3 principles of killer SaaS pricing pages
You love your product—it’s been your baby from day one. You pour all your time, energy and money into building it.
Sticking a price tag on this effort is harder in some ways: How do you put a number on all of your hard work and energy? How do you communicate enduring value with a dollar sign?
When it comes to your pricing page, you’re stumped. You don’t want to think about it, and shrug the problem off, focusing back on your product.
Don’t. Everything you’ve worked towards has led up to this point. The pricing page is where the magic happens—converting leads into paying customers. It’s the last door a customer has to walk through to get to your product. Your entire acquisition funnel points to the pricing page. It’s what keeps your business going—and it’s absolutely critical that you get it right.
You’ve built an exclusive, high-value product, and this needs to be communicated on your pricing page. A good pricing page will increase both your revenue and conversion rate, optimize your sales process by qualifying leads, and will lower your churn and customer acquisition cost.
Here’s how to make a killer pricing page.
1. Keep it simple stupid
When you’ve invested tons of time and effort in development, and bulked up your product with off-the-hook API integrations, migration tools, and crazy analytic features, you’ll want to highlight each of these features in your pricing page.
Fight this temptation. You’ve got around 8 seconds to catch your customer's attention—don’t waste them. Make your pricing page easy to use and intuitive for users. It should communicate the message you want to get across.
As Tomasz Tunguz points out, a good pricing plan needs to “appear simple and logical to the customer.” Under the hood, it might be extremely complex, with varying prices for different customer sizes and product features—but on your pricing page, the numbers you quote need to clearly match customer expectations for value.
MailChimp’s pricing page is a fantastic example of this.
It’s streamlined, easy to use, and looks amazing. Prospective buyers looking at the page slide easily into the pricing package they need.
If they want to find out more, they can take a deeper look—which is where MailChimp’s pricing actually becomes quite complex. Buyers either pick monthly plans, based on the number of email subscribers, or pay-as-you-go plans, based on the number of emails sent.
MailChimp’s value proposition is based on the number of emails sent, and its pricing page easily reflects this. Hardcore users have the option to dig deeper and explore which specific features will lead to their business success.
But for average users, MailChimp’s earlier pricing page seamlessly splits them into pre-sorted categories, making the purchasing experience easy and intuitive.
Takeaway: When you build your pricing page, make sure it looks amazing and pops off the page. Most buyers won’t need to know in detail about all the features included in each package—give them what they need to make the decision. Remove roadblocks from your pricing plan. You can always show off more detailed feature comparison further into the pricing page experience. The more complex your pricing plan seems, the more tangled your value proposition grows, and the more buyers will hesitate to purchase your product.
2. The scalable plan
Another great pricing page characteristic is to price based on a value metric—the core value that customers get out of a product. This could be the number of contacts in a CRM platform, number of active users, storage space, and so on.
Customers essentially pay based on how much they get out of your product. Pricing scales based on usage of the product.
One of the difficulties of using a value metric in your pricing plan is it can go against principle #1—keep it simple. If you scale pricing based on a single value metric, you add another dimension to the pricing of your product, and you need to make it clear to customers what they’re paying for on the pricing page.
Dropbox’s answer to this problem is to split its pricing into 3 tiers based on the value metric of storage—Basic (2GB), Pro (1TB), and Business (Unlimited). Customers know exactly what they get at each price point.
Another common solution is to price per seat, or number of users. For example, Asana, a product management and team collaboration platform, scales pricing based on the number of people you have on your team. It has an easy-to-use pricing slider:
Pricing around a value-metric can often be confusing for users, who’ve come to expect a more traditional, multi-tiered pricing plan. Asana’s pricing slide cuts through this confusion, and helps the user understand that as they grow with the service, so does the price.
With Asana, all paying customers get the same feature set. Asana’s subscription based pricing is tiered so that larger teams who grow and get more value out of Asana pay more per user than smaller teams. A five member team, for example, pays around $4 per user, while a sixty member team pays around $8 per user. That said, there are good reasons against pricing per user; the number of users is not always where value is derived for customers and it sets a negative incentive for adoption among your team.
Takeaway: There are a bunch of advantages to pricing based on a value metric. It lowers the entry barrier for new customers, making it easy for them to pay based on their current needs. It’s also a great way to get a lot of adoption early on, without having to create a free tier to pull customers in—and it’s never too early to start charging your customers.
And as their businesses grow, and they use the product more, their needs increase. Their pricing is automatically scaled to reflect that. The value-metric pricing plan allows for increased expansion revenue, without having to upsell existing customers to higher-tier plans.
3. Value over price
Even if you don’t explicitly use a value metric to scale pricing, you still need to have a solid understanding of the core benefits that your product provides to customers across different plans. Your product’s pricing should always be based on value.
Part of the difficulty of using a scalable plan like Asana’s is it reduces your pricing model to a single metric. This doesn’t necessarily reflect the various ways in which your product provides value to its users. It also doesn’t allow you to charge for all these extra ways you could be providing value.
Giving customers the option to pay more based on their needs, and including “premium” tiers like business or enterprise, is a great way to tap into this extra source of revenue.
Slack, the popular team messaging app, does this brilliantly. Its pricing page factors in the value metric of users per team, but also includes more features as you go up the Free, Standard, Plus and Enterprise plans:
Slack’s pricing page makes feature differentiation really clear across each tier, so that customers who arrive at the pricing page know exactly which solution they need for their business.
For example, Slack’s Plus package targets larger businesses, which often require more secure and stable connections, and are legally obligated to archive their messages. The Plus plan’s SAML integration and Compliance export features are must-haves for these buyers.
Not everyone needs premium options—but a lot of people want them.
Often, pricing too low will alienate certain buyers, who will perceive the value of your product as “cheap.” Make them feel special. Give them the option to give you more money, with premium and enterprise tiers.
Another way Slack’s pricing page maximizes revenue is by offering a discount for annual prepayment—which you should too if you don’t already. By getting customers to pay for the year upfront, they add significantly to your cashflow, and essentially lend you money for free. They’re more invested in the product, and will churn less frequently.
Takeaway: Don’t give in to the temptation to price certain features based on how difficult they were to build, or have a checklist with every feature checked. Instead, focus on what each of your buyer personas needs to succeed, and price accordingly. Buyers with larger budgets are often uncomfortable paying for “cheaper” options. Give them premium packages and the option for annual prepayment.
If you price too low, or don’t allow buyers the opportunity to pay more, you’ll miss out on a potentially huge source of revenue. In doing so you’ll take away from your ability to improve what matters: your product.
Pricing never ends
Pricing is a process that you need to optimize continually. There's no single right answer to the question of how to price your SaaS product. The pricing model you use should change and grow as your business does. Constantly look to your product to see what key value metrics it provides for your customers, and align your pricing strategy accordingly.
Your pricing page is no different. Your pricing page closes deals for your SaaS business, all on its own. It's the culmination of your entire funnel—give it the attention it needs. Test it constantly. By doing so, you’ll see higher conversion rates and drive revenue growth, setting your SaaS business on the road to long term prosperity.