{"id":97473,"date":"2023-09-23T13:16:12","date_gmt":"2023-09-23T13:16:12","guid":{"rendered":"https:\/\/www.invespcro.com\/blog\/?p=97473"},"modified":"2026-08-18T03:45:38","modified_gmt":"2026-08-18T03:45:38","slug":"guide-to-optimize-saas-pricing","status":"publish","type":"post","link":"https:\/\/www.invespcro.com\/blog\/guide-to-optimize-saas-pricing\/","title":{"rendered":"AN EXPERT GUIDE TO OPTIMIZE YOUR SAAS STRATEGY"},"content":{"rendered":"<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 26<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span>\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"97473\" class=\"elementor elementor-97473\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-419c1ed elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"419c1ed\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-1f88bd7\" data-id=\"1f88bd7\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-6d41386 elementor-widget elementor-widget-text-editor\" data-id=\"6d41386\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><em>Disclaimer: This section is a TL;DR of the main article and it\u2019s for you if you\u2019re not interested in reading the whole article. On the other hand, if you want to read the full blog, just scroll down and you\u2019ll see the introduction.<\/em><\/p><ul><li>Finding the right pricing strategy and price points for your SaaS (Software as a Service) company is no mean feat. As a matter of fact, quite a few companies and especially startups struggle with defining a successful pricing strategy.<\/li><li>There are three overarching marketing challenges that marketing teams at SaaS companies must solve to drive revenue; Driving as many qualified potential customers as possible to their website, Converting these potential customers into first-time subscribers, and Retaining existing subscribers.<\/li><li>Pricing seems to be an easy task at first glance. But having the right pricing is one of the biggest challenges for SaaS businesses: if the price is too high, you will scare your customers away, and, if it is too low, you will lose money and that certainly affects your business performance.<\/li><li>Setting the right price for your SaaS requires understanding the value you provide your customers and understanding how your competition set their price.<\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-8e0b3d5 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"8e0b3d5\" data-element_type=\"section\" data-e-type=\"section\" data-settings=\"{&quot;background_background&quot;:&quot;gradient&quot;}\">\n\t\t\t\t\t\t\t<div class=\"elementor-background-overlay\"><\/div>\n\t\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-c9ceb41\" data-id=\"c9ceb41\" data-element_type=\"column\" data-e-type=\"column\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-62fdf30 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"62fdf30\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-ba63c5d\" data-id=\"ba63c5d\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-b59914d elementor-widget elementor-widget-image\" data-id=\"b59914d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"800\" height=\"377\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Group-11-3-1024x483.png\" class=\"attachment-large size-large wp-image-99126\" alt=\"\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Group-11-3-1024x483.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Group-11-3-300x141.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Group-11-3-768x362.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Group-11-3-1536x724.png 1536w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Group-11-3.png 1641w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-a3dc735\" data-id=\"a3dc735\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-91deab0 elementor-widget elementor-widget-heading\" data-id=\"91deab0\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Visitors Aren\u2019t <br> <span style=\"color:#FF9800\"> Converting?<\/span><\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-76616a8 elementor-widget elementor-widget-heading\" data-id=\"76616a8\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">We\u2019ll Show You Why<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-e510e20 elementor-align-center elementor-widget elementor-widget-button\" data-id=\"e510e20\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"button.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-button-wrapper\">\n\t\t\t\t\t<a class=\"elementor-button elementor-button-link elementor-size-sm\" href=\"https:\/\/offer.invespcro.com\/conversion-rate-optimization\/benchmark\/\" target=\"_blank\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t\t\t\t<span class=\"elementor-button-text\">GET A FREE CONVERSION ASSESSMENT<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-2e24774 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2e24774\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-bb3ab1f\" data-id=\"bb3ab1f\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-0232ab2 elementor-widget elementor-widget-text-editor\" data-id=\"0232ab2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><em>Disclaimer: This section is a TL;DR of the main article, and it\u2019s for you if you\u2019re not interested in reading the whole article. On the other hand, if you want to read the full blog, just scroll down, and you\u2019ll see the introduction.<\/em><\/p><ul><li>Finding the right pricing strategy and price points for your SaaS (Software as a Service) company is no mean feat. As a matter of fact, quite a few companies, especially startups, struggle to define a successful pricing strategy.<\/li><li>There are three overarching marketing challenges that marketing teams at SaaS companies must solve to drive revenue: driving as many qualified prospects as possible to their website, converting these prospects into first-time subscribers, and retaining existing subscribers.<\/li><li>Pricing seems to be an easy task at first glance. But setting the right price is one of the biggest challenges for SaaS businesses: if the price is too high, you will scare customers away; if it is too low, you will lose money, and that certainly affects your business performance.<\/li><li>Setting the right price for your SaaS requires understanding the value you provide to your customers and how your competitors set their prices.<\/li><\/ul><h3 class=\"wp-block-heading\"><strong>How To Use Qualitative And Quantitative Data To Collect Customer Insights<\/strong><\/h3><ul><li>Qualitative data allows you to sidentifydistinct groups within your target audience;iand assess whetheryour target audience finds your product\/service attainable, etc.<\/li><li>Quantitative research also provides you with information on the least and most popular functions of your SaaS, how often your product is used, etc.<\/li><li>There are several questions you should ask; answering these questions will help you develop your pricing strategy.<\/li><li>Conduct surveys and use analytics; they let you understand your customers\u2019 motivations.<\/li><li>We recommend starting with qualitative research and then complementing it with quantitative findings. (See the main article for the general structure of questions to use in qualitative research depending on the stage of the prospect in your sales funnel.<\/li><li>When overlapping your qualitative data with quantitative research, you\u2019ll need demographic data on your prospects&#8217; age, location, gender, etc.<\/li><\/ul><h3 class=\"wp-block-heading\"><strong>How To Quantify Your Website Personas.<\/strong><\/h3><ul><li>A buyer persona is a detailed description of someone who represents your target audience<\/li><li>You cannot sell anything without knowing your customers. However, to create an optimized pricing strategy, you need to quantify these personas with strong data<\/li><li>To quantify your website personas, start by looking for patterns in the collected data and linking these patterns to your visitors\u2019 personas.<\/li><li>You have a ton of questions to ask in this stage, like what factors my CAC depends on and how the purchase process works for each buyer persona.<\/li><li>Answering these questions (and the others in the main article) is critical to setting your pricing strategy and your business.<\/li><\/ul><h3 class=\"wp-block-heading\"><strong>How To Define Your Saas Key Metric Value<\/strong><\/h3><ul><li>A value metric iswhatt your customers value most about your business. Value metric is the foundation of your pricing model.<\/li><li>After studying your audience, define the value metrics you will use to create your price tiers. The value metrics you use depend on the nature of your business (e.g., storage space, number of emails sent, page views,, and users).<\/li><\/ul><h3 class=\"wp-block-heading\"><strong>How To Create SaaS Pricing Tier<\/strong><\/h3><ul><li>Define the minimum amount a customer must pay to cover costs<\/li><li>Define the maximum amount a customer is willing to pay for your service.<\/li><li>Assess competitive pricing<\/li><li>Map out your pricing tiers<\/li><li>Align your value metric with pricing tiers based on buyer personas.<\/li><\/ul><h3 class=\"wp-block-heading\"><strong>How To Design Your Pricing Page<\/strong><\/h3><ul><li>Define the elements of your pricing page.<\/li><li>How you design your pricing page is up to you. But you should remember that users should be able to grasp your value proposition and pricing in 5 seconds.<\/li><li>You should not boverwhelmyour potential customers with too much information oaboutyour pricing plans at tonce and you should not leave any room for gguessworkon their spart<\/li><li>The Majority of SaaS companies do not use custom pricing. However, by having custom plans, you ensure you do not lose enterprise clients. Enterprise clients bring larger revenue and lend more credibility to your business.<\/li><\/ul><h3 class=\"wp-block-heading\"><strong>How To Optimize Your SaaS Page Design Using Charm Pricing<\/strong><\/h3><ul><li>Nowadays you rarely see prices ending in 0; most of them are \u201ccharmed\u201d and end with 9,7 or 5, creating an impression that the price is smaller than it is<\/li><li>William Poundstone, in his book Priceless, claimed that charm pricing increases sales by 24% on average.