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Pricing Low-Touch SaaS

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Re: Pricing Low-Touch SaaS

#11

Post by michaelt »

PaulHoule wrote: post #5
siftrics wrote: post #2

>Reduce decision fatigue for customers. I am a huge evangelist of this piece of advice. I'm the founder of a startup that offers ONE price --- and free trial credits, of course --- for each product. I think it has helped us tremendously. The amount of startups I see that use the 3-column pricing plans (or worse!) is mind-boggling. Perhaps there is empirical evidence supporting complicated pricing. But I've never seen…

Much of the time I know I need to do 10,000 API calls and do them in the next week. I don't want to get "X API calls a month". I love the simplicity of AWS pricing where you pay for what you use -- except for the "free use" part which leads people to spend $5000 worth of time to save $5. (I would be richer than Jeff Bezos if I had a penny for every time somebody did something stupid or wasteful to stay within the fre…

This is the first time I've seen someone call AWS pricing simple :)

Re: Pricing Low-Touch SaaS

#12

Post by PaulHoule »

siftrics wrote: post #7
PaulHoule wrote: post #5

Earlier quoted context omitted.

Much of the time I know I need to do 10,000 API calls and do them in the next week. I don't want to get "X API calls a month". I love the simplicity of AWS pricing where you pay for what you use -- except for the "free use" part which leads people to spend $5000 worth of time to save $5. (I would be richer than Jeff Bezos if I had a penny for every time somebody did something stupid or wasteful to stay within the fre…

> if I had a penny for every time somebody did something stupid or wasteful to stay within the free use tier. You make a good point. I suppose it doesn't apply in quite the same way here, since we offer lifetime free credits --- they don't refresh each month. 1,000 free pages, then you have to pay.

Lifetime? Really?

I'll still be able to use this service in 2075?

Do you expect anyone to believe that?

Re: Pricing Low-Touch SaaS

#13

Post by corentin88 »

Some key learnings. But you should probably read it.

# Charge more.

- It helps keep low money, high support customers away. See "[pathological customers](https://hn.algolia.com/?query=patio11%20%22pathological%20cu...)" - "If an insurance company builds their entire business around [your SaaS product value] then that is a six figure deal, minimally." - Just charge more [[1](https://hn.algolia.com/?query=patio11%20%22charge%20more%22&...)] - SaaS entrepreneurs overestimate the benefit of low prices early - AppAmaGooBookSoft are doing their best to convince customers worldwide that software should be free (or as close at makes no difference) and subsidized by extremely lucrative advertising/hardware/e-commerce/etc ecosystems attached to it. That is a hard market expectation to go against.

# Pricing pages should continue the sales message

- The title of the pricing page should act like a sales representative. E.g. avoid "Plans & Pricing" or Transparent and Flat Pricing". Provide your value in the headline. - Reduce decision fatigue for customers. Up to 3 plans + contact us. Clearly distinct each value proposition - $X.99 pricing is not generally used in B2B or prosumer services because it communicates cheapness; I’d suggest you drop the 0.99 accordingly here, for aesthetic reasons - Lite / Standard / Premium are weak names for SaaS plans because they don’t help a user make an instant decision on which plan is right for them. - Don't use "Dedicated support". Use "Priority support" instead. Plus charge more for priority support. - No free plan on the pricing page - Name pricing plans to sell them to the right users. Avoid "Premium". Use "Hobbyist", "Small Store", "Sophisticated E-Commerce Retailer", "Enterprise" - You should only include the most salient details on your pricing page. If there is a difference between plans which is not salient to your customers or to you, it should not be a difference between plans;

# Others

- About removing the credit card / free trial : most B2B SaaS companies find that removing the credit card requirement increases the number of free trial signups they get but decreases the activation rate (the number of users who make material use of the software) and conversion rate to paying use. It is generally not worth it early in the lifecycle of your company. - All decisions about the pricing page are optimizations to approximate the value creation curve and charge for it. - Free is not a compelling value proposition to well-monied buyers.

Re: Pricing Low-Touch SaaS

#14

Post by PaulHoule »

michaelt wrote: post #11
PaulHoule wrote: post #5

Earlier quoted context omitted.

