Stripe Atlas, which helps internet companies get up and running, frequently gets asked questions by software-as-a-service entrepreneurs on how to improve the pricing and packaging of their SaaS products.
After publishing our recent guide to low-touch and high-touch SaaS businesses, we had a Q&A session in our private forums for SaaS entrepreneurs specific to pricing and packaging.
Some of the entrepreneurs generously allowed us to talk about their pricing strategy publicly, to help the next generation of SaaS companies.
This advice is distilled from my career in running and consulting in various SaaS companies. Your mileage may vary; I’d encourage you to experiment often and boldly with pricing, as it is the easiest needle to move in your company. (The tendency of most SaaS companies is to set prices without much consideration and leave them alone for years at a time. I’d encourage you to revisit them quarterly.)
By coincidence, most of the companies which we’ll be talking about sell SaaS on a low-touch model. Pricing for high-touch SaaS is similarly nuanced; we’ll cover it in the future.
We’ve organized the case studies based on the primary market for the products.
Pricing is easy enough to understand.
Packaging is a jargon word coming from marketing of consumer packaged goods, like soap. In SaaS, it refers to a company which has one particular underlying product which they make available to different customers in slightly different ways at different price points.
In low-touch SaaS, the most common way packages are presented are as different columns in a pricing grid, with each column corresponding to a plan, offered at a different price, with differential access to features or maximum allowable usage along some axis interesting to the business. This might be users (referred to pervasively, and unfortunately, in the industry as seats) or servers or something with a closer connection to the problem domain.
Cirtru helps match people with new roommates. The customer is the person seeking a roommate, not the person seeking a new apartment.
Their existing pricing:
Our commentary:
You’re asking the user to make a big decision here: Concierge or Premium Listing. Those achieve different goals for different people.
The core insight here is great, which is that some people want to buy a tool and some people have more money and just want to buy an outcome. The desired outcome is “Find me a paying tenant who probably won’t skip out on rent or murder me in my sleep.”
I’d probably position that choice explicitly:
Find me a roommate / I want to do my own legwork finding a roommate
I’d default people into the first option and either deemphasize the details of the second (via greying them out or something) or hide them until someone interacted with the downsell option.