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A few more tricks (I call it "red flags") I learned while running my small SaaS: - if you sell service for $10/month and user says "I would buy it for $5/month
by tlogan 13y ago
A few more tricks (I call it "red flags") I learned while running my small SaaS:
- if you sell service for $10/month and user says "I would buy it for $5/month" - that means he/she will not buy. Just do an experiment: for each customer which does that just give them discount for $5/month (even $2/month): nobody will come back and pay.
- if you sell service for $10/month and user needs to "to talk to somebody" before committing purchase: he/she will not buy. On other hand, if you have business / enterprise plan (which is like $3000/year) that is a good sign.
- lowering prices will not get you more paying customers
- start with "low" prices and rise it during lifetime of your company. Never go back.
- pkmehta 13y agoWhoa - this is so spot on. We get lots of I'd be willing to pay X and we always send them a link for exactly that amount. And they never pay. We even follow-up just to give them the benefit of the doubt and they still never do. Being the low cost provider for software (at least those targeted at corporates) is not the way to go. When people are spending OPM, it's more about the problem you solve for them then the cost. (note: of course, cost can't be insane but you get the idea. OPM = other people's money)
- destraynor 13y agoI agree with this and the parent comment. "Conditional" purchases are BS. The people who buy don't give you conditions. The people who give you conditions never buy.
- andrewflnr 13y agoDoes that last point include grandfathering in existing users on cheaper plans? If I'm an existing user, I'll be annoyed if my bill goes up, especially if it's a really big jump. But if prices go down, everyone is happy. If you start high, how big of a problem is it to go down? How much of my objection is just because I'm spoiled by the internet and haven't run a business?
- nedwin 13y agoGrandfathering is the best thing to do here. A good trick I've heard is to launch at a high price - say $100 per month - and do promos through marketing channels where you are quite liberal with discounts. This gives the perception of high value on a limited time offer while still making it clear what your price point is. You then make the discounts more and more scarce over time and for smaller and smaller amounts until you settle on optimal pricing.
- tlogan 13y agoI just don't increase prices to existing users. I'm not sure if that is the best way but a few other services I'm paying for do the same.
- epa 13y agoI think there is a danger of losing existing customers with price increases. I think price increases need to be very carefully thought out and reasoned to existing users. We are raising our rates not to make more money but because we are now offering you more value.
- DanielRibeiro 13y agoA few more here: http://conversionxl.com/pricing-experiments-you-might-not-know-but-can-learn-from/ http://conversionxl.com/pricing-experiments-you-might-not-kn...
- skarmklart 13y agoI am writing an ebook on how to find and develop SaaS ideas (http://howtofindsaasideas.com/ http://howtofindsaasideas.com/) Can I contact you and ask you some questions? :)