Seeking feedback on some ideas around SaaS pricing software
tl;dr: Would you be interested in purchasing pricing optimization software to automatically A/B test your pricing page(including prices, design, copy, etc.)?
Pricing is a hugely important part of a business but in my experience, most companies are just kinda taking a stab in the dark. They might ask a few customers about it, and look at competitor's pricing, but they don't really take a scientific approach to it and generally, they set prices initially and then just stick with them for a long time.
So I'm interested in a service that automatically tests and optimizes pricing. Value prop is that business owners can be confident in their pricing. They can test different pricing models, find prices that maximize margin and communicate clearly about their pricing, without spending their time on it.
For a while, I have been thinking about a product that would be a simple way to get your pricing page up and running(Something like moonclerk.com or plasso.com, with a focus on a well-designed pricing page.) Then I listened to the RankScience podcast which got me really thinking about the possibility of automated optimization for pricing.
So I'd just love to hear your feedback on pricing related products, would you buy any of these things:
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A pricing page service where you can setup plans and start charging on a themed pricing page within 10 minutes? Maybe with some a/b testing tools built in. (StatusPage.io for SaaS pricing pages.)
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A pricing audit service. A report on your pricing page, comparison with competitors, suggestions for improvements and suggestions for A/B testing. (A less expensive price consulting product, somewhere between priceintelligently.com and theuserisdrunk.com)
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Done-for-you pricing optimization, where a service continuously experiments with your pricing page, plans, and discounts to optimize your revenue or margin. (rankscience.com meets priceintelligently.com)
Thanks for your time. I love IH!
Hi John!
This is an interesting idea. I've run a small SaaS that's fluctuated between $1000 and $3000 p/m so that's where I'm coming from.
Firstly - I agree pricing is such a stab in the dark. There are so many competing ways to approach it. And when you follow one of them and price higher you end up looking at your competitor and wondering if them pricing lower is an advantage for them.
At one point I tried moving from "prices that seem reasonable for the value created" to following the "always price higher thank you think approach" and it seemed to work well. Then after a new entrant started outranking us in google and posting lower prices I decided to match them price-wise and try compete on features. I honestly still have no idea whether what I've done was right at any of these inflection points.
So I feel like you're approaching a pain point. Some other things to note though - firstly, I never got enough traffic to A/B test with tons of confidnce. When you're only at a couple k $p/m and your product is $29 - $89 kind of range you're not getting that many signups that you can easily do super confidence inducing A/B tests. That said there are enough > $5k p/m SaaS that probably would be able to do these tests in a reasonable amount of time with reasonably consistent source traffic to get a good idea of what's having an effect.
Finally, the other thing is that gyrating prices too much can get irritating from a customer support perspective. If your system is good it shouldn't be too much of a hassle tech wise - but having customers emailing with concerns of "is my plan going to increases to the new price?" and "what the hell, the price is lower than before?" can be frustrating. After one experiment I wanted to automatically drop everyone on a certain plan to a lower price but my payment provider wouldn't let me. I had to just wait and show them how to create a new subscription when they mailed in...
So of your options I really like 2 and am not so sure about 1 and 3.
Thanks for the feedback Mark. Much appreciated.
I agree I think a company needs to be doing 50k+ /mth for a continuous optimization product to make sense for them. But I really like that market, and helping companies like that grow, so that's why I'm keen on this concept.
Your last point is also my greatest concern. Varying prices could really throw people off if they are considering a purchase or already a customer. For one-time purchases, it's no big deal, but for a subscription business, it gets messy. This challenge also makes it really interesting to me, and I'm willing to start very small(along the lines of option 2) and incrementally work on solving the problem in more complex ways.
For a report style product like option two, what type of data would be most interesting to you?