Drop your best SaaS pricing tip here

This helped a few of my clients increase their conversion 30%+

Decoy Effect - People change their preference between two options when presented with a third option (the decoy) that is “asymmetrically dominated”

Pricing - if you offer just 1 price, a customer has 2 choices: either to buy or not.
If you offer 2 choices of pricing, a customer has 3 choices: To buy the cheaper one, the more expensive one, or not to buy.

When you add the third pricing option, a much more expensive one, now the second price (the previous expensive one) looks like a bargain.

I write more about it here https://www.indiehackers.com/post/6-cognitive-biases-in-marketing-copywriting-to-help-you-make-a-few-extra-bucks-in-2022-79e2ff61dd

Generalising a bit here, but if your product can be used by multiple team members (has some kind of multi user functionality) you should be charging > $100 / mo for that.

If a company has more than one employee and they are using your app, $100 is nothing.

Just to throw in another tip, something that worked for us: offer an unlimited plan at a high price point. It offers your customer predictable costs so they don't have to worry about future changes to their pricing plan (e.g. when billing X/user/month and for you it's a way to incentivize users to commit to a larger plan.

I don't know if you're looking at B2C or B2B, but in our case we offer a $999/month plan with unlimited users (B2B obviously). That's a great deal for customers and for us, and those teams also onboard quicker because they don't need to debate each extra license.

Oh and this is all very low-touch btw: free trial with a few emails at most (no sales calls or anything). Not saying that works for every market, but it's worth experimenting with higher price plans.

Pricing is a never ending part of growing a SaaS business :). Believe me you'll never make it perfect... Until point that even your customer don't know how your pricing works, yet they'll just keep paying you (check Intercom, Hubspot, etc)

I'll drop a few links below that will help:

https://www.profitwell.com/recur/all/value-based-pricing -- maybe it's hard to start with a value based pricing, but the trend (PLG) is going this way.

https://medium.com/inside-personio/developing-a-data-driven-packaging-for-your-saas-product-703a67648dc4

https://baremetrics.com/blog/saas-pricing-models

https://userguiding.com/blog/pricing-page-best-practice/ -- disclaimer: this is from our blog. not to spam or anything. pricing page design is very important as well

Charge More 😄

Flat rate pricing is probably the simplest way to sell a SaaS solution: you offer a single product, a single set of features, and a single price.

Localize your Pricing
Adapt your prices and currency regionally

• Revenue per customer is ⬆️30% when you use the proper currency symbol

• Use different prices in different regions because
  Demand and Purchasing Power Parity is not equally distributed (U.S. vs. Africa)

Another one I found really interesting!

• Unlock 50% off if you jump on a call to give feedback after a month usage
  Celebrate your early adopters by dropping in half the price of your product, for their early trust.

I post a SaaS Pricing Tip per day on my Twitter
I'd love to meet you all!😁(following back)

I would say - keep tweaking your pricing.

During the past seven years building Postcode API (https://www.postcodeapi.nu/), we've changed pricing regularly👇

• From two paid plans to five paid plans
• From free tier to Sandbox
• New Enterprise plans with SLA's for heavy users
• Raising prices

Each update grew our revenue.

No idea what you're working on, but I say - keep working on the pricing of it 😉

Always try to price based on value for your customer.

• How much time do they save?
• How much money will they save?
• What's the pain point you're solving?

Also, charge as high as possible. Higher price might mean less users, but also less support and less scaling for the potential same amount of profit.

Less support will allow you to focus on growth and pampering your users so that they will never want to leave.

I found this link very helpful when looking at prices from a psychological perspective. It goes to great depth about perception and display of pricing and how we can use the oddities of the human brain to our advantages.

https://www.nickkolenda.com/psychological-pricing-strategies/

Make it easy to test your pricing.

I've always been nervous about raising prices but it's always worked out. I've also made it easy to grandfather our customer base and roll back pricing just in case we've gone to far (which hasn't happened yet). Just having that piece of mind has made it easier to raise prices and run tests.

An easy framework I recommend to all my SaaS customers is to only base their pricing on a maximum of 2 variables out of:

• Users
• Usage
• Features

Using all 3 variables makes a pricing tier way too difficult to understand.

Another tip is that the pricing should go up if:

• Your cost to serve goes up
• The value goes up

For example: there's no point increasing the pricing for an email platform when someone adds more users, since your infrastructure goes doesn't really go up + they don't get more value because of that. The pricing should go up if they send more emails (higher cost to serve) or use more advanced features (more value).

The key is to tie your pricing to your product's value; the more value it delivers, the higher the price. Note: this is HARD to achieve.

So:
❌ An Unlimited plan is never a good idea, even at a high price point.
✅ Raise your prices as you release more features (w/ grandfather clause)

Freemium or bust :)

You're probably not charging enough is a common problem. YC recommend you charge more is "the number one piece of advice [they] give to most startups to fix their pricing".

Here is a video from YC discussing it: https://www.ycombinator.com/library/6h-startup-pricing-101

When it comes to pricing, do your best to keep it really simple at first.

I've seen (and been a part of) plenty of projects that have attempted to optimise pricing too early, only to realise that the model wasn't right, or nobody wanted to use the product.

Complex pricing models (with several tiers, discounts, referral programs, affiliate programs, starter programs) cost a lot of developer time, so only allocate it when you're sure it's worth it.

Validate a simple pricing model first.

First, you'll want to make sure that your pricing is in line with the competition. Take a look at what similar products are charging and price your product accordingly. Second, you'll want to consider the value your product brings to the customer. pricing your product too low could imply that it's not worth very much, while pricing it too high could make it seem out of reach for many potential customers. Finding the right balance is key to success.