I spent 40+ hours researching everything Patrick Campbell
(founded & sold Profitwell for 200M+) ever published on SaaS Pricing.
Here are 5 insights to nail your SaaS pricing:👇
(founded & sold Profitwell for 200M+) ever published on SaaS Pricing.
Here are 5 insights to nail your SaaS pricing:👇
Comments
Why use a value metric? 🤔
✅ Churn tends to be 20-25% lower
✅ Expansion Revenue is typically 2x higher
Once you have figured out your value metric, fair expansion revenue is built into the system.
Typically companies only increase their prices once every 3 years, even though they build out more features and consistently provide additional value.
As long as your NPS >20, you can feel comfortable increasing your prices yearly. 🥳
📈Have 1 initiative per quarter to get APRU up.
This doesn't mean you need to increase prices each time, but tackle one opportunity like localization, packaging, or fine-tuning your value metric to grow your APRU.
Default answer: Don't Discount! ❌
If you decide to use a discounting strategy, follow these rules:
✅ Be discrete: Don't tell everyone. Those paying the full price may feel undervalued.
...
✅ Limit in scope and time: Add a sense of urgency to make customers feel the need to buy NOW.
✅ Vary your offers: If your offers are predictable, customers will wait for the next discount to go live.
Pricing touches every part of your company, as product, marketing, and sales all have to be aligned with the eventual positioning, packaging, and pricing strategy.
But how can you stick to this alignment?