SaaS pricing isn’t easy. Get it wrong, and it can seriously hold you back, inhibiting growth and meaning that all your hard work and effort (literally) isn’t paying off.
It’s little wonder that so many companies struggle with their pricing: on average companies spend only 6 hours ever thinking about their prices. But investing time and effort to get it right can reap rewards for your business. In fact, a 1% improvement in price can lead to an 11% increase in profit.
We’ve seen countless SaaS companies making mistakes with their pricing (including big names like Eloqua), and have identified 5 big pricing mistakes that we see time and time again.
Are These 5 Pricing Mistakes Putting You Under pressure?
1) Overpricing – you’re charging too much and delivering too little value for your customers. This normally means customers don’t stick with you for very long (if they sign-up at all).
2) Under-pricing – you’re charging too little for what you’re delivering and the work involved: the price is unsustainably low and puts your company under financial strain.
3) Unclear pricing – does your pricing only make sense to people who have worked on your product? Do your customers need an economics degree and a dictionary to even start making sense of your pricing page?
4) Hidden pricing – have you taken your pricing off your website altogether? Hiding this vital piece of information from your customers is a major turn-off: it makes them wonder what else you’re hiding from them.
5) Outdated pricing – when did you last update your pricing? As you improve and develop your service, these improvements should be reflected in your prices. Think of it this way: if you’ve not looked at your pricing for 12 months, you’re basically getting no reward for your last year’s work.
Sound Familiar? It's Time to Improve Your Pricing Strategy
Sorting out your pricing is key to growing your SaaS startup. There are several things you need to get right, that form the basis of a strong pricing strategy:
- Identifying the right value metric
- Using an appropriate, sustainable and scalable pricing model
- Knowing how to change your prices
- Having an appropriate number of pricing tiers
But changing your pricing strategy depends on you nailing two crucial steps: understanding whether you need to change your price; and knowing how to actually implement a pricing change.
That’s why we've developed a free five-week pricing course to help you get to grips with the how and the why of changing your price. You will get actionable tips and advice to help you understand:
- Whether you should change your price
- What a great pricing page looks like
- How to change your pricing strategy
- What’s the best pricing model for your business
Fix your SaaS pricing in just five weeks, and claim your space on this email course by clicking the button below.