<\/li><li>Eric Anderson and Duncan Simester found out in their research that items tagged $39 sell better than cheaper items tagged $34<\/li><\/ul><p><strong>Here\u2019s A Longer And More Detailed Version Of The Article.<\/strong><\/p><hr class=\"wp-block-separator has-alpha-channel-opacity\" \/><p>Finding the right pricing strategy and price points for your SaaS (Software as a Service) company is no mean feat. As a matter of fact, quite a few companies, anpecially startups, struggle wito define successful pricing strategy.<\/p><p>In recent years, SaaS has grown at a rate of <a href=\"http:\/\/www.ironpaper.com\/webintel\/articles\/saas-market-size-forecast\/\">24.4% year-over-year<\/a>, and by 2019, it was predicted to account for around <a href=\"http:\/\/www.ironpaper.com\/webintel\/articles\/saas-market-size-forecast\/\">20%<\/a> of all software spending. No wonder the implementation of SaaS is gradually growing. It is easy to update and debug, and less expensive than traditional software services, especially for small and medium enterprises.<\/p><p><a href=\"https:\/\/www.invespcro.com\/saas-cro-services\/\">SaaS companies<\/a>\u00a0can make a profit from subscriptions, so there are three overarching marketing challenges that marketing teams at SaaS companies must solve:<\/p><ol><li>Driving as many qualified potential customers as possible to their website.<\/li><li>Converting these potential customers into first-time subscribers.<\/li><li>Retaining existing subscribers.<\/li><\/ol><p>Each of these problems can be broken down into many points, but this article will focus on how price optimization could help your SaaS product <a href=\"https:\/\/www.invespcro.com\/cro\/\">convert more customers on the website<\/a>.<\/p><p>Pricing seems to be an easy task at first glance. But setting the right price is one of the biggest challenges for <a href=\"https:\/\/www.invespcro.com\/blog\/saas-customer-acquisition\/\">SaaS businesses<\/a>: if the price is too high, you will scare customers away; if it is too low, you will lose money, and it will be your own fault.<\/p><p>Setting the right pricing for a SaaS product requires two things:<\/p><ol><li>Understanding the value you provide to your customers. Remember that your customers pay for the real or perceived <a href=\"https:\/\/www.linkedin.com\/pulse\/5-simple-steps-create-compelling-value-proposition-every-shukairy?trk=mp-reader-card\">value<\/a> you provide. Customers do not care what sales models you implement or what your costs are; all they care about is what is in it (in your product) for them.<\/li><li>Understanding how your competitors set their prices. Your company doesn\u2019t exist in a vacuum; it is, for sure, surrounded by tens of direct and indirect competitors. So, unfortunately, you cannot move forward with creating your pricing strategy without an exhaustive <a href=\"https:\/\/www.invespcro.com\/blog\/competitive-analysis-for-conversion-rate-optimization\/\">competitive analysis<\/a> of your competitors and an understanding of what they are doing and why.<\/li><\/ol><p>Let\u2019s see how you can blend these two things together into a compelling SaaS pricing model and beat up your competitors using these five steps.<\/p><figure class=\"wp-block-image size-large\"><img decoding=\"async\" class=\"wp-image-97474\" title=\"use-qualitative-and-quantitative-data - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/use-qualitative-and-quantitative-data-1024x360.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/use-qualitative-and-quantitative-data-1024x360.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/use-qualitative-and-quantitative-data-300x105.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/use-qualitative-and-quantitative-data-768x270.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/use-qualitative-and-quantitative-data.png 1311w\" alt=\"qualitative and quantitative data\" width=\"1024\" height=\"360\" \/><\/figure><h2 class=\"wp-block-heading\">1. Use qualitative and quantitative data to collect customer insights<\/h2><p>There are several important questions you should answer during this step:<\/p><ol><li><em>Why does your software matter to customers?<\/em><\/li><li><em>How and why do they value your software?<\/em><\/li><li><em>What pain points of your customers does it solve?<\/em><\/li><li><em>What features do they find most useful?<\/em><\/li><li><em>What motivates them to start using your software?<\/em><\/li><li><em>What are the hurdles that stop website visitors from converting?<\/em><\/li><\/ol><p>Answering these questions will help you determine how to position and price your service.<\/p><p>To pinpoint what motivates your customers to sign up for your service, how they use it, and what keeps them engaged, you should first collect and evaluate qualitative and quantitative data:<\/p><ul><li>Conduct surveys and customer interviews; use customer feedback as qualitative data.<\/li><li>Use analytics and demographic data as quantitative data.<\/li><\/ul><p>We would advise you to start with qualitative research (conducting surveys and interviews with the customers) and then complement the qualitative findings with quantitative research, such as using analytics and demographic data to see how customers use your product, what features they like the most, and which <a href=\"https:\/\/www.invespcro.com\/blog\/google-analytics-metrics-impact-conversion-rate-optimization\/\">key value metrics<\/a> you should give more importance to.<\/p><p>Of course, you can start the other way around, with qualitative data. However, we recommend starting with qualitative research, organizing your findings\u2014for instance, using the <a href=\"https:\/\/www.linkedin.com\/pulse\/just-listen-back-elementary-school-basics-ayat-shukairy\">voice of the customer<\/a> method\u2014and then comparing the results to qualitative findings. The reason is simple: why guess when you can ask your customers?<\/p><p>Here is a very general structure of the types of questions you should ask your website visitors, prospects, and customers. Obviously, the questions you ask depend on the stage of the sales <a href=\"https:\/\/www.invespcro.com\/blog\/an-unusual-guide-to-conversion-funnel-optimization\/\">funnel<\/a>.<\/p><p><strong>At the early stage of the sales funnel, your goal is to understand:<\/strong><\/p><ol><li>Understand reasons visitors are visiting your website<\/li><li>Assess the competitive space you operate in<\/li><\/ol><p>Examples of the questions you could ask:<\/p><ul><li><em>What do our competitors do better than us?<\/em><\/li><li><em>What brought you to our website today?<\/em><\/li><li><em>How have you found us?<\/em><\/li><li><em>Are you looking for anything specific? What is it?<\/em><\/li><li><em>Are you considering several products now? What are they?<\/em><\/li><li><em>Why are you looking for a SaaS product X?<\/em><\/li><li><em>What are the top 3 features you are looking for?<\/em><\/li><\/ul><p><strong>In the early to mid-stage of the sales funnel, your goal is to understand:<\/strong><\/p><ol><li>Rate visitors\u2019 satisfaction with your website<\/li><li>Rate visitors\u2019 satisfaction with a particular webpage<\/li><li>Uncover the appeals of your site\/product offering<\/li><\/ol><p>Examples of the questions you could ask:<\/p><ul><li><em>How happy are you with our pricing tiers? Which one do you love the most?<\/em><\/li><li><em>How would you rate your website experience today? Have you faced any issues?<\/em><\/li><li><em>What features of our product do you find most attractive to you, and why?<\/em><\/li><li><em>Does your company have a certain budget for the needs our SaaS product covers?<\/em><\/li><\/ul><p><strong>In the mid to late stage of the sales funnel, your goal is to understand:<\/strong><\/p><ul><li>Uncover missing content<\/li><li>Uncover Issues with the website\/page<\/li><li>Understand reservations with using or purchasing product<\/li><\/ul><p>Examples of the questions you could ask:<\/p><ul><li><em>Do you think some of the product\/service&#8217;s features do not address your needs? Why?<\/em><\/li><li><em>What additional features would you like to see in our products?<\/em><\/li><li><em>Is there any reason why you would not subscribe to our software? Why?<\/em><\/li><\/ul><p><strong>In the post-purchase phase, your goal is to understand:<\/strong><\/p><ul><li>Measure scale of satisfaction<\/li><li>Solicit feedback<\/li><\/ul><p>Examples of the questions you could ask:<\/p><ul><li><em>What is the greatest benefit you gained from our product\/service?<\/em><\/li><li><em>What advice would you give to improve our product\/service?<\/em><\/li><li><em>Do you think some of the product\/service&#8217;s features do not address your needs? Why?<\/em><\/li><li><em>What additional features would you like to see in our products?<\/em><\/li><li><em>Why did you choose us over our competitors?<\/em><\/li><li><em>Are you satisfied with our product\/service?<\/em><\/li><li><em>Does our software exceed your expectations? Could you give us a recent example of that?<\/em><\/li><li><em>How long do you see yourself using our software?<\/em><\/li><li><em>How likely are you to recommend our product to friends? Were you able to find the information you were looking for on our website?<\/em><\/li><\/ul><p>You might wonder why you should ask questions that are not directly related to pricing. Actually, you should always look at the bigger picture, and it is very important that you clearly understand all the reasons why people subscribe to your software.<\/p><p>Let\u2019s look at a <strong>real-life example<\/strong> to see how understanding your customers and using that knowledge in <a href=\"https:\/\/www.linkedin.com\/pulse\/from-zero-hero-over-190-increase-conversions-without-prices-shukairy\">pricing<\/a>\u00a0tiers can increase conversion.<\/p><p>Look at the original pricing table of a company offering a subscription to a database of essays, student papers, and book reviews.