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 more complicated 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?
You're stumped about your pricing page. You don’t want to think about it, so you shrug the problem off and focus 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 keeps your business going—and you must get it right. If you are curious about how different pricing strategies can influence your revenue, use our revenue growth calculator for insights.
You’ve built an exclusive, high-value product that needs to be communicated on your pricing page. A good pricing page will lower your churn and customer acquisition costs.
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 feature on 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.
Tomasz Tunguz states that a good pricing plan must “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 match customer expectations for value clearly.
MailChimp’s pricing page is a fantastic example of this.
It’s streamlined, easy to use, and looks amazing. Prospective buyers are 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, where MailChimp’s pricing 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 can explore which specific features will lead to their business success.
However, for average users, MailChimp’s earlier pricing page seamlessly splits them into pre-sorted categories, making the purchasing experience easy and intuitive.
2. The Scalable Plan
Another great pricing page characteristic is pricing 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, the 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.
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 three 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 that 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.
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 that 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, and 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.
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 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.
Are you looking to drive revenue growth? Learn how CRM can be your solution.
