Doubling SaaS Revenue By Changing The Pricing Model
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Doubling SaaS Revenue By Changing The Pricing Model
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Re: Doubling SaaS Revenue By Changing The Pricing Model
#2Happy to answer questions to the extent that I can.
Speaking of which: if it isn't transparently obvious by now, I really, really like getting feedback about how my advice worked out. If you ever implement a suggestion from me (particularly with an A/B test), please, drop me an email. Even if the result was "Well, that was sure an epic failure", because negative confirmation is useful, too. (If you want to share results I can write up for the blog, I appreciate that, too, but I'd be just as pleased with a "Keep this under your hat but we did a first-experience tour and, yikes, engagement +20%.")
Re: Doubling SaaS Revenue By Changing The Pricing Model
#3I always wondered how volatile your pricing scheme can be. Suppose you wanted to A/B test a pricing scheme - is there any potential impact/backlash from customers? And when a company changes their pricing scheme, what happens to customers who were paying a former price/scheme?
Re: Doubling SaaS Revenue By Changing The Pricing Model
#4I always wondered how volatile your pricing scheme can be. Suppose you wanted to A/B test a pricing scheme - is there any potential impact/backlash from customers? And when a company changes their pricing scheme, what happens to customers who were paying a former price/scheme?
We had a few people pick up on this test (colleagues browsing on different machines) and they understood when we explained we were running a test.
I think so long as you don't try and cover it up and offer those who discover the choice between the new/old pricing, it shouldn't cause any problems.
Re: Doubling SaaS Revenue By Changing The Pricing Model
#5Happy to answer questions to the extent that I can. Speaking of which: if it isn't transparently obvious by now, I really, really like getting feedback about how my advice worked out. If you ever implement a suggestion from me (particularly with an A/B test), please, drop me an email. Even if the result was "Well, that was sure an epic failure", because negative confirmation is useful, too. (If you want to share resu…
Patrick, I've recently doubled my pricing across the board. To confirm Ruben's results, no change in trial/paid conversions.
Next step is disconnecting from "usage" (right now, plans are based on # of employees using the software, all plans have the same features) and moving towards plans based on the goals of the business: Do they need reporting? Are they comfortable being a solo freelancer working from Starbucks, or is the customer (or wants to look like) a big agency that needs a lot more flexibility?
Re: Doubling SaaS Revenue By Changing The Pricing Model
#6When I change pricing I always worry that current customers will be unhappy because they might have saved some money had they bought it later (I sell a desktop product).
Is this a problem you have seen youself when you sold desktop software?
Re: Doubling SaaS Revenue By Changing The Pricing Model
#7I always wondered how volatile your pricing scheme can be. Suppose you wanted to A/B test a pricing scheme - is there any potential impact/backlash from customers? And when a company changes their pricing scheme, what happens to customers who were paying a former price/scheme?
And when a company changes their pricing scheme, what happens to customers who were paying a former price/scheme?
Best practice -- and I'm shamelessly stealing this lesson from Joel Spolsky -- is to grandfather SaaS accounts in indefinitely if you raise prices. This a) lets you get a nice bump in sales if you announce the incoming price increase (no reason you can't do the A/B test quietly but announce the conclusion that prices are going up "loudly"), b) rewards people for taking the risk on you "early", and c) incentivizes them to keep their account active because if it lapses then they lose their super-sweet not-available-anywhere deal.
If I were to redo a pricing scheme in such a way that some customers would benefit from switching, I'd switch them automatically if the new pricing dominated their existing plan ("More quota for less price!") and tell them to make the call if it weren't obvious ("More quota for less price but this new plan doesn't have a particular feature that you may want to have in the future.")
Re: Doubling SaaS Revenue By Changing The Pricing Model
#8When I change pricing I always worry that current customers will be unhappy because they might have saved some money had they bought it later (I sell a desktop product). Is this a problem you have seen youself when you sold desktop software?
Why would you be lowering the price?
Regardless, just refund the difference for anyone who asks.
Re: Doubling SaaS Revenue By Changing The Pricing Model
#9When I change pricing I always worry that current customers will be unhappy because they might have saved some money had they bought it later (I sell a desktop product). Is this a problem you have seen youself when you sold desktop software?
Give anyone who complains a refund. Problem solved. (P.S. Not many people will complain, and you don't want the business of the ones that will.)
Though I'd wonder why one would be lowering prices when raising prices is just as easy and generally does better things for revenue.
Re: Doubling SaaS Revenue By Changing The Pricing Model
#10Happy to answer questions to the extent that I can. Speaking of which: if it isn't transparently obvious by now, I really, really like getting feedback about how my advice worked out. If you ever implement a suggestion from me (particularly with an A/B test), please, drop me an email. Even if the result was "Well, that was sure an epic failure", because negative confirmation is useful, too. (If you want to share resu…
What are your thoughts on trimming down the price options even further, e.g. one plan around $200/month, plus a "need more? we do custom plans, call us!" option?
Oh, and thanks for writing this, there's some really useful information here.