<\/p><figure class=\"wp-block-image size-full\"><img decoding=\"async\" class=\"wp-image-97475\" title=\"original-pricing-of-a-page - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/original-pricing-of-a-page.png\" sizes=\"(max-width: 448px) 100vw, 448px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/original-pricing-of-a-page.png 448w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/original-pricing-of-a-page-300x253.png 300w\" alt=\"example of original pricing of a page\" width=\"448\" height=\"378\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/www.linkedin.com\/pulse\/from-zero-hero-over-190-increase-conversions-without-prices-shukairy\">Pulse<\/a><\/p><p>All best practices are there (we\u2019ll review them a bit later in this article). What else could be done?<\/p><p>Knowing that the majority of visitors are students, one could assume that the original price seems too high for them: $29 a month for a database subscription.<\/p><p>This assumption has proven correct.<\/p><p>As soon as the price was presented differently, the <a href=\"https:\/\/www.invespcro.com\/\">conversion rate\u00a0<\/a>skyrocketed by 193%. It turned out that the price per day was a better way to communicate the value to the target audience.<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97476\" title=\"original-pricing-2 - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/original-pricing-2.png\" sizes=\"(max-width: 464px) 100vw, 464px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/original-pricing-2.png 464w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/original-pricing-2-300x230.png 300w\" alt=\"AB test variation of original pricing page\" width=\"464\" height=\"355\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/www.linkedin.com\/pulse\/from-zero-hero-over-190-increase-conversions-without-prices-shukairy\">Pulse<\/a><\/p><p>After you collect qualitative data, you should have answers to these questions:<\/p><ul><li>Who have I built my product\/service for?<\/li><li>What distinct groups can I see within my target audience?<\/li><li>What pain points does my product\/service solve for each customer group? What value does my product provide for them? Why would they use my product\/service?<\/li><li>Do the customers find my products\/services attainable?<\/li><li>What are the price expectations each customer group voices?<\/li><\/ul><p>Basically,\u00a0<strong>why should you do extensive and exhaustive qualitative research<\/strong>?<\/p><p>If you are new to the market, your goal is to find out who is ready (and willing) to pay for your SaaS product. And if you are an already operating company, your first focus is to identify distinct customer segments within your current audience, then look around to see who else might be interested in your product\/service.<\/p><p>You might ask: \u201cWhy should I do it again? I already did something like this when I created buyer personas!<\/p><p>Actually, this time your research should focus primarily on the <a href=\"https:\/\/www.linkedin.com\/pulse\/5-simple-steps-create-compelling-value-proposition-every-shukairy?trk=mp-reader-card\">value<\/a> (expected or unexpected) you provide to your customers. And if you don\u2019t have buyer personas, yes, the information you gathered through research would help you map them out.<\/p><p>Now is the time to integrate your qualitative research findings with <strong>quantitative data<\/strong>.<\/p><p>You will need some demographic data on your prospects and customers:<\/p><ul><li>Age<\/li><li>Gender<\/li><li>Location<\/li><li>Company size (if applicable)<\/li><li>Company revenues\/ turnovers (if applicable)<\/li><\/ul><p>Then you\u2019ll need some data on how your existing clients use your product\/service:<\/p><ul><li>What are the most and the least popular functions?<\/li><li>What are the most and least preferred types of data output?<\/li><li>How often do your customers use your product\/service?<\/li><li>When do your customers stop using your product\/service?<\/li><li>What is your current\/estimated\u00a0<a href=\"https:\/\/en.wikipedia.org\/wiki\/Customer_lifetime_value\">customer lifetime value<\/a> for each distinct customer segment?<\/li><li>What is the current\/estimated cost of user acquisition?<\/li><\/ul><figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97477\" title=\"quantify-your-website-personas - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/quantify-your-website-personas-1024x376.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/quantify-your-website-personas-1024x376.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/quantify-your-website-personas-300x110.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/quantify-your-website-personas-768x282.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/quantify-your-website-personas.png 1313w\" alt=\"website personas\" width=\"1024\" height=\"376\" \/><\/figure><h2 class=\"wp-block-heading\">2. Quantify your website personas with data findings from qualitative and quantitative research<\/h2><p>You cannot sell anything without knowing your customer. As a SaaS company, you most likely have <a href=\"https:\/\/www.invespcro.com\/blog\/map-buyer-personas\/\">buyer personas<\/a> such as \u2018Startup Pete\u2019, \u2018Agency Andy\u2019, and \u2018Enterprise Sandy\u2019.<\/p><p>However, to create an optimized pricing strategy, you need to quantify these personas with strong data. In the first step, we collected extensive data on customers\u2019 behavior. In this step, we do two things:<\/p><ol><li>Start looking for patterns in our collected data<\/li><li>Link these general patterns to our visitors\u2019 personas<\/li><\/ol><p>You should ask yourself several things:<\/p><ul><li>What value proposition does each buyer persona care about the most?<\/li><li>Are those buyer personas willing to pay the prices that I set?<\/li><li>Do I know the top features used by each persona?<\/li><li>Do I know the least-used features for each persona?<\/li><li>What is the LTV (Customer LifeTime Value) for each persona?<\/li><li>What is the CAC (Cost of Acquisition) for each persona?<\/li><li>What factors does my CAC depend on?<\/li><li>How does the purchase process work for each buyer persona?<\/li><\/ul><p>Answering these questions is critical to setting your pricing strategy and your business.<\/p><p>What if you do not have answers to all these questions?<\/p><p>If you do not have the answers to all these questions right away, then start with creating estimates. That is better than ignoring the question altogether. Your next task is to justify your estimates using the data you have obtained. After quantifying buyer personas, you should dig deeper into the problem areas your business could face.<\/p><p>The chart below, \u201cBuyer Persona Problem Areas,\u201d prepared by PriceIntelligently, provides further details on the types of problem areas that occur in SaaS Business and how to address them.<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97478\" title=\"buyer-persona-problem-areas - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/buyer-persona-problem-areas.png\" sizes=\"(max-width: 478px) 100vw, 478px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/buyer-persona-problem-areas.png 478w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/buyer-persona-problem-areas-300x270.png 300w\" alt=\"buyer personal problem areas\" width=\"478\" height=\"430\" \/><\/figure><p>Image source:\u00a0Price Intelligently<\/p><p>The problems that you, as a SaaS company, could face are probably included in the 4\u00d74 matrix above.<\/p><p>For example, let\u2019s say you are having problems with low acquisition volume. In this case, if your value proposition is unclear or you are using misaligned channels that confuse potential customers or make them fearful about what you are offering, then your pricing structure should align with your value proposition and your brand promise to avoid confusion or unnecessary fear.<\/p><p>As another example, if you are struggling with low conversions, this is likely because you did not set price tiers by considering each buyer persona. In other words, you did not set price-sensitive tiers that can meet a significant number of customers. To overcome this situation, you should conduct price sensitivity studies to plan something that addresses customers&#8217; needs and wants.<\/p><blockquote class=\"wp-block-quote\"><blockquote class=\"wp-block-quote\"><p><em>Without quantified buyer personas you will set your revenue on fire<\/em><\/p><p>Price Intelegently<\/p><\/blockquote><\/blockquote><p>Look at this case study by\u00a0<a href=\"http:\/\/www.conversion-rate-experts.com\/earth-class-mail-case-study\/\">Conversion Experts<\/a>. Reminding visitors of the service value, outlining service features again, and adding a money-back guarantee incentive led to a 57% increase in leads for Earth Class Mail. In this example, you can see how you can improve the number of leads by simply working with the value and features without changing the pricing itself.<\/p><p>As you can see, the original page is straightforward; it goes straight to business, having prices in the above-the-fold area. All explanations are under the prices.<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97479\" title=\"earth-class-mail - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/earth-class-mail.png\" sizes=\"(max-width: 343px) 100vw, 343px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/earth-class-mail.png 343w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/earth-class-mail-118x300.png 118w\" alt=\"earth class mail\" width=\"343\" height=\"869\" \/><\/figure><p>Image source:\u00a0<a href=\"http:\/\/www.conversion-rate-experts.com\/earth-class-mail-case-study\/\">Conversion Experts<\/a><\/p><p>In the challenger,\u00a0<a href=\"https:\/\/www.invespcro.com\/blog\/conversion-rate-optimization-questions-quora\/\">Conversion Experts<\/a>\u00a0explained\u00a0<span style=\"box-sizing: border-box; margin: 0px; padding: 0px;\">the\u00a0<a href=\"https:\/\/www.invespcro.com\/blog\/increasing-conversion-rate-through-value-proposition\/\" target=\"_blank\" rel=\"noopener\">value proposition again<\/a><\/span>, reminded you of the features included with every plan, and added a money-back guarantee. It turned out that if you remind your website visitors about the value you bring them, they are more likely to convert.