The most important thing to remember when building a pricing page

SaaS Pricing is hard - everyone struggles at the start.
I started doing research and fell down a rabbit-hole. Here's a summary of what I have discovered:

What's the pricing model I should use?

• There are so many things to take into consideration when coming up with a pricing model but one is the most crucial one: The "type" of pricing you're going to adopt:
  • Based on how many feature someone needs (tier pricing)
  • Based on amount of usage (credit-based pricing)
  • Based on how many users each account has (seat-based pricing)

Maybe the answer is: a mixture of all the above?

Examples:

Mailchimp and Slack use a seat-based model and prices vary depending on users and features: More features, more expensive the cost of each "seat occupied".

Companies like Heroku and AWS price on usage (storage, computing used, etc).

These are BIG companies, not indie hackers.

The answer for a company like the one you're building is probably a much easier one. Nevertheless, you just need to be aware of these pricing options listed above.

👉 As someone who has done extensive research into this field, the most important piece of advice I can give you when building a pricing page is: talk extensively with your early customers/audience/beta testers/Twitter followers.

It’s such a simple thing to remember, yet people tend to put it off .

Basically whomever you’re trying to sell the product to, will be the best source of information when packaging your pricing.

For example, if you’re a startup, the first step is to chat with your early users (assuming you have some).
These early users might be a couple of business owners, or a group of individual purchasers - they might not know how much time you’re saving them by providing them with a service - it's your job to understand this before you come up with a public pricing strategy.

Typical question to ask: What is the metric that you'd want to be charged on at the end of the month: [Usage, Seats, Volume, Features, Mix of/or other (ask to explain)]

Once you gather enough answers you will have a good idea how and what to charge for, but don't be naive.

How to price your product now that you have a model

There are some basic principles:

• You don’t want to price your product so that you push yourself out of the market
• You don't want to price your product so low that you're undervaluing your hard work
• You want to understand exactly how much VALUE you're unlocking for your customer persona
• You want to identify your “value unlocked metric”—what exactly is it that your customers are paying for that gives them value? For example if you're: RemoteOk - it's the amount of hosted jobs that are headhunted successfully through the platform.

And sometimes you want to "spy" on competitors to see what they're charging, always good ;)

Pricing strategy framework

I know there's a great framework (by Peter Van Westendorp and super relevant) that allows you to min-max your pricing and this is how it works:

Put all your product features down in front of your customer.
What do they value the most?
What do they value the least?

Once you identify these and rank them from highest to least you unlock what in the industry is called as value unlocked metric.

Value unlocked means how your customers unlock value from being a customers of your platform using your product(s) top features.

This way you will identify the top features which are super-valuable to your customer.

⭐️ This is gonna help you create pricing personas and thus pricing tiers!

The next step is to ask them how much are they willing to pay for that value.
Is it $1000 a month?

You're trying to uncover ⓸ things - that's right FOUR:

• When is it too cheap?
• When is it too expensive?
• When would you think about buying it but consider it not immediately a purchase, because pricey?
• When would you instantaneously buy it because the price is a bargain?

These are simple questions to ask in fact, for example:

"At what price would you consider "MYPRODUCT " to be a good value, that you would be interested in buying it immediately?"
or
At what price would you consider "MYPRODUCT" too expensive that it wouldn't make sense for you to buy it?

You get the point!

You need to gather a range of prices from your group of interviewees.
Once you have enough responses, it's plotting time - with Excel or so.

⭐️Find the price that is between the value at the intersection of too expensive and too cheap and bargain and consider it....and you're golden!

That is your base price for a plan that offers those core value unlocking features.

That’s it, that's your mission: find out how much they’re willing to pay before they think - “no, that’s not worth it!” and before "no, that doesn't sound good"

At the end of your analysis get your results in front of your customers once again.

Ask them if they would purchase a tier at the price point you've worked hard to establish - if they're still not giving you their 100% seal of approval you might still need some researching to do (aka. you need to ask why that is because it might be that you've not fully uncovered certain aspects of their buying evaluation)

Develop pricing tiers if you have multiple persona

As mentioned, from your analysis it might happen that different customers groups might value features you offer differently.

If you analyse your results and see this pattern, it means that you're on the right path to create pricing persona

Consider listing your pricing plans in a way that it makes sense to the group of persona you've discovered from talking to your customers.

Most people will have 3-4 plans because of various psychology reasons.
P.S. You can learn more about anchoring prices and other psychology of pricing UX/UI by googling!

Mixing it all together and baking the pricing page

When you write the copy for your pricing page, aim to tie three aspects of your pricing strategy together:

• Align your persona with your pricing page: don’t flood your customers with information they might not need (i.e. enterprise talk to startup consumers)
• Packaging tiers in a way that shows the rightfeatures based on customer group needs
• Price each package in a way that represent first and foremost the value for what your customers are willing to pay to unlock that value.

Hope this helps you unlock your inner pricing beast!
Happy to connect on twitter to chat further (link on my profile on IH)