How do you price your SaaS product?
Hi there, I’m a first time entrepreneur starting out in the SaaS industry and wondering if there’re any good advice on what gauges would you rely on to price your SaaS product?
Hi there, I’m a first time entrepreneur starting out in the SaaS industry and wondering if there’re any good advice on what gauges would you rely on to price your SaaS product?
There's a lot of great comments here.
PriceIntelligently does have a great eBook--I've read it and taken extensive notes--but it's a bit long and might overwhelm you if you're just looking to take your first stab at pricing.
The first thing I would recommend would be to read this short blog post to give you a basic idea of various SaaS pricing strategies. If there's anything unclear--let me know, I wrote it : )
Then, if you want to actually walk through each of those strategies and apply them to your pricing situation, I've helped create a free "SaaS pricing bootcamp" of sorts. You can find it at the bottom of that post.
I'm happy to provide more personal feedback too if you leave a link to your site.
This comment was deleted 8 years ago
Thank you! Great comment as well.
As long as you will make profit, any amount that will be okay for you and the client is good
The bigger the business, the more they pay. 🙂
PriceIntelligently has a great ebook that dives into this topic: https://www.priceintelligently.com/saas-pricing-strategy-ebook
I can second this — it's a great compilation of (all?) their blog posts. The gist is to figure out (via surveys or talking 1 on 1):
Hopefully you find that certain segments value certain features that others don't. That's how you come up with your different plans (highlighting the features each segment thought was important in each corresponding plan).
You come up with your price for each plan by creating a price sensitivity meter for each of your segments using the answers to the 4 key questions above.
Thanks sankalp! Gonna give it a read now
Don't think about it too much... price it high enough that its significant for a user, but not so high that its difficult to sell at that price.
A good price could be $19/month
If people pay at that price, keep increasing it each month/few months until there is a drop off - that should give you an idea of how valuable people find the product
Price increasing is a good strategy, but to begin with a fixed price of $19 for every kind of product, I think it's not the perfect idea.
Also I think you should set the price increasing for new members only. Cuz if you do it for existing members their will wondering about the new price and maybe cancel the subscription.
Yeh $19 was just an example price - do what feels right for your product obviously :)
and yes, I didnt say this but keep prices grandfathered for your earlier customers
Okay I understand :)
Thanks Ben for the advice! I might actually do this because it’s really hard to come up with a price based on so many different cost parameters in starting a Saas biz
I think a big deal is the general company costs in your calculation. The company costs concerns much things like employees salary, rent, etc.
Costs of development for your product is also a big deal in your price calculation.
I’m currently on my phone but I can send you more information when I’m at home.
Best Patrick
Hi Patrick, thanks for your help. Looking forward to your info.
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Thank you Mick for the heads up. For me personally, a business’s profitability should be based on data and facts instead of intuition, otherwise it will just be a hobby.
It’s a case of almost life and death, for the price you put out at the start would likely to haunt you or propel the business later on.
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This comment was deleted 8 years ago