<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97480\" title=\"earth-class-mail-challenger - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/earth-class-mail-challenger.png\" sizes=\"(max-width: 339px) 100vw, 339px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/earth-class-mail-challenger.png 339w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/earth-class-mail-challenger-117x300.png 117w\" alt=\"\" width=\"339\" height=\"869\" \/><\/figure><p>Image source:\u00a0<a href=\"http:\/\/www.conversion-rate-experts.com\/earth-class-mail-case-study\/\">Conversion Experts<\/a><\/p><figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97481\" title=\"SaaS-key-value-metric - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/SaaS-key-value-metric-1024x350.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/SaaS-key-value-metric-1024x350.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/SaaS-key-value-metric-300x103.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/SaaS-key-value-metric-768x262.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/SaaS-key-value-metric.png 1308w\" alt=\"\" width=\"1024\" height=\"350\" \/><\/figure><h2 class=\"wp-block-heading\">3. Define your SaaS key value metric<\/h2><p>After we have learned what is important to our customers and what makes them tick, we have to decide on the metrics we will use to set our prices. Here, the concept of a value metric comes into play.<\/p><p><a href=\"http:\/\/www.funnelenvy.com\/blog\/develop-optimize-profitable-saas-pricing-strategy\/\">Value metric<\/a> is what and how you charge for your service, and how and where your buyer perceives value from it (price per user, per visit, transactions per second, money per click, e-mail subscription, bandwidth, timeliness\/speed, etc.). In simple words, a value metric is the thing that your customers value the most about your business. <a href=\"http:\/\/www.funnelenvy.com\/blog\/develop-optimize-profitable-saas-pricing-strategy\/\">Value metric<\/a>\u00a0is the foundation of your pricing model.<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97482\" title=\"value-metric-1 - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/value-metric-1.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/value-metric-1.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/value-metric-1-300x123.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/value-metric-1-768x315.png 768w\" alt=\"value metric\" width=\"1024\" height=\"420\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/www.chargebee.com\/blog\/saas-pricing-and-value-metrics\/\">Chargebee<\/a><\/p><p>To put it simply, the image above illustrates two different libraries: one charges $10 per book, and the other charges $20 per month. In this case, one of the libraries sets its pricing based on the number of books it lends for unlimited time. The other library sets its pricing based on the rental period and an unlimited number of books you can take during that period. In this case, the number of books and the rental period are the value metrics.<\/p><p>Let\u2019s take a look at the pricing page from CrazyEgg to better understand the value metric and other components that affect\u00a0pricing.<\/p><figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97483\" title=\"crazy-egg-pricing - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/crazy-egg-pricing-1024x483.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/crazy-egg-pricing-1024x483.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/crazy-egg-pricing-300x141.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/crazy-egg-pricing-768x362.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/crazy-egg-pricing.png 1133w\" alt=\"crazy egg pricing\" width=\"1024\" height=\"483\" \/><\/figure><p>Image source: CrazyEgg<\/p><p>The value metrics CrazyEgg uses are visits per month, the number of active pages, and reporting frequency. These are the key value metrics.<\/p><p>At the same time, there are a few other features that act as secondary price differentiators: advanced filtering, mobile heatmaps, priority email support, and multiple user accounts.<\/p><p>CrazyEgg\u2019s four different pricing tiers (Basic, Standard, Plus, and Pro) are categorized for different business types\/sizes. If you are a small startup or a small business, then the basic package offers 10,000 visits per month, 10 active pages, and a daily report. Plus and Proo packages, on the other hand, are designed with more features for larger businesses. These larger packages offer additional enterprise features such as advanced filtering, mobile heat maps, a higher number of visits per month, a higher number of active pages, and more frequent reporting.<\/p><p>To sum up:<\/p><ul><li>After studying your audience, define the value metrics you will use to create your price tiers. The value metrics you use depend on the nature of your business (e.g., storage space, number of emails sent, page views, and users).<\/li><li>Think about secondary features that you could use for pricing.<\/li><\/ul><figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97484\" title=\"create-saas-pricing-tiers - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/create-saas-pricing-tiers-1024x369.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/create-saas-pricing-tiers-1024x369.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/create-saas-pricing-tiers-300x108.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/create-saas-pricing-tiers-768x277.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/create-saas-pricing-tiers.png 1311w\" alt=\"SaaS Pricing tiers\" width=\"1024\" height=\"369\" \/><\/figure><h2 class=\"wp-block-heading\">4. Create SaaS pricing tiers<\/h2><p>At this point, you are ready to create a pricing structure. There are a few steps that you have to take here:<\/p><h2 class=\"wp-block-heading\">1. Define the minimum amount a customer must pay to cover your costs.<\/h2><p>While this might sound easy, there is a lot involved here.<\/p><p>Let\u2019s start with a simple question: What is the cost to run a single customer?<\/p><p>At this point, we are focused on the variable cost that comes with a new customer. Most likely, these costs would be based on the value metrics you defined. At its lowest level, it might be your server and support costs.<\/p><h2 class=\"wp-block-heading\">2. Define the maximum amount a customer is willing to pay for your software<\/h2><p>There are some considerations customers keep in mind when evaluating how much they are willing to pay for a subscription.<\/p><p>Before subscribing:<\/p><ol><li>The perceived value of the software before using it: before using the software, the potential customer will have to make an educated estimation of how much value your software brings.<\/li><li>The cost of moving to your software: while this does not apply in all circumstances, you should pay close attention to it. How much will it cost the new subscriber to move to your platform? For enterprise software, sometimes there are conversion and data transfer costs. There are many times when the cost is more than the dollars a customer pays. Sometimes, the customer might lose data if they switch to a new platform.<\/li><li>The total cost of running your software: the potential customer will likely incur additional costs. Although they are not paying those costs to you, they are a consideration when using your software. Take, for example, paying for an Oracle license. The cost goes beyond the software itself. The company must account for staff training, the cost of new positions, maintenance costs, etc. How about a chat software such as LivePerson or Olark \u2013 ? There the cost of having thearson wh,o will respond to cua personnquiries.<\/li><\/ol><p>Post-subscription and use:<\/p><ol><li>The actual value of the software: After having the software in operation, the customer is most likely to be y able to identify the value your software brings.<\/li><li>The cost of maintaining the software: How much money, time, and staff should your subscribers put into continuing to use your software?<\/li><li>The opportunity cost of switching to another solution: What would it cost for a subscriber to switch to another solution?<\/li><\/ol><h2 class=\"wp-block-heading\">3. Assess competitive pricing<\/h2><p>In most cases, it is difficult to compare pricing in a SaaS model. This is especially the case when companies use different value metrics.<\/p><p>At the same time, do not disregard your competitors, because your potential customers will not ignore them.<\/p><p>There are two ways to set prices. Cutting your prices compared to your competition. This seems simple enough. However, you need to ensure you are providing the same value as your competitors.<\/p><p>We are not big advocates of reducing subscription prices to capture customers. You should charge customers the highest possible amount while providing them with the highest value.<\/p><p>Another approach is to increase your prices compared to your competitors. In addition to the additional revenue generated, done correctly, this might help drive a higher perceived value from your software.<\/p><p>Have a look at this case study. Server Density is a website monitoring software. They decided to test their hypothesis that iraisingprices wwouldreduce the number of free sign-ups and increase total revenue.<\/p><p>The original page looked like this:<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97485\" title=\"sever-density - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/sever-density.png\" sizes=\"(max-width: 550px) 100vw, 550px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/sever-density.png 550w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/sever-density-300x249.png 300w\" alt=\"sever density pricing\" width=\"550\" height=\"457\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/vwo.com\/blog\/saas-pricing-ab-test\/\">VWO<\/a><\/p><p>It has a pricing structure that offers discounts depending on the number of servers and websites. This pricing model was oriented toward single-server owners and didn\u2019t cater well to most of their customer base, which had an average of seven servers.<\/p><p>The company decided to test package pricing with the lowest package starting at $99 for 10 servers. There was a drop in prices because, under the old pricing model, 10 servers cost $130; however, the new pricing model was intended to increase the average order value.