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Pricing Low-Touch SaaS

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Re: Pricing Low-Touch SaaS

#51

Post by CodesInChaos »

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…

I don't see much difference between your "products" and "plans with different feature sets", except yours is priced per use instead of as a subscription.

Re: Pricing Low-Touch SaaS

#52

Post by Axsuul »

jmarbach wrote: post #16

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.

A business is always evolving. A business charges more initially so they can become default-alive. A business can then charge less and move downmarket with more resources. The greatest loss is a business going poof because they didn't charge enough in the beginning.

Re: Pricing Low-Touch SaaS

#53

Post by OJFord »

CodesInChaos wrote: post #51
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…

I don't see much difference between your "products" and "plans with different feature sets", except yours is priced per use instead of as a subscription.

Also, 'First 1,000 pages free, then'. GP - I can put this into columnar format for you, if you want...

Re: Pricing Low-Touch SaaS

#54

Post by pc86 »

teraku wrote: post #48
m12k wrote: post #31

Earlier quoted context omitted.

Also, if you can change the framing so the decision becomes 'which option should I go for?' instead of 'do I want to buy this at all?' then that's a valuable bit of sleight of hand. But it comes with the risk of decision fatigue

While this might be true from a sales perspective, I'm actually annoyed when there is a product I want to buy and then I see these tiers.

But how many times have you said "I was going to give you money, but now that you're giving me options on how much money to give you, I'm not going to give you any."

Re: Pricing Low-Touch SaaS

#55

Post by yjftsjthsd-h »

pc86 wrote: post #54
teraku wrote: post #48

Earlier quoted context omitted.

While this might be true from a sales perspective, I'm actually annoyed when there is a product I want to buy and then I see these tiers.

But how many times have you said "I was going to give you money, but now that you're giving me options on how much money to give you, I'm not going to give you any."

Wouldn't it be more like "I was considering giving you money, but if you're going to make me work for it then I'll reconsider"?

Re: Pricing Low-Touch SaaS

#56

Post by tchock23 »

PaulHoule wrote: post #3

A brilliant article. Often it seems that SaaS vendors don't have a plan for pricing but rather they design a "pricing page" that looks like the pricing page for other SaaS plans. If you start asking questions like: can you afford to offer this service at this price? what value does the customer get out of this service? they get defensive. I have refused to use SaaS services and I've refused to work for SaaS vendors b…

Great points here and a related anecdote:

Last year I came across a productivity app that I absolutely loved and signed up for the paid version right away. Unfortunately, they’re charging less than $5/month.

The service is buggy and infrequently updated now because you can tell the founder (solo dev) doesn’t make enough money on it to continue making upgrades.

If he had only charged more in the beginning the app would be both sustainable and growing.

I’ve learned my lesson and now run some back of napkin math on likelihood of success at that pricing before making a commitment to a service.

Re: Pricing Low-Touch SaaS

#57

Post by dternyak »

dubcanada wrote: post #35
tiffanyh wrote: post #34

Earlier quoted context omitted.

Thanks for sharing your company, https://siftrics.com I'd never heard of your company but this service looks GREAT. I wish you financial success. Question: your price points are sooooo low (which is great for the consumer) but I get concerned it's too low for your company to stay viable. Is that a concern? Please don't take this an me knocking your company. I really love what I've seen on your site.

What exactly is "soooooo low" about $0.50 for a 1000 pages?

If your customer is someone who previously had a team doing manual data entry, this pricing certainly leaves a lot on the table. I would imagine most customers being happy to tolerate a 10x increase in price without breaking a sweat, assuming there's no one else in the space offering a cheaper solution.

Re: Pricing Low-Touch SaaS

#58

Post by PaulHoule »

nemothekid wrote: post #45
PaulHoule wrote: post #28

Earlier quoted context omitted.

Frankly Netflix scares me and I am scared more by the proliferation of the Netflix model to video games. What I saw happen with television is that it went from a ratings based model (they had to make stuff people wanted to watch) to a model where the "cable bundle" was determined by cigar-chompers in a dark room somewhere. I can say I want this group of 20 channels, but I can't say I want CNBC but not CNN, Fox and MS…

> when I was a teen we watched music videos, but a 70-year old man bought the network and decided that he didn't want us to watch music videos. That's funny, but empirically that's not what happened. A quant working at MTV realized that reality TV like Real World, Jackass, and The Osbournes were way more lucrative and way more popular. At the same time music exploded in access (Napster). People voted with their eyeba…

I think the last part is right. In reality it is slow motion suicide to lose engagement with your customer.

That is, the industry would have transitioned to a "harvesting" model with increasing cable bills and fleeing subscribers no matter what the competitive threat (internet, netflix, ...) is. The competitive threat determines where the crisis happens, but the crisis is built into the product.

I don't believe it about MTV. I don't think anybody watches the Real World, Jackass, or the Osbournes. They read in the newspaper that somebody got killed acting out a scene from Jackass or they watch the highlight reel for the Osbournes on Entertainment Tonight. The meaning of that kind of television is not in the watching, but in being a subject for the rest of the media.

Re: Pricing Low-Touch SaaS

#59

Post by threeseed »

jmarbach wrote: post #16

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.

Charging less has the disadvantage of bringing in customers who statistically are more likely to need customer support.

Also no business should be run on a foundation of altruism.

Re: Pricing Low-Touch SaaS

#60

Post by wcarss »

dangrossman wrote: post #49
senko wrote: post #46

> Monthly: $49 / $99 / $249 So on the topic of ${X}0 vs ${X - 1}9 (ie. "50 vs 49", "100 vs 99", "250 vs 249"), what's the current "best practice"? I feel like we might be like those 5 monkeys with a banana: someone figured out long ago in some context that X9 might convert better, now everyone's doing it and the reason might not still be valid. I'd love to hear about some recent studies or comparative experiences rel…

I split tested $49/$149/$299 per month vs $50/$150/$300 and the 9's converted better.

I would love to hear more about the results of that test -- e.g. was it higher conversion for all categories, how much, did one category do particularly better with the 9's, was the distribution of category conversions similar on both sides, etc.
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