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The Ultimate Guide to SaaS Pricing




 Lars Lofgren
 Marketing Analyst - February 2013
@larslofgren #KISSwebinar
We’ll cover...




1   Right and wrong ways to pick a price

2   The two stages of pricing

3   7 rules to give your pricing the edge
Price has a MASSIVE impact on your business.
Bad Methods for Pricing
1. Product cost + X%




       You’ll undercharge some
   customers and overcharge others.
2. What does the customer want to pay?




   People have no idea until you ask
      them for their credit card.
Pricing by Value
Value-Based Pricing




  Your customers get value worth $Y
      and it only costs them $X.
Why does this work?




    People cannot perceive absolute
     value, only comparative value.
Some value is easy to calculate...
Other value isn’t...
Pricing - Stage 1




     1
Stage 1 is all about the unknown.




   Customers don’t understand your
   product and you don’t understand
            your customers.
This is before product/market fit.
The price you pick won’t be the best.
Your goal = prove that the product can be sold.
Pricing - Stage 2




     2
This is your growth stage.
Time to optimize your price.




   You’ll need a deep understanding
   for how your customers use your
                product.
Interview your customers
The ideal price is...




        Just high enough to need
     consideration but low enough to
       still provide plenty of value.
What if you have different customer segments?
Separate segments with features.




      Price sensitive customers get
      limited plans, value sensitive
       customers get the VIP plan.
For this to be successful...




  You need to talk to your customers
   and understand the benefits they
           need the most.
Capture the full value from each customer type.
Bidsketch Case Study - Old Pricing
Bidsketch Case Study - New Pricing
Bidsketch Case Study - Results




1   Doubled average revenue per customer

2   Only a slight drop in conversions

3   No impact on churn


     Google “bidsketch pricing post”
Seven Rules for Pricing




        7
Rule 1: End with a 9




             $39 or $37?
Rule 2: Make Your Price Short




    $1,000.00 or $1000?
Rule 3: Anchor Your Price




 1   That product is $100, this is only $10

 2   Was $150, now only $80

 3   Value of $1500, selling for only $150
Rule 4: Offer Multiple Prices
Rule 5: Double your Price




    People tend to UNDERvalue their
               services.
Rule 6: Be Careful With Freemium Plans




      Very difficult to make it work
       outside of mass markets.
Rule 7: Grandfather Old Customers In




    As long as you don’t raise prices
    for old customers, you won’t get
             any complaints.
These are rules, not laws.
Your 3 Tools for Getting It Done
1. The Customer Interview
2. A/B Testing
3. Customer Analytics
KISSmetrics helps you find the right price




 1   Know who to interview

 2   Get A/B results from your whole funnel

 3   Track WHO’s doing what
VIP KISSmetrics Demo




go.kissmetrics.com/webinar-15
Q&A Time!
            Lars Lofgren
        llofgren@kissmetrics.com
               @larslofgren

For more info on KISSmetrics contact
           Rossi Khoung
        rkhoung@kissmetrics.com
            (415) 800-4156

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