• 3. The 3 Models of SaaS Pricing1How to Pick the Best Price28 Pricing Hacks3How to Test New Pricing4We’ll cover... • 4. Model 1: Targeting Small Businesses1 • 5. Self-service, no sales team, limited support • 6. Pricing in the $10 - $100/month rangeThis mean you need to focus onscale and acquiring customerscheaply. • 7. Similar companies • 8. Model 2: Targeting Enterprise2 • 9. Sales team, contracts, full support • 10. Pricing is $1,000s or $10,000s/monthVery little is automated, your teamwill be working very closely witheach customer. • 11. Similar companies • 12. Model 3: The Mid-Size Hybrid3 • 13. Automated marketing with a sales team • 14. Pricing is $100’s/monthYou’ll need to scale your leads butyou’ll have a full sales team toclose them. • 15. Similar companies • 16. Pick the right price range for your vision • 17. 2 Bad Methods for Pricing • 18. 1. Product cost + X%You’ll undercharge somecustomers and overcharge others. • 19. 2. What does the customer want to pay?People have no idea until you askthem for their credit card. • 20. Pricing by Value • 21. Value-Based PricingYour customers get value worth $Yand it only costs them $X. • 22. For B2B, focus on money earned or saved • 23. How much extra revenue do they earn?1How many hours do they save?2What other costs do they avoid?3Ask your customers: • 24. Capture more value from each customer. • 25. There’s no such thing as a perfect price.If you need more guidance, pick aprice that’s 10% of the valuedelivered. • 26. 8 Pricing Hacks8 • 27. Rule 1: Go AnnualYou’ll improve cash flow, reduceyour churn, and improve yourrevenue. • 28. Rule 2: Don’t Add Unnecessary Digits$1000 looks cheaper than $1,000or $1000.00 • 29. Rule 3: Avoid Discounts Unless LaunchingDiscounts create destructivecustomer habits. Do not use themregularly. • 30. Rule 4: Offer Multiple Prices to Anchor • 31. Rule 5: Use pricing plans to segment customers.Different customer types getdifferent value from your product.Capture that value. • 32. Rule 6: Double Your PriceWe all tend to UNDERvalue our ownservices. • 33. Rule 7: Be Careful With Freemium PlansVery difficult to make it work in B2Bmarkets. • 34. Rule 8: Grandfather Old Customers InAs long as you don’t raise pricesfor old customers, you won’t getany complaints. • 35. These are rules, not laws. • 36. How to Test New Pricing - 4 Steps • 37. Step 1: Track subscription plans for all customersSubscription plans1Each monthly charge2Any cancelations3Access to total revenue, averagerevenue per user, and churn4 • 38. Step 2: Launch Your New Pricing Page • 39. Step 3: Track your entire funnel • 40. Step 4: Track ARPU and churn • 41. KISSmetrics helps you find the right priceConnects all data to individual people1A/B tests for your entire funnel2See which plans are most profitable

1. The Secrets to SaaS Pricing
Lars Lofgren
Product Marketer - June 2013

2. @larslofgren #KISSwebinar

3. The 3 Models of SaaS Pricing1
How to Pick the Best Price2
8 Pricing Hacks3
How to Test New Pricing4
We’ll cover...

4. Model 1: Targeting Small Businesses
1

5. Self-service, no sales team, limited support

6. Pricing in the $10 - $100/month range
This mean you need to focus on
scale and acquiring customers
cheaply.

7. Similar companies

8. Model 2: Targeting Enterprise
2

9. Sales team, contracts, full support

10. Pricing is $1,000s or $10,000s/month
Very little is automated, your team
will be working very closely with
each customer.

11. Similar companies

12. Model 3: The Mid-Size Hybrid
3

13. Automated marketing with a sales team

14. Pricing is $100’s/month
You’ll need to scale your leads but
you’ll have a full sales team to
close them.

15. Similar companies

16. Pick the right price range for your vision

17. 2 Bad Methods for Pricing

18. 1. Product cost + X%
You’ll undercharge some
customers and overcharge others.

19. 2. What does the customer want to pay?
People have no idea until you ask
them for their credit card.

20. Pricing by Value

21. Value-Based Pricing
Your customers get value worth $Y
and it only costs them $X.

22. For B2B, focus on money earned or saved

23. How much extra revenue do they earn?1
How many hours do they save?2
What other costs do they avoid?3
Ask your customers:

24. Capture more value from each customer.

25. There’s no such thing as a perfect price.
If you need more guidance, pick a
price that’s 10% of the value
delivered.

26. 8 Pricing Hacks
8

27. Rule 1: Go Annual
You’ll improve cash flow, reduce
your churn, and improve your
revenue.

28. Rule 2: Don’t Add Unnecessary Digits
$1000 looks cheaper than $1,000
or $1000.00

29. Rule 3: Avoid Discounts Unless Launching
Discounts create destructive
customer habits. Do not use them
regularly.

30. Rule 4: Offer Multiple Prices to Anchor

31. Rule 5: Use pricing plans to segment customers.
Different customer types get
different value from your product.
Capture that value.

32. Rule 6: Double Your Price
We all tend to UNDERvalue our own
services.

33. Rule 7: Be Careful With Freemium Plans
Very difficult to make it work in B2B
markets.

34. Rule 8: Grandfather Old Customers In
As long as you don’t raise prices
for old customers, you won’t get
any complaints.

35. These are rules, not laws.

36. How to Test New Pricing - 4 Steps

37. Step 1: Track subscription plans for all customers
Subscription plans1
Each monthly charge2
Any cancelations3
Access to total revenue, average
revenue per user, and churn
4

38. Step 2: Launch Your New Pricing Page

39. Step 3: Track your entire funnel

40. Step 4: Track ARPU and churn

41. KISSmetrics helps you find the right price
Connects all data to individual people1
A/B tests for your entire funnel2
See which plans are most profitable3

42. VIP KISSmetrics Demo
kiss.ly/webinar-20

43. Q&ATime!
Lars Lofgren
llofgren@kissmetrics.com
@larslofgren