<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97486\" title=\"sever-density-2 - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/sever-density-2.png\" sizes=\"(max-width: 550px) 100vw, 550px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/sever-density-2.png 550w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/sever-density-2-297x300.png 297w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/sever-density-2-150x150.png 150w\" alt=\"sever density variation design\" width=\"550\" height=\"555\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/vwo.com\/blog\/saas-pricing-ab-test\/\">VWO<\/a><\/p><p>Thus, they had 24% fewer conversions for free signups, but they managed to attract a high-quality audience and increase the total revenue by 114%:<\/p><figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97487\" title=\"sever-density-test-results - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/sever-density-test-results-1024x277.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/sever-density-test-results-1024x277.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/sever-density-test-results-300x81.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/sever-density-test-results-768x208.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/sever-density-test-results.png 1133w\" alt=\"sever density AB test result\" width=\"1024\" height=\"277\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/vwo.com\/blog\/saas-pricing-ab-test\/\">VWO<\/a><\/p><h2 class=\"wp-block-heading\">4. Map out your pricing tiers<\/h2><p>At this point, you will need to sit down, put all the numbers together, and start figuring out how you are going to accommodate them in your pricing tiers. We typically recommend starting with 3 or 4 pricing tiers. You can further optimize from there.<\/p><p>If you go for three pricing tiers, you could use the following scheme:<\/p><ul><li>One basic that includes around 40-50% of accounts<\/li><li>one that includes next to 30-40%<\/li><li>And then one that includes the last 10-20%.<\/li><\/ul><p>For four pricing tiers, we would recommend this:<\/p><ul><li>a basic that includes around 40% of accounts<\/li><li>Next up including 30%<\/li><li>then the next level up including 20%<\/li><li>And then the last one, including the top 10%.<\/li><\/ul><p>A bit later in this article, we will line up some other best practices for pricing tier creation.<\/p><h2 class=\"wp-block-heading\">5. Align your value metric with pricing tiers based on buyer personas<\/h2><p>At this point, we have collected the following data:<\/p><ol><li>Customer data (qualitative and quantitative research)<\/li><li>Linked customer data with website personas<\/li><li>Defined value metrics<\/li><li>Defined pricing tiers<\/li><\/ol><p>Our final step is to use the outputs of the four previous steps to see how our pricing tiers would work with our SaaS personas.<\/p><p>Let\u2019s take a look at the pricing page from Salesforce:<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97488\" title=\"salesforce-pricing - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/salesforce-pricing.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/salesforce-pricing.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/salesforce-pricing-300x155.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/salesforce-pricing-768x398.png 768w\" alt=\"salesforce pricing page\" width=\"1024\" height=\"530\" \/><\/figure><p>Image source:\u00a0<a href=\"http:\/\/www.funnelenvy.com\/blog\/develop-optimize-profitable-saas-pricing-strategy\/\">FunnelEnvy<\/a><\/p><p>Salesforce offers 4 different pricing tiers with different features that fit specific target customers. In this case, we have Group, Professional, Enterprise, and Unlimited pricing tiers designed to meet the needs of different types of customers. \u00a0For each pricing tier, there are SF lists with detailed features so potential visitors can choose the plan that best suits their needs.<\/p><p>Now take a look at the Highrise ( a competitor of Salesforce) sales page:<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97489\" title=\"Highrise - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Highrise.png\" sizes=\"(max-width: 967px) 100vw, 967px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Highrise.png 967w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Highrise-300x164.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Highrise-768x420.png 768w\" alt=\"highrise pricing page\" width=\"967\" height=\"529\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/highrisehq.com\/pricing\/\">Highrise<\/a><\/p><p>Highrise sets pricing tiers differently, while Salesforce offers all of the products on a per-user basis. Highrise pricing tiers also include multiple user accounts (Up to 6 users, up to 15 users, up to 40 users). If you are a company with 40 users, then the cost of running Highrise is 99\/month (less than $2.5 per user). Using SF for the same number of users will require a minimum investment of $1,000 and could possibly go up to $10,000\/month.<\/p><p>For Highrise, the number of users is set as the key value metric. However, companies choosing between the CRM solutions (SF vs. HighRise) might also consider the number of contracts as another value metric.<\/p><p>As you can see, HighRise limits the number of contacts per pricing tier. So, while they offer a great number of seats per pricing level, they limit the number of levels by the number of contacts available.<\/p><p>Salesforce&#8217;s approach to the pricing page differs from HighRise&#8217;s. SF includes extensive information and details for each pricing tier. HgihRise, on the other hand, is more precise, avoiding potential customer confusion that can arise from more choices. Highrise\u2019s pricing page is simple, and it takes a few seconds to read all the information.<\/p><p>What conclusions can we make from these pages?<\/p><p>Salesforce targets enterprises with a higher number of users and lists pricing tier details that meticulously address analytical personas, most likely mid-level management, who must present arguments for or against a CRM system to their management. At the same time, HighRise is more oriented towartowardspontaneous personas and small business owners who don\u2019t really want to go into too many details aormake decisions based on value metrics oalone<\/p><p>Liveat, another example, is a developer of a live chat feature that allows companies to talk with their website visitors in real time.<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97490\" title=\"Liveperson - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Liveperson.png\" sizes=\"(max-width: 946px) 100vw, 946px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Liveperson.png 946w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Liveperson-300x180.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Liveperson-768x460.png 768w\" alt=\"Liveperson\" width=\"946\" height=\"567\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/www.process.st\/saas-pricing-pages\/\">Process.st<\/a><\/p><p>LivePerson&#8217;s pricing page outlines tiers where value is measured by user value metrics; the company uses a freemium model where the first tier of the product is free. Each tier comes with different levels of support: community support, 24\/5 online chat support, and 24\/7 online chat support. The support level is a good secondary differentiator.<\/p><p>The way LivePerson differentiates its pricing tiers is simple and logical; <em>the more users on the product, the more it charges<\/em>. So, per user, pricing is the primary differentiator. Features like unlimited chats, real-time sentiment analysis, real-time dashboards, and mobile &amp; web messaging are secondary differentiators. As you get more users on the LivePerson platform, the price per user increases. (If you buy the \u201c2 users\u201d product, you need to pay $17.5\/user; if you buy the \u201c3 users\u201d product, you need to pay $21.66\/user.<\/p><p>While I was writing this article, LivePerson was testing new pricing tiers:<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97491\" title=\"liveperson-testing - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/liveperson-testing.png\" sizes=\"(max-width: 486px) 100vw, 486px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/liveperson-testing.png 486w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/liveperson-testing-300x215.png 300w\" alt=\"LivePerson testing\" width=\"486\" height=\"348\" \/><\/figure><p>Image source:\u00a0LivePerson<\/p><p>They changed their pricing structure dramatically; instead of offering free service to 1 user, they introduced tiered pricing for small teams of 1 to 3 people. Still, the value metric is the price per person. They set the ppricesof the \u201c2 users\u201d pnd t3 users\u201d pproductsalmost the same: $47 per person for the \u201c2 users\u201d product and $46.33 for the \u201c3 users\u201d product.<\/p><p>As mentioned earlier in one of the the case studies conducted, they are testing package pricing to increase the average order value (one user can no longer use the software for free),, and they have also limited the free trial period.<\/p><p>Let\u2019s examine Olark, a competitor of LivePerson, to see a different pricing strategy:<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97492\" title=\"Olark - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Olark.png\" sizes=\"(max-width: 736px) 100vw, 736px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Olark.png 736w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Olark-300x206.png 300w\" alt=\"\" width=\"736\" height=\"505\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/www.olark.com\/pricing\">Olark<\/a><\/p><p>Olark\u2019s pricing tiers clearly define the number of users (referred to as \u201coperators\u201d) as their value metrics. The price per user decreases as the subscriber chooses a longer-term commitment (monthly vs annual billing).