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Need help: Pricing strategy for a developer tool with 400000 users

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Re: Need help: Pricing strategy for a developer tool with 400000 users

#21
Have a look at these resources on pricing and bootstrapping respectively:

- Michael Dearing on Pricing: https://www.heavybit.com/library/video/harrison-metals-micha...

- Designing the Ideal Bootstrapped Business – Jason Cohen, Founder, WP Engine – MicroConf 2013: https://www.youtube.com/watch?v=otbnC2zE2rw

Re: Need help: Pricing strategy for a developer tool with 400000 users

#24
post #8
post #6

> Pro/Enterprise plan with features like (SSO and integrations) https://sso.tax/

Thanks, it is very helpful and I never knew companies charge so much for SSO, Now we have also decided to raise the price of SSO plan. Thanks for sharing this

This is definitely not the takeaway for that website. SSO should not be a huge expense. It's a critical thing, even for small organizations.

Re: Need help: Pricing strategy for a developer tool with 400000 users

#25

Patio11 writes on positioning and pricing in the SaaS space. [1] He works at Stripe, and has an updated discussion as well. [2] I would say that switching to a Subscription model will probably be the most significant part of your transition. "I’d probably increase your pricing to $99 / $499 / $2,499. This intentionally prices out pathological customers on the lower end, who will be exceedingly difficult to deal with.…

Are there any good reads on the notion of the ‘pathological customer’?

Re: Need help: Pricing strategy for a developer tool with 400000 users

#26

Patio11 writes on positioning and pricing in the SaaS space. [1] He works at Stripe, and has an updated discussion as well. [2] I would say that switching to a Subscription model will probably be the most significant part of your transition. "I’d probably increase your pricing to $99 / $499 / $2,499. This intentionally prices out pathological customers on the lower end, who will be exceedingly difficult to deal with.…

Are there any good reads on the notion of the ‘pathological customer’?

I've seen a number of pieces that talk about getting rid of bad users by getting rid of the freemium model. I've done some looking around and the search phrase "freemium bad idea" seems like it comes up with some hits for the topic.

People who want it for free are often unreasonably demanding, feel entitled, need a lot of hand holding and education about how to use the product, what it's really for, etc. People willing and able to pay are much more likely to have their act together, have reasonable expectations, etc.

I have mixed feelings about it because of the social implications of excluding those who most need access to something for free, but you should at least be aware that users who want it for free are more likely than other users to be people with personal problems and poor boundaries who can be a pain to deal with. If you want to give it away for free -- at least some of the time -- you need to be aware that setting boundaries other than price will be a necessary part of protecting your time and sanity.

All businesses do some things for free. For example, Walmart does not charge you to use their bathroom.

But that doesn't mean all cases of giving it away for free are equally good business ideas. Sometimes they are extremely bad ideas and understanding what you should be willing to do for free and when, where, how and why is probably a very understudied and critical detail of how to create a viable business.

Re: Need help: Pricing strategy for a developer tool with 400000 users

#27
This is a complex question. Pricing is how you capture the value that your product creates for your customers. Probably the best book on pricing is Thomas Nagle's "Strategy and Tactics of Pricing Profitably. https://www.amazon.com/Strategy-Tactics-Pricing-Growing-Prof... Mark Stiving's Impact Pricing is also quite good https://www.amazon.com/Impact-Pricing-Blueprint-Driving-Prof...

You have not supplied enough detail to suggest an approach. You are welcome to contact me for a no cost office session to walk around the particulars see https://www.skmurphy.com/blog/2016/08/01/skmurphy-office-hou...

Re: Need help: Pricing strategy for a developer tool with 400000 users

#28
post #8
post #6

> Pro/Enterprise plan with features like (SSO and integrations) https://sso.tax/

Thanks, it is very helpful and I never knew companies charge so much for SSO, Now we have also decided to raise the price of SSO plan. Thanks for sharing this

Can I make an alternate suggestion?

I'd say that SSO should be available on the cheapest or second cheapest tier.

However, I would then make SCIM support (automated provisioning/deprovisioning) part of the most expensive tier.

If you're a small business, say 20-30 people then you can manage that by hand, but if you're a larger organisation then SCIM is a must-have.

I run a SaaS business. When dealing with vendor qualification questionnaires, you can tell the small and large businesses apart by whether they want SCIM support or not.

It's my experience that SSO makes your customers very 'sticky', and keeps IT and compliance departments happy. You blend into the suite of tools they use. I'll never forget the first time I saw a client's Okta portal with our app sitting next to Outlook web access, Zoom and Salesforce.

This client has only ever increased the number of seats and usage of our software.

From my point of view as a SaaS CTO we're happy to pay extra for SSO (i.e. Slack) but not at "contact us" level pricing (for example, Smartsheet)

Re: Need help: Pricing strategy for a developer tool with 400000 users

#30

This is a complex question. Pricing is how you capture the value that your product creates for your customers. Probably the best book on pricing is Thomas Nagle's "Strategy and Tactics of Pricing Profitably. https://www.amazon.com/Strategy-Tactics-Pricing-Growing-Prof... Mark Stiving's Impact Pricing is also quite good https://www.amazon.com/Impact-Pricing-Blueprint-Driving-Prof... You have not supplied enough detail…

Thanks, I will contact you soon
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