Fixed vs Success-based Pricing 🤷♂️ holding me back?
I recently released my Saas (https://raaft.io). Raaft helps you save your customers from cancellation by giving the offers to stay rather than just letting them exit. Even if they cancel, you always get feedback. The goal is to have a measurable impact on a churn.
Following the advice of many, I've been charging from the beginning. In an effort toward simplicity, I've gone with a flat rate based on MRR tiers. $40-$120. I've seen a lot of interest and had a lot of conversations, but adoption is slowwwww. Many have suggested that the pricing is high. I justify it by explaining the true cost of poor churn metrics and that even a small reduction has a major impact when compounded over time.
Still, I wonder if it would be more palatable to potential customers if pricing was based on actual customers saved - For example, if a customer is won back through Raaft, maybe the platform earns 10% of future charges to that customer for the next 12 months.
Can any of you who run saas products give me a sense of which of these models would make you more willing to hop onboard with a service like mine?
It is probably too soon to tell and you'll need to talk to customers to find out what is happening.
One thing to consider could be not to add a timed based trial but a value based trial. So for X (5? 10?) customer interactions rather then 14 days.
The trial period is there to test your product and you want your users to get to the 'aha' (I get it) but preferably 'wow' (this is awesome). For your product the wow is probably when you saved a customer from churning so you want users to experience that feeling. The problem is that this can take more then 14 days.
Giving me a value trial also gives me more confidence that the time I need to invest to set it up will be well spent, when I get 5/10 interactions I'll at least get something out of it.
I like where you're going in terms of the "wow" moment. In fact, the way my trial works is that the trial clock doesn't BEGIN until you've received that first interaction. That's why the trial is short. I want to minimize the time between "wow" and "I need to subscribe to continue".
Maybe I can communicate this better on the site.
It's been six days. Focus on marketing.
Haha! You just might be right ;)
What’s the average MRR of your customer base?
Answering your question directly: I'd like a very low monthly ($12ish) with a fee ($0.50ish) for each customer you save from churning.
A few questions come to mind:
Are you sure you're reaching the right customer segment?
If you designed the product for companies with healthy MRR but you're talking to idea-stage companies, you're going to get confusing feedback.
What are your customers 'hiring' your product to do?
If they are deciding between you and Intercom (like I did), you'll want to know that because Intercom's pricing will affect how they view Raaft's pricing (like it did for me).
Another thing: I'd try out a pricing sensitivity analysis. Here's a pretty good introduction.
https://learn.profitwell.com/l/en/article/tFfVQbtRnT-quantified-buyer-personas
Hey Luke - this sounds like a cool idea!
I'm not your target customer (yet)...but if I were, some pricing structure that is tied to how much you help me win back seems to make both our interests aligned.
I would not be a happy camper if Tribe of Five (www.tribefive.me for reference) paid for Raaft but didn't get results.
Good luck!
Your trial offer is too small or you could have free tier for small businesses below $10K. 14 days is nothing to see truly meaningful results. Encourage buyers by offering let's say 45 days trial (this way they will be able to see the whole month of lower churn, get that money to their bank account and then pay you your part).
Also, trail period part is just in the wall of text. It should be prominently exposed. I do not know if my credit card is required, if 14 days give me full access.
I would re-do the landing page a bit and use more conversion optimization. For now, the landing page is too bleak and not really exciting.