49% MRR growth in 24 hours with one pricing
change
Earlier today, I experienced a staggering 49% growth in MRR, jumping $110 in just 24 hours, thanks to our newly introduced pricing plans.
This surge brought our new MRR to $336 for presspulse.ai.
The catalyst? A profound realization of the impact SaaS pricing can have on conversion and growth.
But was it as simple as adjusting our price points?
Not really. It's about a deep understanding of our Ideal Customer Profile (ICP), informed by 230 conversations.
The Complexity Behind Pricing
At a glance, pricing tables seem straightforward. Yet, many founders underestimate their significance.
Pricing isn't just about the numbers. It includes:
- positioning
- packaging
- pricing
Contrary to common belief, the cornerstone of effective SaaS pricing isn't the price itself - it's positioning.
Each pricing tier must be crafted with a specific Ideal Customer Profile (ICP) in mind, ensuring it resonates clearly with its intended audience. For example, if your service caters to 3 distinct ICPs, your pricing structure should reflect this through three well-defined tiers, each tailored to meet the unique needs of its corresponding ICP group.
Following positioning, the next critical element is packaging. It is everything you bundle together to help your ICP solve their problem and get their desired outcome. If one package doesn't have all the tools they need to get results, it will fail.
Finally, we arrive at the actual pricing - Setting this figure isn't just about costs; it's about understanding the value your packaging delivers to the ICP. The goal is to ensure your customers receive at least ten times the price they pay, making it a valuable investment in their success.
From Theory to Practice
A little context - PressPulse uses AI to find you press opportunities tailored to you and your company.
I started the year with 3 plans, although I had some early customers, but at the time I didn't fully understand my ICPs:
- Pro ($29/mo): For business owners.
- Team ($75/mo): For companies with larger teams.
- Agency ($150/mo+): For SEO/PR agencies.
Throughout January, I talked to 230 users via email, phone or video chat, asked them about their pain points, I learned 3 things:
- No one wants the Team plan. Although sounds good on paper, most larger companies have a dedicated person who manages PR, and they see it as either a risk to their job or added complexity.
- Three Users emailed me explicitly stating they want a lower price point.
- The Pro plan's package doesn't resonate with everyone. One great feature some Pro users liked, others found it annoying.
This led to a strategic overhaul of our pricing:
- Core ($19/mo): Tailored for busy business owners who want more PR.
- Pro ($29/mo): For companies who are serious about their PR game.
- Agency ($150/mo+): For specialized SEO/PR agencies.
The Impact of Change
After introducing these new plans and an annual option at a 20% discount, the results were immediate and astounding.
The first sign-up for the annual Core plan ($180) came within 12 hours of a quiet rollout, followed by two more for the Core plan by Tuesday morning. This affirmed the new positioning our Core Plan took.
So we doubled down with an announcement to 200 past trial users, which led to three additional subscribers, culminating in a $110 MRR increase in one day, capped off with a glowing testimonial.
The Takeaway
SaaS pricing is a powerful lever that touches every facet of your business. The key lies in a solid grasp of your ICP.
Each founder should understand their pricing better than anyone else on the planet. And if you're unsure as a founder, talk to your customers, they will show you the path.
Thanks for the insights! Yeah we’re in the same boat looking to make some changes! It’s always a little stressful but from what I’m seeing everyone who does this has success
THis is an eye-opener for me. I am going to re-evaluate my pricing.
Very interesting experience! In my case, I did not know the concept of ICP well, but I did know the concept of Customer Persona. So I doubted the difference between the two concepts. In case it happens to anyone else, I leave you what I was able to summarize about both concepts.
Ideal Customer Profile (ICP):
Focus: ICP is a broad description of the characteristics and traits that define the company or organization that is the ideal fit for a product or service.
Scope: ICP typically considers high-level factors such as industry, company size, geographic location, and broad business characteristics.
Purpose: The primary purpose of ICP is to guide overall business strategy, marketing efforts, and sales targeting by defining the ideal organizational attributes that align with the value proposition of the product or service.
