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SaaS Pricing

Public • 488 • Free

18 contributions to SaaS Pricing
Target Discounts
Hey folks. Context: I'm working on introducing better pricing guidance for our B2B SaaS product that's sold using a sales led motion. Today we just have list prices and we want to introduce target prices. We've never published our list prices nor put them on customers' agreements so we have some flexibility with changing these to fit our needs. We do want to move to showing customers the list price, discount, and net pricing on agreements. This will help us more effectively expire discounts that are intended to be short term (e.g. 1st year). Question: When you're thinking how to set list vs. target price (target discounts), what have you seen work well? Hypothesis: My initial thought is to set the target price 10% - 20% below the list price. Here's my rationale: 1. If sales starts the negotiation at list, it gives them some room to negotiate down to target 2. If we want to setup most of those discounts as 1st year only discounts, then the price jump for customers isn't painfully large 3. Our discount escalation policy is setup so AEs can discount 10%, Sales Directors (20%), RVPs (30%), etc. Targeting a discount of 10% to 20% should keep most deals from reaching the more senior approval levels. Would love to hear some thoughts on the topic if anyone has any. Thanks in advance! Steve
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New comment 2d ago
0 likes • 2d
Hi Steven, let me share some assorted thoughts. - Limiting discounts to year 1 (or at least make them time-limited) is the right way! - While I can relate to your thinking of providing your commercial org with "wiggle room", it also risks creating an expectation with clients to get the same discounts when they purchase another product of yours. I observed many times that this led to sales teams questioning the value of the product and resulted in them easily giving away margin. - To counter the above, #1 incentives for the commercial org need to be structured in a way that non-discounted deals produce a significantly higher quota retirement/bonus. #2 continues education/training/coaching of the sales teams helped getting sales reps out of the rabbit hole of prematurely discussing discounts with a prospect. - Obviously, the discount level need be closely linked to the margin management of the firm. I have met many delivery teams having to discuss their operational margins because services had been sold below the design margin. Considering this early on avoids many operational escalations. Hope that gives some perspectives. kr, Carsten
Pricing in stages
Hi everyone I am launching an online community for project managers later this year. I am in doubt of pricing this. I think the “right price” is around 200USD pr year. But much of the value comes from other members and premade content (templates, guides, courses) so I am not sure I can charge that in the beginning. So I will that by charging 50USD, then 100 USD and then finally 200USD. My question is, should I state that from the beginning, that at a fixed date in the future it will go from 50-100 and another future date it will go from 100-200, or should I simply start with 50, and then later on raise the price? I am unsure if it would scare of people in the beginning? I will grandfather the 50USD even when it’s 200USD. I look forward to hear your advise.
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New comment 9d ago
1 like • 9d
Two thoughts: 1. I suggest you validate the value of your pre-made content against other sources. Especially (online) courses tend to be more expensive than 200 USD. Doing the math of "average price per course in the market * expected # of courses per subscriber & year" will give you an indication of the value you deliver and hence a realistic pricing. 2. If you think about a discount for the beginning, you may give the discount for the 50 first subscribers or the initial 3 months of existence. I strongly suggest that you contract subscribers on your final list price and make the discount explicit. By that you have the renewal on your list price and can better avoid the grandfathering. good luck with launching your community!
How to aproach larger companies that will only work with you if you sell them the platform
Thanks for accepting me in your community. I have spent two months reading The Pricing Roadmap book and watching Ulrik´s videos to improve my company aproach on pricing. We have a lot to work and learn and is super exciting to carry on this project. I have, however a much pressing question. We provide a monitoring and control saas service for mining, water utilities and energy companies and we also install and mantain our monitoring instruments. We deal with much bigger than us, cupper mining companies and pulp companies, among others. They frequently pick their suppliers on biddings and lately some of the biddings require we sell the platform to them because they want complete control on their data. Related to this, some big energy intensive companys have told us, no, we cannot work with you because all our data must remain within the house for security resons. So, I was thinking.. A "job to be done" would be ...I want others to develop my platform but I want to run it withouth the data going out. If we develop, and deliver an entire platform for each of this requests. How are we suposse to charge? and more important.. should we do it? Could we answer in other way with out losing this opportunities? If you could guide me in this, I would really aprecciate it. Kind Regards and excuse grammar english mistakes.
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New comment 6d ago
3 likes • 13d
Hi Nicole, welcome to the community! I think your problem is not a pricing but a product management problem. If you sell your product, you are no longer in a SaaS business model but in the SW business model. This will impact your operating model significantly and will create significant cost. Examples for such cost drivers are different support and maintenance flows, upgrades need to be coordinated and agreed,, ... Two brief reflections - Based on experience, the price difference between a SaaS offer and the same tech stack being deployed to a client ranges between a factor of 3 and 5. - My view: Even if you use the same tech stack, make sure to put both operating models into two separate units. Will also help to manage cognitive load for your delivery (professional services, support, ops) staff. All in all, it is doable to accommodate such deviating requirements, but be mindful of the challenges it comes with!
Enterprise Mono-platform pricing as a startup
Hi everyone, since I feel like tiered pricing usually gets most of the attention I'm seeking clarity for mono-platform pricing on a few points: 1. Our offering includes both a service component (content maintenance and delivery) and a SaaS platform. In a mono-platform model, how should we structure these elements? Should the service be an add-on, or part of the core platform? Currently, we have: - A core platform flat fee - One-time setup payments per new device - Usage-based pricing above 10,000 monthly knowledge calls 2. How would one go about creating a pricing ladder? Or does that not apply for this pricing model. It seems to me like it’s most applicable to tiers. For context: our solution targets enterprises and aims to prevent customer support requests for physical devices and technical issues. Any insights or examples of successful mono-platform pricing strategies in the enterprise space would be greatly appreciated. Thank you!
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New comment 20d ago
1 like • 22d
Hi Maxim, as I understand, you are essentially offering a self-service helpdesk platform that your clients can use provide their user with information better than just manuals, e.g. videos of how to use, photos, etc. with the aim of reducing the # of support request getting through to their 2nd line. Value drivers for your clients: - # of products on the platform - # of knowledge calls (as an approximation for reduction in 2nd level calls at your client) Some considerations on services: The service element (onboarding and content maintenance) is a crucial part of your value prop => if the content is outdated, more end users will (have to) call the 2nd line of your client => reducing the value your platform delivers. Hence, needs to be mandatory. Thinking of monetizing service components (assuming your teams have the appropriate capabilities): - provide QA for the content your clients deliver - provide knowledge mgmt consultancy => helping your client in creating better content With this in mind I could see the following structure (note: take the numbers as examples - I am not close enough to your specific business!) Recurring per month/year: - Base Fee (including Access to Platform, onboarding and regular maintenance of content for 50 products, 10k knowledge calls) => 3000 - