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How to Price your SaaS Application – The Definitive Guide

34 points by paraschopra 17y ago

markkoberlein 17y ago
"The real number could be arrived by studying competition, market size, target audience, perceived value of your service and many other factors." It would be helpful if someone did a study on pricing plans of popular web apps and could show how the pricing models affected the overall success of the apps in their own markets.
- ahoyhere 17y ago
  There's so much more to it than price. For example, if a product has a good price, but poor targeting (saying "this is for you!" to a niche or type of person/business), or the net they cast for traffic is too broad (e.g. people from Digg), they are not going to have success selling plans, period. In other words: There's no price that is good enough to sell a boob job to a man, for himself.
  - markkoberlein 17y ago
    I agree that there is a lot more to it than price but it would be helpful when doing market research.
    - ahoyhere 17y ago
      No, it really wouldn't. Take, for example, the idea that Honeywell was trying to sell mainframes to house wives. They did -- everybody did in the 70s, because they were dumb as a box of rocks. Take the same mainframe and sell it to a bank. The data for the first attempted sale (housewives) would make you think "Gee, that price is too high! They're not selling." For the second, the price could be the same, but the audience would actually buy it. If you don't qualify whether a business is doing a shit job of targeting, your market pricing data is absolutely worthless.
- paraschopra 17y ago
  Since I am in deciding stage of pricing for my application, I studied the market and researched how pricing plans evolved for a SaaS startup. Shall make a blog post soon.
- jasonlbaptiste 17y ago
  We've started to collect "pricing urls" on Cloudomatic.com I've been thinking of doing a few things with all of these pages. One is: how many plans are there on average? How many have a free trial and average length? Average price for a saas app. Another is talking to a good chunk of startups and doing a: this is how you determine pricing white paper. What would be useful to you guys?
  - wizard_2 17y ago
    I'd say yes, but not because I know it will be useful, but because I think it would be interesting to compare people's marketing and customer segmenting strategies.
justindz 17y ago
From the title, I thought this was going to be more like "how to arrive at the price for your SaaS Application" but it's more like "how to choose the price model for your SaaS Application" which I think is actually easier and less interesting. Still a good summary for anyone interested in this topic who's been living under the ocean for a few years.
- mixmax 17y ago
  If that's what you're looking for here's a blogpost I wrote that explains how to use some basic statistics to arrive at exactly the price that maximizes your profits. http://www.maximise.dk/blog/2009/01/getting-product-pricing-right.html http://www.maximise.dk/blog/2009/01/getting-product-pricing-...
manojranaweera 17y ago
Hi, We are thinking about the same issue. Hence http://www.techcelerate.org/apr10workshop http://www.techcelerate.org/apr10workshop. Let us know if anyone fancy joining via video link?

34 points by paraschopra 17y ago

"The real number could be arrived by studying competition, market size, target audience, perceived value of your service and many other factors." It would be helpful if someone did a study on pricing plans of popular web apps and could show how the pricing models affected the overall success of the apps in their own markets.

ahoyhere 17y ago
There's so much more to it than price. For example, if a product has a good price, but poor targeting (saying "this is for you!" to a niche or type of person/business), or the net they cast for traffic is too broad (e.g. people from Digg), they are not going to have success selling plans, period. In other words: There's no price that is good enough to sell a boob job to a man, for himself.
- markkoberlein 17y ago
  I agree that there is a lot more to it than price but it would be helpful when doing market research.
  - ahoyhere 17y ago
    No, it really wouldn't. Take, for example, the idea that Honeywell was trying to sell mainframes to house wives. They did -- everybody did in the 70s, because they were dumb as a box of rocks. Take the same mainframe and sell it to a bank. The data for the first attempted sale (housewives) would make you think "Gee, that price is too high! They're not selling." For the second, the price could be the same, but the audience would actually buy it. If you don't qualify whether a business is doing a shit job of targeting, your market pricing data is absolutely worthless.
paraschopra 17y ago
Since I am in deciding stage of pricing for my application, I studied the market and researched how pricing plans evolved for a SaaS startup. Shall make a blog post soon.
jasonlbaptiste 17y ago
We've started to collect "pricing urls" on Cloudomatic.com I've been thinking of doing a few things with all of these pages. One is: how many plans are there on average? How many have a free trial and average length? Average price for a saas app. Another is talking to a good chunk of startups and doing a: this is how you determine pricing white paper. What would be useful to you guys?
- wizard_2 17y ago
  I'd say yes, but not because I know it will be useful, but because I think it would be interesting to compare people's marketing and customer segmenting strategies.

justindz 17y ago

From the title, I thought this was going to be more like "how to arrive at the price for your SaaS Application" but it's more like "how to choose the price model for your SaaS Application" which I think is actually easier and less interesting. Still a good summary for anyone interested in this topic who's been living under the ocean for a few years.

mixmax 17y ago
If that's what you're looking for here's a blogpost I wrote that explains how to use some basic statistics to arrive at exactly the price that maximizes your profits. http://www.maximise.dk/blog/2009/01/getting-product-pricing-right.html http://www.maximise.dk/blog/2009/01/getting-product-pricing-...

manojranaweera 17y ago

Hi, We are thinking about the same issue. Hence http://www.techcelerate.org/apr10workshop http://www.techcelerate.org/apr10workshop. Let us know if anyone fancy joining via video link?