<\/p><p>For SaaS companies, securing an annual subscription provides greater value and more stable revenue. Notice how Olark highlights the value of the annual plan:<\/p><ol><li>The plan is in the middle and hovers over the other two plans<\/li><li>Contrast CTA<\/li><li>Lower price: $15\/user<\/li><li>5 stars on top of the plane<\/li><li>\u201cSave 12%\u201d copy<\/li><\/ol><p>Don\u2019t forget that per-user pricing may not be the best option in your line of business. You really should understand the value you provide to your users to define key value metrics for pricing.<\/p><figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97493\" title=\"design-your-pricing-page - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/design-your-pricing-page-1024x355.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/design-your-pricing-page-1024x355.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/design-your-pricing-page-300x104.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/design-your-pricing-page-768x267.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/design-your-pricing-page.png 1311w\" alt=\"\" width=\"1024\" height=\"355\" \/><\/figure><h2 class=\"wp-block-heading\">5. Design Your Pricing Page<\/h2><p><em>\u201cShould we display our pricing, or should we ask customers to contact us?\u201d<\/em><\/p><p>We get this question a few times every month. Some companies allow customers to sign up for a free trial of their service, but ask these customers to contact them when it is time to convert to a paid subscription. The rationale is to hide their pricing from competitors or to let the sales rep determine the correct pricing when the pricing structure is complicated.<\/p><p>Let me start by saying that trying to hide your pricing from your competitors is foolish. It is nearly impossible to do that nowadays. If your competitor wants to find out your pricing, in most cases, they can do so with a bit of effort.<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97494\" title=\"inside-sales - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/inside-sales.png\" sizes=\"(max-width: 424px) 100vw, 424px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/inside-sales.png 424w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/inside-sales-300x284.png 300w\" alt=\"Inside sales\" width=\"424\" height=\"402\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/www.slideshare.net\/webjoe\/saa-s-pricingpageblueprint\">SlideShare<\/a><\/p><p>Back in June 2014, <a href=\"http:\/\/labs.openviewpartners.com\/saas-pricing-best-practices\/#.WJGd7LZ96u4\">InsideSales.com<\/a>, a sales acceleration platform that helps companies optimize their revenue, used to ask potential customers to fill out a contact form.<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97495\" title=\"inside-sakes-2 - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/inside-sakes-2.png\" sizes=\"(max-width: 461px) 100vw, 461px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/inside-sakes-2.png 461w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/inside-sakes-2-300x178.png 300w\" alt=\"Inside sales variation\" width=\"461\" height=\"274\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/www.slideshare.net\/webjoe\/saa-s-pricingpageblueprint\">SlideShare<\/a><\/p><p>In December 2014, the company decided to publish its prices online. They used per-user pricing as a value metric. In addition, their pricing tiers were simplified and included a compelling explanation of the product. As of March 2015, the company reached $1.5 B in revenue.<\/p><figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97496\" title=\"Inside-sales-3 - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Inside-sales-3-1024x393.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Inside-sales-3-1024x393.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Inside-sales-3-300x115.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Inside-sales-3-768x295.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Inside-sales-3.png 1129w\" alt=\"Inside sales 3\" width=\"1024\" height=\"393\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/www.slideshare.net\/webjoe\/saa-s-pricingpageblueprint\">SlideShare<\/a><\/p><p>In March 2016, one and a half years later, they cut the price of the lowest tier, \u201cCommunicate,\u201d from $125 to $95 and kept the prices of the other two pricing tiers the same.<\/p><p>So, InsideSales.com made some changes to its pricing policy. First, they decided to make prices open, then they dropped the price of the lowest tier. Most likely, these alterations, especially making prices public, were driven by changing market trends.<\/p><p>There is some logic behind setting out prices clearly for a SaaS product:<\/p><ul><li>You qualify your leads by setting expectations clearly<\/li><\/ul><p>Setting expectations early is always good for a SaaS Company. Leads can see how much your products cost them, whether implementing them requires experience, what options are available, etc.<\/p><ul><li>You can test your pricing strategy<\/li><\/ul><p>When information on prices is available for everyone visiting the website, you can test price points, package configurations, and use messaging that can increase conversion<\/p><ul><li>You can improve your SEO<\/li><\/ul><p>If we consider that most buyers want to know the price firsthand, then making pricing public will drive incremental inbound traffic because buyers like to compare prices across different companies.<\/p><h2 class=\"wp-block-heading\">Define the elements of your pricing page<\/h2><p>How you design your pricing page is up to you. But you should remember that users should be able to grasp your value proposition and pricing in 5 seconds.<\/p><p>If you don\u2019t know where to start, you can have a look at these stats.<\/p><p><a href=\"http:\/\/www.slideshare.net\/webjoe\/saa-s-pricingpageblueprint\">Price Intelligently<\/a> analyzed the top 270 SaaS Companies in terms of their pricing policy.<\/p><p>The study shows the number of pricing tiers each company uses:<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97497\" title=\"distribution-of-plans - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/distribution-of-plans.png\" sizes=\"(max-width: 365px) 100vw, 365px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/distribution-of-plans.png 365w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/distribution-of-plans-300x190.png 300w\" alt=\"distribution of plans\" width=\"365\" height=\"231\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/www.slideshare.net\/webjoe\/saa-s-pricingpageblueprint\">SlideShare<\/a><\/p><p>In total, 55% of the companies use 3 or 4 pricing tiers.<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97498\" title=\"distribution-of-plans-2 - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/distribution-of-plans-2.png\" sizes=\"(max-width: 343px) 100vw, 343px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/distribution-of-plans-2.png 343w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/distribution-of-plans-2-300x220.png 300w\" alt=\"distribution of plans\" width=\"343\" height=\"252\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/www.slideshare.net\/webjoe\/saa-s-pricingpageblueprint\">SlideShare<\/a><\/p><p>In each pricing tier, companies include a different number of features depending on their strategy. This graph shows that 35% use 6-10 features per plan, while 31% use 1-5 features. The remaining 25% of them use 11- 21+ features per plan.<\/p><p>As you see, most SaaS companies have1- 100 features per plan. Many features can be overwhelming for customers, while a few features could cause questions and misunderstanding. You should not baffle your potential customers with too much information, and at the same time, you should not leave any room for them to guess.<\/p><div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" class=\"wp-image-8022\" title=\"21 - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/21-2.jpg\" alt=\"\" \/><\/figure><\/div><p>Image source:\u00a0<a href=\"https:\/\/www.slideshare.net\/webjoe\/saa-s-pricingpageblueprint\">SlideShare<\/a><\/p><p>When it comes to subscription models,moste SaaS companies use only monthly pricing; however, very few use only annual pricing. We are big fans of offering users the option to pay for an annual subscription at a discounted rate.<\/p><p>Here is an example of this:<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97499\" title=\"Accion - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Accion.png\" sizes=\"(max-width: 602px) 100vw, 602px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Accion.png 602w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Accion-300x257.png 300w\" alt=\"Accion\" width=\"602\" height=\"515\" \/><\/figure><p>Image source:\u00a0Accion<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97500\" title=\"custom-plans - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/custom-plans.png\" alt=\"custom plans\" width=\"270\" height=\"252\" \/><\/figure><p>The Majority of SaaS companies do not use custom pricing. However, by having custom plans,, you ensure that you do not lose enterprise clients. Enterprise client brings larger revenue and lends more credibility to your business.<\/p><p>Image source:\u00a0<a href=\"https:\/\/www.slideshare.net\/webjoe\/saa-s-pricingpageblueprint\">SlideShare<\/a><\/p><p>As you can see, 46% of the companies use high-profile clients or testimonials.<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97501\" title=\"high-profile-clients - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/high-profile-clients.webp\" alt=\"high profile clients\" width=\"228\" height=\"183\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/www.slideshare.net\/webjoe\/saa-s-pricingpageblueprint\">SlideShare<\/a><\/p><p>One in four SaaS companies includes videos on its pricing page. Integrating a video could be a nice way to further explain the value of your product and convince customers to purchase your service. It would be a good idea to A\/B test to see if it generates more sales.