29% more revenue because of this!
Do you see that spike in the graph?
This was a period of 3 months in which we experimented with different pricing strategies.
I don’t like to call it “hacks.”
But in this case, it really was.
The thing with pricing:
It’s never a constant.
Your product evolves.
The market evolves.
Your customers evolve.
So, why not your pricing?
In this post, I'd like to share 3 Pricing Hacks.
3 pricing “hacks” that worked very well for us.
In fact, they brought us 29% more conversions (!)
I'm sharing more strategies I learned while building and scaling my 7 figure SaaS products in my course (usually $149, but for Indie Hackers, it's $99 + free community access -> https://www.zerotosaascourse.com/deal 🤫)
So, let's discuss these 3.
- Scare customers off with a high-pricing plan!
Say that again?
Yes, you need a pricing plan that scares customers.
Just like restaurants do by listing some very expensive wines on their menus.
The psychology behind it is that it lowers the bar for the other pricing plans.
If someone sees a $1,000 wine, the others are between $100 and $500…
The $1,000 wine will scare them off at first,
But they will actually be relieved when they see the 500-dollar one!
The same goes for every pricing strategy.
Seeing an expensive plan on the same list as 2 less expensive ones will automatically lower the bar for signing up for those.
- Always use 3 plans (not 2)
You’re missing out on revenue if you only offer 2 pricing plans!
Why?
Because by doing so, 90% of people will go for the smaller plan of $99.
If you’d add a third plan of $500, that’s way more expensive than the other ones.
A different mind game comes into play.
Instead of now going for the lowest tier.
People will actually choose the middle plan.
Simply because they don’t want to pay too much.
But they also want to go for quality.
And by simply adding this high-tier plan.
The middle plan suddenly looks like the best option.
And thus, you’ll sell more of those.
And make more revenue!
- Play with your Middle Plan!
So, as you just learned, you need to work with 3 plans.
A small, middle, and large.
The funny thing, though.
The middle one actually determines how much you sell.
If you want to sell more of your large plan.
You have to raise your middle plan, so your large one looks like a “steal.”
But if you want to sell more of your middle plan.
You have to raise the gap between the middle and the large one.
So the middle plan actually looks like the more reasonable price to go with!
What’s the best pricing strategy in general?
Simply put: it doesn't exist.
Pricing is never constant.
It's different for every product.
Trial and error.
So much info. Pricing strategy is a bit tricky and trial and error is the only way to know what the best.
One mistake that people often do is pricing the product based on the costs. They often forget supply and demand.
You product should worth what it can give and what the market willing to pay regardless of the cost. If cost determine the price, inflation will never happen. So if you want to charge high for a product make something worth the price.
Here is an article talking about tips to price your product : How to price my product? Value based pricing
Interesting style of writing a post
Tricky 😉
Very helpful! :)