Customer Personas:
Focus: Customer personas, on the other hand, delve into the individual characteristics of the people within the target organizations. They represent fictional, detailed profiles of specific individuals who make up the target audience.
Scope: Customer personas include more granular details such as job roles, responsibilities, pain points, goals, preferences, and behaviors of the individual users or decision-makers.
Purpose: The purpose of customer personas is to provide a more human-centered understanding of the target audience. They guide marketing messaging, product design, and customer engagement strategies by addressing the specific needs and preferences of individual users within the target organizations.
In essence, ICP provides a high-level, organizational view of the ideal customer, while customer personas offer a more personalized and detailed view of the individuals within that organization. Both are valuable tools for creating a comprehensive understanding of the target audience and informing business strategies. Ideally, businesses use both ICP and customer personas in conjunction to refine their marketing and sales approaches and enhance customer satisfaction.
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I saw a tweet the other day about cheap paying customers being more demanding than those who pay premium for SAAS product. Even irl the privileged folks will pay and smile as long as you deliver what's on the can.
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That's great to hear. Pricing is always so tricky to figure out, and everybody likes to keep the best strategies to themselves. Thanks for sharing.
Who would have thought lowering pricing would have led to an MRR jump?
It would capture more market share, at the cost of cannibalize some revenue in the future. But it's a conscious decision you need to make.
Thank you so much for sharing your strategy. I was feeling really stuck on how to price my SEO services, but your explanation has made it much clearer to understand the user's perspective.
Congrats!
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🌟 Discover the Churnfree Difference! 🌟
🔄 Easy Cancellation Surveys
🗣️ Valuable Customer Feedback
🎁 Exclusive Retention Offers
✔️ Quick Confirmation Steps
🖌️ Custom Design for Your Brand
🔗 Smooth Website Integration
Elevate your customer retention game with #Churnfree!
👀 #CustomerLoyalty #BusinessSuccess #EngagementBoost
🌟 Discover the Churnfree Difference! 🌟
🔄 Easy Cancellation Surveys
🗣️ Valuable Customer Feedback
🎁 Exclusive Retention Offers
✔️ Quick Confirmation Steps
🖌️ Custom Design for Your Brand
🔗 Smooth Website Integration
Elevate your customer retention game with #Churnfree!
👀 #CustomerLoyalty #BusinessSuccess #EngagementBoost
When you were thinking about who to present the existing pricing model to (before you changed it), who were the people you got feedback from?
Were they previous customers who already converted once?
Were they friends and family, colleagues?
They were all from users who signed up for a trial of the product. None of my friends is in my ICP group unfortunately.
Understood. And you gathered that through an email or newsletter ask?
yes email drip campaign :)
and phone calls and meetings booked by leads
Your post is quite clear and I can tell you know a lot about the subject. If it's okay with you, I'd want to subscribe to your RSS feed so I can stay up to speed on future updates. Thanks a lot, and keep up the good job!
Thank not sure how RSS feeds work, I don't have a newsletter but thinking about starting one. You can subscribe to my twitter for now:
https://twitter.com/GlitchPhoton
Thanks for this share. 🙏🏼
🚀🚀
Very insightful! I love how simply you explained it. I love low-effort <> high-impact strategies and this is an excellent example.
Thank you glad you enjoyed it!
So much true man! We increased prices from 18$ to 25$ and have the same # of subscribers. Nothing has changed.
If ppl see the value in your product, 30% difference in price won't make much difference for them. But for you it's a big bump.
Great job!
Haha I actually went from $19 to $29 in the end of 2023, then this time introduced a smaller plan at $19. It was a big bump. :)
This time around it's more about filling in the missing positioning customer wanted
Congrats. Alex harmozi put it well. Your offer (in this case pricing table) is what connects the market to your product. If its weak then no one will buy it.
definitely, we have a 30 day publicity guarantee, if they don't get any PR from us then we give them a refund, to make the offer a no-brainer.
Congrats!🚀 Your thoughtful customer centric approach to SaaS pricing is pretty good!
Thanks man but you should tune your AI replies to sound more human
Great story!
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