<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97502\" title=\"include-video - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/include-video.png\" sizes=\"(max-width: 312px) 100vw, 312px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/include-video.png 312w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/include-video-300x245.png 300w\" alt=\"\" width=\"312\" height=\"255\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/www.slideshare.net\/webjoe\/saa-s-pricingpageblueprint\">SlideShare<\/a><\/p><p>Here is our compilation of elements a <a href=\"https:\/\/www.slideshare.net\/search\/slideshow?searchfrom=header&amp;q=SAAS+Pricing\">good pricing page<\/a>\u00a0should have:<\/p><ul><li><strong>Three or four pricing tiers:\u00a0<\/strong>Most SaaS companies use 3-4 tiers.<\/li><li><strong>Monthly pricing plans (70% of the companies) or monthly and annual pricing plans (18% of the companies)<\/strong><\/li><li><strong>Up to ten features per package (66% of the companies):\u00a0<\/strong>no matter how many features you decide to list, you should keep in mind the following:<ul><li>The features you select to show should arouse your customers\u2019 curiosity about your product<\/li><li>The number or the quality of your features should not overwhelm the customers<\/li><\/ul><\/li><li><strong>Around 400 words on the page:\u00a0<\/strong>Although the word count varies depending on your product, it should be boiled down, and the data should be compacted.<\/li><\/ul><h2 class=\"wp-block-heading\">Optimize your SAAS page design<\/h2><h3 class=\"wp-block-heading\">1. Use charm pricing<\/h3><p>What would we do without Old good charm pricing? Nowadays you rarely see prices ending in 0; most of them are \u201ccharmed\u201d and end in 9, 7, or 5, creating the impression that the price is lower than it is (who reads after the first digit anyway).<\/p><p>William Poundstone, in his book\u00a0<a href=\"https:\/\/www.amazon.com\/dp\/080909469X\/ref=cm_sw_su_dp\">Priceless,<\/a> claimed that charm pricing increases sales by 24% on average. But which one is better: 9,7 or 5?<\/p><p>Eric Anderson and Duncan Simester found in their research that items tagged at $39 sell better than cheaper items tagged at $34. They also found out that the only thing that can outperform prices ending with 9 is the price emphasizing the original price, like on Xero, accounting software, pricing page:<\/p><figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97503\" title=\"Priceless - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Priceless-1024x396.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Priceless-1024x396.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Priceless-300x116.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Priceless-768x297.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Priceless.png 1134w\" alt=\"Xero pricing page\" width=\"1024\" height=\"396\" \/><\/figure><p>If you look around, you will see that most of the SaaS businesses are actually using charm pricing:<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97504\" title=\"liquid-planner-1 - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/liquid-planner-1.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/liquid-planner-1.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/liquid-planner-1-300x196.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/liquid-planner-1-768x502.png 768w\" alt=\"priceless\" width=\"1024\" height=\"669\" \/><\/figure><h3 class=\"wp-block-heading\">2. Use \u201cuseless\u201d pricing plan<\/h3><p>Should your pricing plans be perfectly logical? Not really, if you want to turn your bargain-looking audience into value seekers.<\/p><p>Let\u2019s look at Dan Ariely\u2019s famous example: his amazing book \u201cPredictably Irrational\u201d. He came up with the following subscription offer from The Economist:<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97505\" title=\"predictably-irrational - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/predictably-irrational.png\" sizes=\"(max-width: 432px) 100vw, 432px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/predictably-irrational.png 432w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/predictably-irrational-300x234.png 300w\" alt=\"predictably irrational\" width=\"432\" height=\"337\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/conversionxl.com\/pricing-experiments-you-might-not-know-but-can-learn-from\/\">Conversion XL<\/a><\/p><p>The print and web subscriptions cost the same: 125 dollars. Ariely conducted a study with his 100 MIT students. 16 of them chose option A, and 84 chose option C. Nobody chose the middle option, which seemed to be useless.<\/p><p>So, if nobody will choose the middle option, why have it? He removed it and gave the subscription offer to another 100 MIT students. This is the distribution of their decisions:<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97506\" title=\"Predictably-irrational-2 - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Predictably-irrational-2.png\" sizes=\"(max-width: 509px) 100vw, 509px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Predictably-irrational-2.png 509w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Predictably-irrational-2-300x166.png 300w\" alt=\"predictably irrational\" width=\"509\" height=\"282\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/conversionxl.com\/pricing-experiments-you-might-not-know-but-can-learn-from\/\">Conversion XL<\/a><\/p><p>Most participants chose the first option in the new experiment. So, the middle option played a significant role: it buffered people\u2019s attention and forced them to make a choice. The \u201cuseless\u201d middle option turned bargain hunters into value seekers.<\/p><p>Of course, the data sample was too small to draw any solid conclusions, but it is an interesting point to think about.<\/p><h3 class=\"wp-block-heading\">3. Highlight your best-converting plan<\/h3><p>Use the prime real estate on the page to showcase your best work. In our case, it is the highest-converting pricing plan.<\/p><p>Your goal is to direct visitors\u2019 attention using subtle clues: CTA color, position on the page, size, and the frame&#8217;s badge color, etc.<\/p><p>Look how Spotify draws attention to the premium plan by using contrast colors of the frame, solid color for CTA, \u201crecommended\u201d copy, and a list of benefits:<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97507\" title=\"Spotify-pricing - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Spotify-pricing.png\" sizes=\"(max-width: 768px) 100vw, 768px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Spotify-pricing.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Spotify-pricing-300x218.png 300w\" alt=\"\" width=\"768\" height=\"559\" \/><\/figure><h3 class=\"wp-block-heading\">4. Tailor plan name and description<\/h3><p>When designing a pricing page, you aim to ease the selection process for your future customers. Using just plan names like \u201cBusiness,\u201d \u201cEnterprise,\u201d \u201cBasic,\u201d \u201cPremium,\u201d and so forth might not be enough because they are just words without any substance behind them.<\/p><p>Instead, try to use more descriptive plan names that reflect their target audience,, such as \u201cSmall Business,\u201d \u201cAgency,\u201d etc.<\/p><p>It is also a good idea to describe the target audience of each plan in a brief and carefully crafted phrase, like, for example, Kashflow did it:<\/p><figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97508\" title=\"pricing-plans-example - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/pricing-plans-example-1024x471.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/pricing-plans-example-1024x471.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/pricing-plans-example-300x138.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/pricing-plans-example-768x353.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/pricing-plans-example.png 1132w\" alt=\"Pricing plan from Kashflow\" width=\"1024\" height=\"471\" \/><\/figure><h3 class=\"wp-block-heading\">5. Anchor your prices<\/h3><p>The term \u201canchoring\u201d describes the tendency for people to rely heavily on the first piece of information they receive. In pricing, anchoring sells cheaper items by putting more expensive items next to them. Imagine you see a $2,000 watch next to a $10,000 watch. The $2,000 watch doesn\u2019t seem to be very expensive.<\/p><p>In the example below, Salesforce places the most expensive pricing plan next to three others to highlight the value of the other three plans. Moreover, there is always a chance that some customers will be ready to pay $240 per user per month.<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97509\" title=\"salesforce-CRM-pricing - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/salesforce-CRM-pricing.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/salesforce-CRM-pricing.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/salesforce-CRM-pricing-300x155.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/salesforce-CRM-pricing-768x398.png 768w\" alt=\"Salesforce crm pricing\" width=\"1024\" height=\"530\" \/><\/figure><h3 class=\"wp-block-heading\">6. Address customers\u2019 fears, uncertainties, and doubts<\/h3><p>In most cases, your customers want to be sure that they buy a product that works perfectly. When studying your pricing page, they may have some fears, uncertainties, and doubts (FUDs), and your task is to reassure them and remedy all the FUDs right on the pricing page.<\/p><p>One way to do it is to throw in some big names of your former clients: \u201cIf company X used it, maybe it would be good for my company too.\u201d For instance, this is what you can see on the Dropbox Business pricing page as social proof:<\/p><figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97510\" title=\"DropBox-review-example - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/DropBox-review-example-1024x420.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/DropBox-review-example-1024x420.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/DropBox-review-example-300x123.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/DropBox-review-example-768x315.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/DropBox-review-example.png 1133w\" alt=\"dropbox review example\" width=\"1024\" height=\"420\" \/><\/figure><p>Another type of social proof that you can use on your pricing page is clients\u2019 testimonials, like GetResponse, an email service provider, does:<\/p><figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97511\" title=\"GetResponse-review - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/GetResponse-review-1024x278.