Much of the time I know I need to do 10,000 API calls and do them in the next week. I don't want to get "X API calls a month". I love the simplicity of AWS pricing where you pay for what you use -- except for the "free use" part which leads people to spend $5000 worth of time to save $5. (I would be richer than Jeff Bezos if I had a penny for every time somebody did something stupid or wasteful to stay within the fre…

This is the first time I've seen someone call AWS pricing simple :)

It is compared to the "pick one of three plans none of which make any sense".

I know investors like recurring revenue, I sure do.

For many things I have no idea how much I am going to use them in six months if at all, but it seems they feel compelled to price something at "$X a month" even if I just could spend $Y on it this week, solve my problem, and maybe buy some more later. I am thinking in terms of $Y.

There are just so many monthly bills out there that the only service anyone needs now is one that cancels all the services you don't use.

Re: Pricing Low-Touch SaaS

#15

Post by ultrasounder »

Here is another interesting take on purchasing power parity pricing model used by Wes Bos and Robin Weiruch to sell their digital products(books/courses). The idea is to have a single pricing for all your products but adjust the pricing based on where in the world you live. https://purchasing-power-parity.com/

Re: Pricing Low-Touch SaaS

#16

Post by jmarbach »

Patio11 is practically synonymous with the phrase "charge more" in the startup world, however, his catch phrase cannot be more misleading.

For most prospective customers, you should charge less. For a select few customers, you should charge way more. Upping the ante indiscriminately only continues to make the world even more unequal and inaccessible for the people who need your products the most.

Re: Pricing Low-Touch SaaS

#17

Post by cercatrova »

PaulHoule wrote: post #12
siftrics wrote: post #7

Earlier quoted context omitted.

> if I had a penny for every time somebody did something stupid or wasteful to stay within the free use tier. You make a good point. I suppose it doesn't apply in quite the same way here, since we offer lifetime free credits --- they don't refresh each month. 1,000 free pages, then you have to pay.

Lifetime? Really? I'll still be able to use this service in 2075? Do you expect anyone to believe that?

Lifetime of the company, presumably, not lifetime of the user necessarily.

Re: Pricing Low-Touch SaaS

#18

Post by [deleted] »

teraku wrote: post #9
siftrics wrote: post #2

>Reduce decision fatigue for customers. I am a huge evangelist of this piece of advice. I'm the founder of a startup that offers ONE price --- and free trial credits, of course --- for each product. I think it has helped us tremendously. The amount of startups I see that use the 3-column pricing plans (or worse!) is mind-boggling. Perhaps there is empirical evidence supporting complicated pricing. But I've never seen…

Haha I've built a very rudimental version of this for my personal documents. No grouping or categorizing of text areas, just PDF->OCR->Database. I do scan for letterheads, though, and save them in a separate table. A question, if I may: How big is your userbase?

[deleted]

Re: Pricing Low-Touch SaaS

#19

Post by PaulHoule »

cercatrova wrote: post #17
PaulHoule wrote: post #12

Earlier quoted context omitted.

Lifetime? Really? I'll still be able to use this service in 2075? Do you expect anyone to believe that?

Lifetime of the company, presumably, not lifetime of the user necessarily.

Thus it's meaningless. Put "lifetime" or "unlimited" into a pricing plan and the one thing I know is that neither I nor the vendor can think rationally and honestly about it at all.

Thus it is a reason to look for another vendor who shows signs of realistic planning. If I can pay $50 for something that costs them $25 and it is obvious that it is roughly like that, I know I am partnering with a 'sustainable' business.

Re: Pricing Low-Touch SaaS

#20

Post by IanCal »

PaulHoule wrote: post #19
cercatrova wrote: post #17

Earlier quoted context omitted.

Lifetime of the company, presumably, not lifetime of the user necessarily.

Thus it's meaningless. Put "lifetime" or "unlimited" into a pricing plan and the one thing I know is that neither I nor the vendor can think rationally and honestly about it at all. Thus it is a reason to look for another vendor who shows signs of realistic planning. If I can pay $50 for something that costs them $25 and it is obvious that it is roughly like that, I know I am partnering with a 'sustainable' business.

Seems like pretty realistic and sustainable planning to me, they give you at most 50 cents of credit to see if it works for you without a forced time limit.
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