Nathan Zaru
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Better SAAS pricing strategies

7/4/2012

 
Selling your software online is hard, even the most beautifully designed website will be ineffective if your sales page is totally screwed up.  This is what most startup SAAS pricing pages look like to me.
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Unintuitive = ineffective. Ineffective = no sales.  Here are some strategies to make your website a more effective sales tool.

Use real metrics people understand
Proprietary metrics are not impressive, they are confusing.  Most of your customers don't care what it takes to get the job done, all they care is that you get the job done and you do it well.  Structure your pricing according to core business metrics your customers already track and understand to maximize the chance of a sale.  I really love how Custora bases their pricing on the number of customs you have.
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Focus your pricing into one real metric
Even if you do price your software according to dozen of variables, keep the customer facing options as dead simple as possible.  Give your customer one price based off a simple metric they understand.  If you do have to tier your service, tier it off of different levels of exactly one variable.  Your goal is to make it as easy as possible to say yes to a great offer.  With each extra variable in the pricing equation you will add another question the end customer has to consider.  A "no" anywhere in the funnel will result in a sale of 0.  Optimize for one YES and get the credit card.  Props to WePay and my former boss, their Director of Marketing, for such a focused pricing solution.  It's easy to understand and really stands out against their competition.
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Give them everything they need to be successful
If you build a product, it should be great.  And if it's great why wouldn't you want your customers to use every awesome feature?  This may be my most controversial point:  include all features at every level of service.  I'm crazy you might say, a sure fire way to go broke right?  Nope.  Just price your packages according to the highest possible use case at each level, then add on top the margin you wish to earn.  Yes, that means you will make more money of customers who use your product less, or conversely, less money from customers who use your product more.  But this is intrinsic to other technology models we already know like internet service, cell phone data packages, and satellite TV.  The corollary here is if a feature is not cost effective or worth offering at every level of service, you need to kill it.  There is one specific exemption from this rule -- super premium features.  Do not factor them into any standard offering but definitely do offer them to any customer who is serious about an upgrade.  Just be sure the features are in fact super premium, it's not worth making huge promises for an incrementally better product.  Virb is a great example of an elegant pricing solution. They give you all their great features at one easy to understand price.  
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You are a startup:  you need more traction, more customers, more runway.  Your company is a nightclub and your product is the party.  Don't worry about different kinds of tickets, just make sure it's a great party for everyone. Even better if you can get them talking about it tomorrow.  

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9/23/2012 04:26:18 pm

A good blog with exciting content, that's what I need. Thank you for keeping this site

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10/20/2012 04:57:54 pm

Nice post and examples. Thanks, Nathan.

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