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Pricing Your Product

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Re: Pricing Your Product

#71

Post by eruci »

IAmGraydon wrote: post #59
eruci wrote: post #33

Pricing is HARD. I launched a SaaS in 2016 with a 100eur per month recurring plan. only 5 signups in two years. Then around 2018 someone wrote me "that's incredibly cheap. why?" So, I doubled it to 200eur per month. Today there are 60 recurring plans at 200 per month, and only 3 @100(grandfathered plans from the early days.) Clients tend to think that if something seems too cheap, something is wrong with it.

Did anything else besides the price change since 2018?

Also, at the end of 2018, based on their feedback, I added a "pricing" & comparison page: https://geocode.xyz/pricing

Re: Pricing Your Product

#72

Post by formercoder »

lpolovets wrote: post #38

One of the biggest lessons I've learned as a VC in the past few years is that pricing really has to be aligned with and proportional to the value your product provides. If someone gets $100 of value per seat and you charge $15/seat, that's great. If you charge $15/seat for a product that creates value per gigabyte, people start gaming the system. E.g. they'll buy one seat for their company and ask that person to be t…

If someone gets $100 of value per seat, and you charge $15, why is that great? Are you leaving money on the table or facing competition? And shouldn’t you react strategically to either situation?

Re: Pricing Your Product

#73

Post by hammock »

formercoder wrote: post #72
lpolovets wrote: post #38

One of the biggest lessons I've learned as a VC in the past few years is that pricing really has to be aligned with and proportional to the value your product provides. If someone gets $100 of value per seat and you charge $15/seat, that's great. If you charge $15/seat for a product that creates value per gigabyte, people start gaming the system. E.g. they'll buy one seat for their company and ask that person to be t…

If someone gets $100 of value per seat, and you charge $15, why is that great? Are you leaving money on the table or facing competition? And shouldn’t you react strategically to either situation?

It's not about the numbers. The point is being made about the metric (per seat vs per GB, etc)

Re: Pricing Your Product

#74

Post by zoomablemind »

Good read, emphasizes an importance of figuring out a customer-perceived value of your product.

Sidenote: reading it was very much painful on eyes, at least on my phone screen. That thin font looks almost like a watermark. Maybe it'd be better on a laptop screen.

Re: Pricing Your Product

#75

Post by dolguldur »

bobbyz wrote: post #39
lpolovets wrote: post #38

One of the biggest lessons I've learned as a VC in the past few years is that pricing really has to be aligned with and proportional to the value your product provides. If someone gets $100 of value per seat and you charge $15/seat, that's great. If you charge $15/seat for a product that creates value per gigabyte, people start gaming the system. E.g. they'll buy one seat for their company and ask that person to be t…

I just spent my last audible token 5 minutes ago D:

Guess what, you can get 3 tokens for around $35, so one token will be cheaper than the average prices (anchors) you'd otherwise pay.

Re: Pricing Your Product

#76

Post by reubenswartz »

This is a helpful article and I would add to the general "value-based" pricing discussion:

Price is limited by perceived differential value.

So if there's value that the buyer doesn't perceive, it doesn't count. (Often, there's value that the buyer perceives and you don't in the SaaS world.)

If there's perceived value, but you charge $1000 and someone else offers the same perceived value for $100, it's going to be hard going.

This feeds back into understanding your customer subsegment really well. In the example above, perhaps the general market thinks you are at -$900, but for your niche, there are some critical aspects that make it worth much more.

Another corollary is to offer different price points, all aligned with how the buyer perceives value, such that you're happy with whatever choice they make.

Re: Pricing Your Product

#77

Post by laurentb »

cameronbrown wrote: post #37
kbos87 wrote: post #36

Earlier quoted context omitted.

Maintaining that book of past prices, who is on them, the discounts they negotiated, the feature formulation they had - its a nightmarish web of complexity even at large SaaS vendors.

I really can't imagine why. This seems like one of those self contained problems where some PricingService and a DB returns a number and deals with all the complexity internally. That seems like the logical place where you'd do A/B testing of prices and the like.

What you're missing is thaton the sales side of things, most of these price discount or variation are only really included in the quotes and not on the crm itself.

This is primarily (imho) because most companies (whether SaaS or other) start their CRM journey with the basics and only end up with some sort of CPQ or quote to cash at a later stage.

Re: Pricing Your Product

#78

Post by paulcole »

DanBC wrote: post #65
paulcole wrote: post #18

Earlier quoted context omitted.

I found this to be quite readable. Nicely designed site!

It's useful to compare the desktop and mobile versions. On desktop it's nice. On mobile it's unreadable for many people - so much so that I think it'd be breaking some disability accessibility laws.

Correct me if I’m wrong but as of April 2020 there is no legal definition for what makes a website accessible. Seems like WCAG 2 is referenced in some court cases but is not a law.

Re: Pricing Your Product

#79

Post by koolhead17 »

When it comes to pricing I relate it with Jobs to be Done. Pain, desire to progress and willingness to pay as a prime lever.

Whatever pain you are solving, if customers have no money they are not going to buy the product.

If customer has no desire to progress, they will stick with existing software even your product will make like 100X better.

Re: Pricing Your Product

#80

Post by laurex »

skmurphy wrote: post #51
lpolovets wrote: post #38

One of the biggest lessons I've learned as a VC in the past few years is that pricing really has to be aligned with and proportional to the value your product provides. If someone gets $100 of value per seat and you charge $15/seat, that's great. If you charge $15/seat for a product that creates value per gigabyte, people start gaming the system. E.g. they'll buy one seat for their company and ask that person to be t…

The First Round post “Madhavan Ramanujam–It’s Price Before Product. Period” captures about 80% of the value for startups so I would start there. Its at https://firstround.com/review/its-price-before-product-perio... I reviewed the book when it came out and extracted "9 Rules for Monetizing Innovation" at https://www.skmurphy.com/blog/2016/11/16/nine-rules-from-mon... There are better books on pricing: for a straight…

I've been working on a pricing project using a methodology largely influenced by Nagle's work. The premise is that it's possible to learn what customers value before pricing something and for the price to be optimized around customer value, and perceived value. It feels much more promising than other pricing projects I've been involved with. This podcast gives an overview of some of the thinking here: https://impactpricing.com/podcast/ep46-alan-albert-why-much-...
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