ProfitWell's Price Intelligently team publishes data-driven SaaS pricing analysis, page teardowns, and a long pricing strategy guide.
Commenters point to its in-depth, data-based pricing guide, and note that the content supports the company's pricing consulting business.
First of all, a disclaimer: ask a pile of interested people very carefully before deciding on prices; people suck at accurately saying how much they'd pay for something, and that almost certainly includes me. :) If you want to get fancy about it, take a look at https://en.wikipedia.org/wiki/Van_Westendorp%27s_Price_Sensitivity_Meter , and perhaps http://www.priceintelligently.com/ ; if you don't want to get fancy about it, just make sure you talk to more than a few people.
That said: I actually think $4 would work nicely as a "project" price, and for more along the lines of 1 week rather than 2 months. That would nicely cover immediate one-time pain like the case I ran into. $4 falls squarely in the category of "yeah, I'll pay that to solve this problem today", and I'd have paid that just for the 1 day I needed to use it.
If you feel like you can comfortably serve people at $4/month, I'd absolutely pay that price without hesitation; $7/month seems reasonable too. Perhaps you should just treat that as the "project" case, and market it so that people think of it more as a "pay once and use it for a month" price than something they necessarily have to pay repeatedly for via a subscription. I think that'd make more sense than trying to go off the beaten path by talking about weeks. :) (Most "monthly" services don't really cater for the case of "let it lapse, then start paying again when I need it", but in the case of this project I think it would work beautifully to do…
Please excuse, if my comments come off as presumptuous or overbearing, you certainly know your business and customers better than I do, I’ll just rattle off what my set of fresh eyes observed and what I think you might want to look into.
In general, what stands out to me is that you do not have a clear USP and you do not seem to speak your target markets language, it might be that since you are addressing markets in many different verticals that you have no clear persona in mind to convince with your copy, no specific set of pain points or benefits to address directly.
In any case, I would try to interview my current customers, ask them to describe in their own words how your software is helping them, what pain they were experiencing before and how they previously dealt with it.
Then you can go about ‘cloning’ them by marketing to specific verticals, have landing pages for hospitals and retailers, agencies and address problems specific to these industries using the information and sound bites you mined from your customer research.
This will also allow you to do some long-tail SEO, produce relevant white papers, tailor your testimonials and in general tighten your copy since you now know who you are talking to.
Take a look for instance at your benefits, they are not benefits, at best they are product features: “Reminders & Communication”, and some are not even that: “No Install Or Setup”. How about “Never fail audit xyz again with our bullet employee foozle tracking…
Hey Marktangotango,
Patrick from Price Intelligently here. We think about this stuff all...the...time.
Overall, it's fairly dependent on the product you're selling, but considering what you mentioned check out these links:
1. The Saddest SaaS Pricing Pages of the year: Goes through a lot of general information on setting up your SaaS pricing, particularly on throttling your value metric appropriately: http://blog.priceintelligently.com/blog/bid/192297/The-Saddest-SaaS-Pricing-Pages-of-the-Year
2. A Study of the Top 270 SaaS Pricing Pages: Go into a breakdown of pricing pages as well as a bit of a how to: http://go.priceintelligently.com/saas-pricing-blueprint
3. Developing Your Pricing Strategy: Ebook on developing your pricing strategy in general: http://www.priceintelligently.com/
To answer your questions though, it's a tradeoff on simplicity versus spurring upgrades. Companies like Wistia.com have a lot of success with giving it all away and charging strictly on the throttle, whereas companies like Uservoice.com need to utilize differentiation because of their value metric.
Feel free to send an email if you want to talk live about this: patrick[at]priceintelligently[dot]com
I think expecting a seller to make sure they have the lowest price compared to other sellers is ridiculous.
It’s not a seller’s job to make sure the buyer is getting the lowest price. It’s not possible for a seller to know every single other seller’s price so I don’t see how anyone has a reasonable expectation to that in the first place.
People like to THINK they are getting a discount. They don’t care that the actually are. Clear evidence is JCPenney trying to offer people the best price without discounts:
https://www.priceintelligently.com/blog/bid/152018/lessons-from-the-failure-of-j-c-penney-s-new-pricing-strategy
It’s how Kohl’s and Bed Bath And Beyond survive. Consumers rewarded sellers that offer 80% off ridiculously marked up items versus JC Penney who tried to offer an “honest” market price, and they forced JC Penney to engage in “deceptive” sale pricing again.
Look at the value you create, not the cost. In SaaS margins of 90% are possible if remove your time in the calculations. In B2B the decision maker has the same work with getting approval, adding you to their supplier list, dealing with their accounting department or filling out forms for $5 or $50. I'd even argue per-seat price model has disadvantages because the invoice amount might change month-to-month and requires additional re-confirmations of the customer's accounting department. Start with a higher price (be confident), you can always lower later or offer (time limited) discounts. $5/month is zero when you have to deal with 1-2 support emails, the first 12 months is zero when you have to do one Skype sales call.
Lots is written about SaaS pricing, it's complex. https://www.priceintelligently.com/blog/ has a decent blog on that topic (and free ebook I seems).
Yes. not necessarily. Once you are able to observe active users, have paying users or even sizeable traffic to test conversions.
You can experiment to find out what that "right" or "best converting" price point would be.
"Free to start" may very well end up being the answer. Here are 2 examples one from pubilshing and one about starting with a price and using data to uncover insights about the "right" price. You will see the 30 cents is not the biggest problem you are going to have in pricing. :-)
- https://www.priceintelligently.com/blog/new-york-times-pricing-page-teardown
- https://www.priceintelligently.com/blog/netflix-pricing-strategy