Ultimate Guide to SaaS Pricing
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Transcript of Ultimate Guide to SaaS Pricing
![Page 1: Ultimate Guide to SaaS Pricing](https://reader034.fdocuments.in/reader034/viewer/2022052514/58f9a812760da3da068b606a/html5/thumbnails/1.jpg)
The Ultimate Guide to SaaS Pricing
Lars LofgrenMarketing Analyst - February 2013
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@larslofgren #KISSwebinar
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We’ll cover...
Right and wrong ways to pick a price1
The two stages of pricing2
7 rules to give your pricing the edge3
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Price has a MASSIVE impact on your business.
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Bad Methods for Pricing
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1. Product cost + X%
You’ll undercharge some customers and overcharge others.
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2. What does the customer want to pay?
People have no idea until you ask them for their credit card.
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Pricing by Value
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Value-Based Pricing
Your customers get value worth $Y and it only costs them $X.
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Why does this work?
People cannot perceive absolute value, only comparative value.
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Some value is easy to calculate...
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Other value isn’t...
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Pricing - Stage 1
1
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Stage 1 is all about the unknown.
Customers don’t understand your product and you don’t understand
your customers.
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This is before product/market fit.
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The price you pick won’t be the best.
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Your goal = prove that the product can be sold.
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Pricing - Stage 2
2
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This is your growth stage.
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Time to optimize your price.
You’ll need a deep understanding for how your customers use your
product.
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Interview your customers
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The ideal price is...
Just high enough to need consideration but low enough to
still provide plenty of value.
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What if you have different customer segments?
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Separate segments with features.
Price sensitive customers get limited plans, value sensitive customers get the VIP plan.
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For this to be successful...
You need to talk to your customers and understand the benefits they
need the most.
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Capture the full value from each customer type.
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Bidsketch Case Study - Old Pricing
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Bidsketch Case Study - New Pricing
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Bidsketch Case Study - Results
Doubled average revenue per customer1
Only a slight drop in conversions2
No impact on churn3
Google “bidsketch pricing post”
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Seven Rules for Pricing
7
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Rule 1: End with a 9
$39 or $37?
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Rule 2: Make Your Price Short
$1,000.00 or $1000?
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Rule 3: Anchor Your Price
That product is $100, this is only $101
Was $150, now only $802
Value of $1500, selling for only $1503
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Rule 4: Offer Multiple Prices
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Rule 5: Double your Price
People tend to UNDERvalue their services.
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Rule 6: Be Careful With Freemium Plans
Very difficult to make it work outside of mass markets.
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Rule 7: Grandfather Old Customers In
As long as you don’t raise prices for old customers, you won’t get
any complaints.
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These are rules, not laws.
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Your 3 Tools for Getting It Done
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1. The Customer Interview
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2. A/B Testing
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3. Customer Analytics
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KISSmetrics helps you find the right price
Know who to interview1
Get A/B results from your whole funnel2
Track WHO’s doing what3
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VIP KISSmetrics Demo
go.kissmetrics.com/webinar-15
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Q&A Time!
For more info on KISSmetrics contactRossi Khoung
[email protected](415) 800-4156
Lars [email protected]
@larslofgren