>Reduce decision fatigue for customers.<p>I am a huge evangelist of this piece of advice. I'm the founder of a startup that offers ONE price --- and free trial credits, of course --- for each product. I think it has helped us tremendously.<p>The amount of startups I see that use the 3-column pricing plans (or worse!) is mind-boggling. Perhaps there is empirical evidence supporting complicated pricing. But I've never seen it. I specifically went with one price per product because I think complicated pricing plans negatively affect sales and sign-up rates, not to mention operational complexity!<p>If you're interested, here's our pricing page: <a href="https://siftrics.com/pricing.html" rel="nofollow">https://siftrics.com/pricing.html</a>
> Monthly: $49 / $99 / $249<p>So on the topic of ${X}0 vs ${X - 1}9 (ie. "50 vs 49", "100 vs 99", "250 vs 249"), what's the current "best practice"?<p>I feel like we might be like those 5 monkeys with a banana: someone figured out long ago in some context that X9 might convert better, now everyone's doing it and the reason might not still be valid.<p>I'd love to hear about some recent studies or comparative experiences related to this.<p>For me, subjectively, "49" has the "sleazy car salesman" vibe, compared to "50" being more "we're not ashamed to tell it like it is". On the other hand, I've always felt like this so I was an outlier before.
Amazing line in the case study about crypto tax consulting:<p>"If a person didn’t make tens of thousands of dollars while doing 1,000 transactions in 2017 in cryptocurrencies then, bluntly, there is something wrong with that person’s ability to make good decisions, and you should probably not seek their custom."
Great article. Related to <i>charge more</i>: don't dismiss a higher price point outright as "probably being high-touch only"; it's worth testing. We have a $999/month plan for example which we still sell on a low-touch model.
Patio11 is practically synonymous with the phrase "charge more" in the startup world, however, his catch phrase cannot be more misleading.<p>For most prospective customers, you should charge less. For a select few customers, you should charge way more. Upping the ante indiscriminately only continues to make the world even more unequal and inaccessible for the people who need your products the most.
Great article with good real world examples. It's easy to underestimate how many decisions you have to juggle when coming up with pricing plans.<p>I wouldn't mind a similar analysis for my own pricing page for an website SEO auditing tool if anyone feels like giving feedback: <a href="https://www.checkbot.io/#pricing" rel="nofollow">https://www.checkbot.io/#pricing</a><p>Related to the advice from the article, I resisted offering lifetime deals and going really cheap, I have a free tier to help with organic marketing, I don't offer a free trial of the full version but I offer refunds if you're not happy, and I avoiding using "Pricing" as the pricing section heading. I might try replacing the monthly plan with a quarterly plan so subscribers aren't having to decide so often if they're going to keep paying (I rarely see a SaaS doing quarterly plans without monthly plans though). I suspect I'm giving too much away for free as the free version will probably cover a lot of small business websites.
Here is another interesting take on purchasing power parity pricing model used by Wes Bos and Robin Weiruch to sell their digital products(books/courses). The idea is to have a single pricing for all your products but adjust the pricing based on where in the world you live. <a href="https://purchasing-power-parity.com/" rel="nofollow">https://purchasing-power-parity.com/</a>
A brilliant article.<p>Often it seems that SaaS vendors don't have a plan for pricing but rather they design a "pricing page" that looks like the pricing page for other SaaS plans.<p>If you start asking questions like: can you afford to offer this service at this price? what value does the customer get out of this service? they get defensive.<p>I have refused to use SaaS services and I've refused to work for SaaS vendors because "I don't think you can make a profit with that pricing" and they tell me "why do you care?
"<p>As a customer: "I am paying you for a service because I want the peace of mind that I don't have to do it myself. If you business isn't profitable, you're going to go out of business and I'm going to have to find a new way to provide this service."<p>As an employee I reject the marxist idea that I'm necessarily getting ripped off if I make more value than I get paid. If you are not making a profit for your employer why should they hire you?<p>In a profitable company you are often struggling to get a decent computer, good working procedures, etc. In a non-profitable company it's almost impossible that they'll treat you with respect and give you the resources you need.<p>My one complaint is that, mindlessly, this article has a pop-up at the bottom that says "you are browsing this web site from India (not true), click here for our regionalized site..."<p>Sure big companies like Dell, Logitech, waste your time when you are looking for content by trying to segment you via country, are you an SMB (the article explains why the word "SMB" is mindless), etc. You'd think internet-native firms would know better.
I have a related question: Is high-touch saas (enterprise sales with long sales cycles) inherently harder to bootstrap than a low-touch saas business?<p>I'm guessing the answer is something like "not if you have the network"
Some key learnings. But you should probably read it.<p># Charge more.<p>- It helps keep low money, high support customers away. See "[pathological customers](<a href="https://hn.algolia.com/?query=patio11%20%22pathological%20customers%22&type=comment&dateRange=all&prefix=false&page=0&sort=byDate" rel="nofollow">https://hn.algolia.com/?query=patio11%20%22pathological%20cu...</a>)"
- "If an insurance company builds their entire business around [your SaaS product value] then that is a six figure deal, minimally."
- Just charge more [[1](<a href="https://hn.algolia.com/?query=patio11%20%22charge%20more%22&type=comment&dateRange=all&prefix&page=0&sort=byDate" rel="nofollow">https://hn.algolia.com/?query=patio11%20%22charge%20more%22&...</a>)]
- SaaS entrepreneurs overestimate the benefit of low prices early
- AppAmaGooBookSoft are doing their best to convince customers worldwide that software should be free (or as close at makes no difference) and subsidized by extremely lucrative advertising/hardware/e-commerce/etc ecosystems attached to it. That is a hard market expectation to go against.<p># Pricing pages should continue the sales message<p>- The title of the pricing page should act like a sales representative. E.g. avoid "Plans & Pricing" or <i>Transparent and Flat Pricing</i>". Provide your value in the headline.
- Reduce decision fatigue for customers. Up to 3 plans + contact us. Clearly distinct each value proposition
- $X.99 pricing is not generally used in B2B or prosumer services because it communicates cheapness; I’d suggest you drop the 0.99 accordingly here, for aesthetic reasons
- Lite / Standard / Premium are weak names for SaaS plans because they don’t help a user make an instant decision on which plan is right for them.
- Don't use "<i></i>Dedicated<i></i> support". Use "<i></i>Priority<i></i> support" instead. Plus charge more for priority support.
- No free plan on the pricing page
- Name pricing plans to sell them to the right users. Avoid "Premium". Use "Hobbyist", "Small Store", "Sophisticated E-Commerce Retailer", "Enterprise"
- You should only include the most salient details on your pricing page. If there is a difference between plans which is not salient to your customers or to you, it should not be a difference between plans;<p># Others<p>- <i></i>About removing the credit card / free trial :<i></i> most B2B SaaS companies find that removing the credit card requirement increases the number of free trial signups they get but decreases the activation rate (the number of users who make material use of the software) and conversion rate to paying use. It is generally not worth it early in the lifecycle of your company.
- All decisions about the pricing page are optimizations to approximate the value creation curve and charge for it.
- Free is not a compelling value proposition to well-monied buyers.
I love pretty much everything that Patrick McKenzie writes, but for some reason, my default internal monologue for his writing makes reading everything that he writes sound like an episode of Last Week Tonight with John Oliver. Makes reading his pieces a very interesting experience.