Pricing

SaaS pricing is a complicated area as conventional pricing methodologies are not fit for purpose. Pricing needs to be aligned with value, and decisions relating to pricing tiers (versions), monthly v annual fees and bases for moving between tiers are important decisions that typically do not get the attention they deserve. One person who has helped to surface the various nuances that need to be considered when pricing your SaaS application is Patrick Campbell of Price Intelligently.

The following resources will help you optimise any pricing decisions for your SaaS application. Finally, a key theme of Campbell’s is the need to revisit pricing on a regular basis.

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Challenging Performance Pricing

Conceptually, performance pricing is very rational. The buyer should be willing to pay between 10 to 15% of the revenue or cost savings for the use of the product. And as classical economics instructs us, this type of pricing mechanism optimally aligns the incentives of the buyer and the seller. But the reality is more nuanced.

Another point worth adding to the mix is that it can also cause problems for buyers. Most Finance departments are simply not used to this sort of pricing mechanism and the inherent uncertainty it contains so are often not keen on it!

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10 key elements to help with your SaaS startups pricing strategy

Decisions regarding pricing are of crucial importance for SaaS businesses. The first decision point usually relates to whether you are contemplating a Freemium offering or choosing to charge from the off. The pro’s and con’s of launching with a Freemium offering are well documented but regardless this decision warrants some thought.

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Lessons from the top 5 SaaS pricing pages

Your pricing page is your goal line; the almighty point at which a buying decision is made and you as a business leader either put numbers up on the scoreboard or flounder under the weight of another sale lost.

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Stop per user SaaS pricing; you're killing growth

In the early 1990s USI said, “let there be the ASP” and at that very moment the cloud was born, fulfilling the dream of IBM’s 1960s experiments with utility computing. For the first time, the small seeds of SaaS began to grow. Developer collaboration reached new heights and features could be delivered almost instantly, leading the charge for Salesforce, Oracle, and the ever ironic “No Software” movement.

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SaaS pricing page design: highest price on the left?

SaaS pricing page design is always evolving, and when I created the Pricing Page Success Formula for SaaS and Web Apps in 2009, the jury (me) was still out on whether placing the high priced version of your product on the left and moving lower to the right really mattered.

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Insightful study of 386 SaaS startup pricing pages

Late last year, I combed through the Montclare SaaS 250 — a directory of the biggest SaaS companies in the world — to find common trends in what I thought would be a significant dataset. As it turned out, 80% of the 250 biggest SaaS companies didn’t have a pricing page at all.

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The price is right: for early stage SaaS companies it needs to be

Nothing is more critical to a software-as-a-service (SaaS) business than pricing strategy. Pricing is the moment of truth for a new product … and doubly so when it is a company’s first product. But far more often than not, I’ve observed new startups leaving “money on the table” when it comes to pricing enterprise products.

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Camels and rubber duckies

You’ve just released your latest photo-organizing software. Through some mechanism which will be left as an exercise to the reader, you’ve managed to actually let people know about it. Maybe you have a popular blog or something. Maybe Walt Mossberg wrote a rave review in the Wall Street Journal.

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There are only 3 pricing strategies for your startup

Pricing. Is there any word that confers some whisper of dark arts than pricing? Or any question that instills less confidence than, “How did you derive your pricing strategy?” Many times, startups replicate and tune competitors’ pricing strategies. If everyone else prices per seat, then so should we.

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The obscure economic idea behind SaaS pricing challenges

Startups struggle to set the right price for their products because pricing dynamics in the field don’t obey the laws taught in the classroom. The standard supply and demand curves, drawn above, imply that as price increases demand decreases; that buyers act rationally and that this law is immutable. But this simply isn’t the case. Buyers in the market place violate the traditional supply and demand model all the time.

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Freemium model for SaaS - the good, the bad, and the in-between

n 1999, Vistaprint, a four-year-old French startup, launched its internet-based printing services in the highly competitive US market. Going against the popular advice to target the bigger companies (who would spend more money on printing), the Vistaprint team went for the micro businesses (who were then considered as a terrible market, as they were close to impossible to reach).

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