How To Determine The Price Of Your Software
Shared On August 28, 2024 • 6-Part Video Series
Breaking Down SaaS Platform Pricing
How you price your software platform can make all the difference between the failure and success of your organization. And while it may seem simple from the outside, SaaS pricing is quite complex to break down and understand before making it public.
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It's A Whole Other World
Unlike eCommerce, physical goods, NFT, or even digital tokens, the SaaS world is quite complex when pricing SaaS platforms. There are numerous scenarios to think through such as:
- Reduced pricing during a trial period
- Promotional pricing, but having to understand how it will impact your buyback period
- How you tier your pricing page, using The Good-Better-Best Approach to Pricing
- How you break down how your pricing is measured; such as users, data, or actions taken
- Should you offer a freemium or free trial, and how long should it last
It's More Than Costs + Margin With SaaS
More importantly, when thinking through how you'll price your software, you're most likely not going to follow the traditional path of pricing where you calculate the costs to make the service possible and then add a percentage to create a margin.
With SaaS, you are selling potential value and want to capture this value via functions, emotions, and status to convey a powerful offer that shares exactly what they are buying and can see the big picture potential that allows you to charge a premium.
Value-Based Selling
If Marketo or HubSpot were to sell their software simply by saying you're able to send an email to a prospect, do you think they would be able to charge $895/month or $800/month respectively?
The Worst Thing You Can Do With Pricing
The worst thing you could do is launch your platform with one pricing structure and later down the road decide to change it. Not only will this cause some of your customers to churn, but it will frustrate your sales team because they will have to learn how to explain this new pricing structure to their prospects.
What You'll Get In This Video Series
In this video series, I'll break down all the different scenarios I've seen throughout my experiences with SaaS organizations and those I would recommend and run if I were to launch my own SaaS platform.
Video Series Agenda
This 6-part video series will discuss the following topics:
Pricing Strategies
Explore 9 common SaaS pricing strategies, including value-based, freemium, and tiered pricing. Learn how to choose the right model for your product and market to maximize growth and profitability.
Pricing Approaches
Explore the key differences between sales-led and product-led growth strategies in SaaS. Learn how each approach impacts customer acquisition, revenue growth, and user experience.
Benefits & Features
Learn how to craft compelling SaaS benefits and features that drive conversions. Discover 12 expert tips for clear, customer-focused messaging that highlights your product's unique value proposition and solves user pain points.
Platform Discounts
Explore the benefits of avoiding discounts for your business. Maintain brand value, protect profit margins, attract quality customers, and differentiate from competitors. Learn alternatives to discounting that can improve your bottom line.
Good, Fast, Cheap
The "Good, Fast, Cheap" approach explains the inherent tradeoffs in any project or service. You can only achieve two of the three attributes. Trying to get all three is usually unrealistic. Learn how to use this method when selling your platform.
Platform Upselling
Boost revenue by mastering the art of upselling your SaaS platform. Discover effective strategies to drive expansion MRR, from timely in-app messaging to personalized upgrade recommendations, and unlock the full potential of your customer base.
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