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/GetResponse-review-1024x278.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/GetResponse-review-300x81.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/GetResponse-review-768x208.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/GetResponse-review.png 1132w\" alt=\"GetResponse review\" width=\"1024\" height=\"278\" \/><\/figure><p>Then, some of your prospects might still have questions for you. Why not address them straight on the pricing page? Look how Hotjar, a heatmap, polling, and video recording software, did it. They have an FAQs section straight under the pricing tiers:<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97512\" title=\"GetResponse-FAQ - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/GetResponse-FAQ.png\" sizes=\"(max-width: 768px) 100vw, 768px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/GetResponse-FAQ.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/GetResponse-FAQ-300x267.png 300w\" alt=\"GetResponse FAQ\" width=\"768\" height=\"683\" \/><\/figure><h3 class=\"wp-block-heading\">7. Test<\/h3><p>You never know what will actually work for your website visitors. That\u2019s why it is good to test your pricing page just to make sure it offers the best possible experience.<\/p><p>Look at the case study below. A simple change in the CTA&#8217;s position on the page made it shine.<\/p><p>RJ Metrics, a data analytics and infrastructure company, had some reservations about its pricing page and the effectiveness of how it communicates value.<\/p><p>They used the number of people in the client\u2019s database as a value metric. The price didn\u2019t depend on how many of the client&#8217;s employees were using the system; it depended on how many customers the client had. They selected this model to avoid any reservations from the client regarding adding more users to the system.<\/p><div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" class=\"wp-image-8037\" title=\"36 - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/36.jpg\" alt=\"\" \/><\/figure><\/div><p>Image source: Crazy Egg<\/p><p>While the page did a good job of communicating the pricing strategy, it didn\u2019t do much to show tailored pricing because, at that time, the company\u2019s goal was to serve any client, even the smallest one.<\/p><p>After looking for some inspiration, they discovered Mailchimp\u2019s pricing page for high-volume clients:<\/p><figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97513\" title=\"MailChimp-2 - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/MailChimp-2-1024x456.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/MailChimp-2-1024x456.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/MailChimp-2-300x134.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/MailChimp-2-768x342.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/MailChimp-2.png 1134w\" alt=\"Mailchimp pricing plan\" width=\"1024\" height=\"456\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/blog.crazyegg.com\/2014\/03\/18\/pricing-page-optimization\/\">Crazy Egg<\/a><\/p><p>Mailchimp asks the user to enter the estimated number of monthly subscribers, then provides some options. Visitors were less likely to feel overwhelmed by pricing options that were not relevant to them.<\/p><p>So, to make their pricing look less rigid, RJMetrics changed its pricing page:<\/p><figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-97514\" title=\"RJ-metrics - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/RJ-metrics.png\" sizes=\"(max-width: 632px) 100vw, 632px\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/RJ-metrics.png 632w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/RJ-metrics-300x207.png 300w\" alt=\"\" width=\"632\" height=\"436\" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/blog.crazyegg.com\/2014\/03\/18\/pricing-page-optimization\/\">Crazy Egg<\/a><\/p><p>62.5% of visitors engaged with the input field, whereas only 1 interacted with the Sign Up button on the old pricing page.<\/p><p>The Input field in the new design captured visitors&#8217; attention,, while the Sign Up did not.<\/p><p>RJMetics decided to refine the test and revised the variation so eventually, they:<\/p><ol><li>Moved the Sign Up button above the fold.<\/li><li>Added a headline: \u201cPriced to Scale with You\u201d<\/li><\/ol><p>The new headline on the page was a clever way of saying: \u201cEverything is under your control.\u201d<\/p><figure class=\"wp-block-image aligncenter\"><img decoding=\"async\" class=\"wp-image-8063\" title=\"39 - Invesp\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/39-1024x794.jpg\" alt=\"SaaS Strategy \" \/><\/figure><p>Image source:\u00a0<a href=\"https:\/\/blog.crazyegg.com\/2014\/03\/18\/pricing-page-optimization\/\">Crazy Egg<\/a><\/p><p>This challenger\u00a0<strong>beat the original by 310%<\/strong><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-cffe9e8 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"cffe9e8\" data-element_type=\"section\" data-e-type=\"section\" data-settings=\"{&quot;background_background&quot;:&quot;gradient&quot;}\">\n\t\t\t\t\t\t\t<div class=\"elementor-background-overlay\"><\/div>\n\t\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-f663616\" data-id=\"f663616\" data-element_type=\"column\" data-e-type=\"column\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-84d0e57 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"84d0e57\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-af7903b\" data-id=\"af7903b\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-1556e47 elementor-widget elementor-widget-image\" data-id=\"1556e47\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"800\" height=\"377\" src=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Group-11-3-1024x483.png\" class=\"attachment-large size-large wp-image-99126\" alt=\"\" srcset=\"https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Group-11-3-1024x483.png 1024w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Group-11-3-300x141.png 300w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Group-11-3-768x362.png 768w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Group-11-3-1536x724.png 1536w, https:\/\/www.invespcro.com\/blog\/images\/blog-images\/Group-11-3.png 1641w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-c5f53af\" data-id=\"c5f53af\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-e7cc7e6 elementor-widget elementor-widget-heading\" data-id=\"e7cc7e6\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Know exactly what\u2019s stopping conversions\n <span style=\"color:#FF9800\"> \u2014and how to fix it.<\/span><\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-009f7a5 elementor-align-center elementor-widget elementor-widget-button\" data-id=\"009f7a5\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"button.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-button-wrapper\">\n\t\t\t\t\t<a class=\"elementor-button elementor-button-link elementor-size-sm\" href=\"https:\/\/offer.invespcro.com\/conversion-rate-optimization\/benchmark\/\" target=\"_blank\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t\t\t\t<span class=\"elementor-button-text\">GET A FREE CONVERSION ASSESSMENT<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-943b9d4 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"943b9d4\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-21d9cd5\" data-id=\"21d9cd5\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-80d2a86 elementor-widget elementor-widget-text-editor\" data-id=\"80d2a86\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h2 class=\"wp-block-heading\">Over to you<\/h2><p>Optimizing SaaS pricing strategy is a hard nut to crack, but it is a must for SaaS success. For SaaS businesses, the main rule for pricing optimization is to understand your customers and transfer them into pricing tiers which allow them to use the features they need at a price they are ready to pay. However, optimizing the essence, one shouldn\u2019t forget about appearances: the way you present your prices is as equally important as the prices you charge.<\/p><p>Editor note: This article was a collaboration of several team members. Special thanks goes to Fatih Boran,\u00a0Maria Volkova, and Hajar Tarhnchi.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 26<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span>Disclaimer: This section is a TL;DR of the main article and it\u2019s for you if you\u2019re not interested in reading the whole article. On the other hand, if you want to read the full blog, just scroll down and you\u2019ll see the introduction. Finding the right pricing strategy and price points for your SaaS (Software [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":97537,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":["post-97473","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cro"],"_links":{"self":[{"href":"https:\/\/www.invespcro.com\/blog\/wp-json\/wp\/v2\/posts\/97473","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.invespcro.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.invespcro.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.invespcro.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.invespcro.com\/blog\/wp-json\/wp\/v2\/comments?post=97473"}],"version-history":[{"count":3,"href":"https:\/\/www.invespcro.com\/blog\/wp-json\/wp\/v2\/posts\/97473\/revisions"}],"predecessor-version":[{"id":101755,"href":"https:\/\/www.invespcro.com\/blog\/wp-json\/wp\/v2\/posts\/97473\/revisions\/101755"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.invespcro.com\/blog\/wp-json\/wp\/v2\/media\/97537"}],"wp:attachment":[{"href":"https:\/\/www.invespcro.com\/blog\/wp-json\/wp\/v2\/media?parent=97473"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.invespcro.com\/blog\/wp-json\/wp\/v2\/categories?post=97473"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.invespcro.com\/blog\/wp-json\/wp\/v2\/tags?post=97473"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}