Those of you who offer SaaS subscriptions at different price points, what percentage of your customers opt for each level?
Those of you who offer SaaS subscriptions at different price points, what percentage of your customers opt for each level?
Having 3 different monthly plans at different price points is a common strategy. I'm interested whether most people opt for the cheapest plan or your designated "best value" (middle?) option? Has anybody tested how the distribution varies as you adjust the offerings?
Dan 👋 This really stood out to me!! - I've spoken about this quite a lot, I think you'll find this super useful... It's essentially expploring the physcology behind the price points -> https://paddle.com/software-launch/pricing-strategy/
Thanks, I'll have a read of that site.
Awesome :)
I'm usually a $9, $19, and $29 kind of guy.
I also tend to stick to $4.95, $9.95, and $19.95.
I'd say my "investors" people who really believe in the product and use it will pay the more expensive pricing, while people who just want others to take care of it, or they want very little to do with it, but still find it useful from time to time will pay the least for it.
I often offer a free tier, but limit it to just one product or one usage of the service. For example, I run a file storage CDN and sharing that grabs a lot of data with every click and even shows you the caching system of the server -- more people click your image, it's obviously cached. Anyways, for this, free tier can only upload one image and then they are done. They can delete that image and upload another, but if they don't know they want the service by then... well then, I'm fine not offering more on the free tier.
While I don't have any unique tests, I have a product in which I charge $2.95/month for and also charge by the minute per usage (it's a virtual number service) and I've had quite a few people who have signed up, usually from other countries.
The best way to calculate your pricing, besides comparing it to other services:
How much does it cost you to keep running the service and how much does it cost you to keep caring? Set your price points based on that. In other words:
"I need 5 people on my highest plan to pay for the service and make a little extra as well... but if I don't get that, I need at least 12 people on my lowest plan in order to pay my DRO (daily routine of operations)."
I've seen companies shy away from it, going for $7, $14, and $21, or something similar like that, but the psychology of 9 and psychology of 5 still work.
I remember Nathan Barry from Convert Kit did a great blog post 2 or 3 years ago on pricing...it was basically like make the middle one way above the lower one, and the premium only a little bit more than the 2nd one. That way more people would go for the top one b/c it was just a little bit more than the middle. I could be wrong on that. @NathanBarry
Thanks, I searched for articles by Nathan and found this (https://fizzle.co/sparkline/most-common-pricing-mistake), which looks like it might be what you were referring to?
Yeah I guess that's it! I thought it was on his personal blog but i couldn't find it
that's a tipical nudge that works very well when it's easy to compare the three options (like fast food drinks that offers small, medium and big size)
The results are going to vary wildly based on what you segment the pricing by, and your market. Let's say you segment by seats, one of the most common ways to break down value.
If you mostly attract solo customers, you are going to mostly sell solo customer plans. If you can attract large teams, you will mostly sell large teams. Generally speaking, there are way more single and small teams than there are large teams… but solo users also churn faster. It's all about what you do at the top of your funnel.