...
You need to talk to your customers and understand the benefits they need the most.

Capture the full value from
each customer type.

Bidsketch Case Study - Old
Pricing

Bidsketch Case Study - New
Pricing

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”

Seven Rules for Pricing
7

Rule 1: End with a
9 $39 or $37?

Rule 2: Make Your Price
Short $1,000.00 or $1000?

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

Rule 4: Offer Multiple Prices

Rule 5: Double your Price
People tend to UNDERvalue their services.

Rule 6: Be Careful With
Freemium Plans Very difficult to make it work outside of mass markets.

Rule 7: Grandfather Old Customers
In As long as you don’t raise prices for old customers, you won’t get any complaints.

These are rules, not laws.

Your 3 Tools for Getting
It Done

1. The Customer Interview

2. A/B Testing

3. Customer Analytics

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

VIP KISSmetrics Demo
go.kissmetrics.com/webinar-15

Q&A Time! Lars Lofgren llofgren@kissmetrics.com
@larslofgren For more info on KISSmetrics contact Rossi Khoung rkhoung@kissmetrics.com (415) 800-4156