Questions

We are launching a B2B SAAS based Online platform which offers different products to clients for different application areas. All these products are stand alone and not connected to the main offering. Currently We have 3 plans which is based on Number of users. Higher plans have additional features like whitelabel etc. We have 4 different add on products which can help the same clients in case they need it. So instead of opting it to all, can we have it as an add on with separate price for each. So instead of clubbing all products and offering under one plan or one pricing, we can allow clients to pick and paying for all add ons they feel is required. So client X who wants only One product pays only for that and Client Y who needs all products pays for all 4 but at a special discount. 1. Does this kind for pricing work in SAAS? 2. Is it better for SAAS conversion to have all products offered to the client).

Do not consider this as a fixed and rigid decision. Consider this more like an opportunity to realize that you should test your pricing strategy as early as possible or at least now.

Every pricing strategy you choose does work, the question is can you find your optimum?

In your position, I'd recommend to make up your mind about your features first. Sit together and think about what features are necessary for which buying persona you are catering to. To simplify this, forget what I just wrote and think about the feature set for your MVP to make it work for your user. The minimum solution fit, a car can't drive without 4 tires - there you have your basic pricing model - features: 4 tires.

Now common practice is offering a very low pricing model that is meant to nurture your leads to upsell them to the pricing you want, your basic pricing. This almost free or free pricing tier lacks a certain feature that is "almost crucial" - what this is in your case, I do not know, because I do not know who you are ;)

Though, there is a third tier, the all feature tier which is the enterprise model. You most certainly know this, because you see this everywhere.

You can read more about pricing pages here: http://conversionxl.com/10-principles-of-effective-pricing-pages/

The problem with making your pricing model highly flexible is that prospecting customers do not know what they want/need or what they are willing to pay for it as long as you do not give them a clear proposal. Though, your SaaS might have a value proposition that might be perfect for a dynamic pricing structure - I do not know that, because I do not know you ;)

For example, there are relative pricing models like retargeter which pricing is based upon the number of impressions, instead of a feature set and on the use-case - off- or on-site.

Keep in your mind, that constantly testing pricing models might be illegal in your region. Though, you can always conduct user interviews and simply ask about this issue. But be aware, do not make the mistake to lead an answer with a too pushing question. Do not ask blatant questions like "Does the pricing of 8$ appeal to you" "Would you buy the product with this functionality for 8$" instead ask for ranges. Ask for "Would you consider to pay a price between 5-9$", which also doubles as you already have insight in your customers potential maximal buying willingness.

I'd also think about behavioural targeting - e.g. users of demographic x get displayed another price than y. This, as a matter of course, needs to be tackled very carefully and thorough. Experience helps ;)

Pricing generally is a whole own universe of conversion rate tests and techniques based upon behavioural insight and cognitive analysis. Charm pricing, decoys, reframing the environment of your prices, even the size of the font of your pricing can have an impact. Heck, even just removing the currency sign can have an impact on your CR: http://isiarticles.com/bundles/Article/pre/pdf/1798.pdf

In your case, one intuitive test I would drive would be bundles. Means offering separated tiers, but also a discount bundle (though the discount is still higher than the single prices you offer "right now" - reframed).

I am a VP of growth and my focus is on UX and CRO and this is one of those field I am personally excited about. So, sorry for the long text ;)


Answered 5 years ago

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