Stupid simple pricing tweaks that will make you more money

If you only have one or two price tiers, consider adding more.

First things first - if you only have one price point, considering adding a few more.

Stock Alarm went from a single price point of $4.99 to three tiers 5, 10, and $20.

50% of all new customers chose the $20 plan just because it was there!

Price based on your value metric

A value metric is one that grows side by side with the added benefits received from your product.

For example, an SEO tool might price based on the number of keywords tracked (the larger the company the more keywords it'll need to track, the more value they get from your product, the more they pay).

Katlinks, an SEO platform, prices based on a number of various value metrics that scale with the business:

• Number of total backlinks - larger sites will have more links pointing at them
• Number of rank tracking credits (it uses credits to track rankings so the more keywords you have, the more it costs)
• Number of on-page audit credits (larger sites have more pages, thus they get more value out of the product and pay more)

A blog platform might price based on pageviews. The more popular the blog, the more value from the platform, the more you charge for that value.

You can always put in place caps so the prices do not get outrageously high.

Add an annual option and have it selected by default

Something as simple as adding an annual option can result in more up-front cash. This works particularly well on lower-priced products. Some people even prefer to pay for an entire year just to avoid monthly charges - sounds crazy but true (I'm one of those people).

Most companies offer a 20%ish discount for those who pre-pay for a year. Not a bad trade-off for 10 months' worth of cash upfront! Use this to reinvest in your business or to scale acquisition efforts.

Restrict features for lower tiers

This one will take a bit of trial and error unless you really understand your customers. Limited certain features on lower tiers will bump a portion of those would-be customers to the next tier.

Pintura's company license sales went up by 600% when Rik limited the Hobby tier to 1 developer and 1 project.

Recommend a pricing tier.

The path of least resistance is a metaphorical expression that states: given alternative paths, an object will take the path of least resistance. In other words, it'll go with the flow.

It turns out, in life, most people also go with the flow.

Think about your own shopping experience. Do you narrow down your product searches based on top reviews only? I know I do. This is us taking the path of least resistance, the sure thing, whatever you want to call it - just go with the flow.

We do this to save time, to reduce cognitive load (ie. we're lazy). Giving people an option that is clearly presented as the path of least resistance will automatically default some percentage of them to take that path. I know, wizardry level stuff!

Knowing this, you can apply this principle by recommending a specific price tier. Doing so, also anchors any surrounding objects to that price by visually guiding our attention to that object first.

Pintura, a javascript image editor does this well by emphasizing the ideal license for their preferred type of customer.

Pintura also does something else well, which brings me to my next point:

Show highest tiers first.

There are two paths to analyzing the page above. Most people will fall into one or the other:

1. A person will look at the highlighted tier first, then at Enterprise (left to right) and back to Small business, before finally resting their attention on Hobby.
2. In this situation, the middle Small Business tier acts as a reverse anchor - it looks considerably cheaper than the Enterprise tier so the person's attention is drawn back to the recommended tier. Since they had a quick glance to notice the much higher Enterprise tier, the Small Business license seems much more affordable. You can almost feel a sense of relief if you are a small team.
3. A person will visit this page and notice the Enterprise tier first, thus anchoring themselves to this number. Any subsequent option looks considerably cheaper. With this insight, you quickly realize that it doesn't matter if the mid tier is $649 or $849 because they are both being compared to $2,499. The exception being another product with very similar features and value but one that is considerably cheaper.

An exception to the above is when you have tiers that increase based on some value metric, in which case it makes sense to show them in the order of increasing metrics. But, if you have an enterprise plan with a fixed charge, you could display it first.

Display prices annually, but per month by default.

Make your product feel more accessible by displaying the monthly price, even on the annual pricing tab. Go ahead and add the "billed annually as $X" part, but de-emphasize it.

The idea is not to trick anyone into any unexpected charges but to anchor them to that lower price instead of thinking actively about the larger annual charge.

Here is an example of Copy.ai that does it well:

Why have the annual tab selected by default?

Because your annual numbers will be lower than the monthly (when displayed as monthly) and when the user switches back to monthly, it'll feel as though they are paying more and "missing" that deal they just saw.

This is commonly referred to as loss aversion. Once a person established a reference point ($35 in our example image above), they are more sensitive to losses relative to that number (in our case, a loss in savings is when your price increases when switching over to monthly), than to gains. In other words, the loss of the discount is felt more deeply than when the discount is gained.

Divide your SaaS price tiers into smaller units (if applicable).

If your product pricing scales by some value metric, consider showing the price per that metric. For example, HotJar Business plans start at $99 (and you see $99 on the pricing page), but there is also a dropdown to choose how many daily sessions you might use up, and the price increases as more sessions are selected.

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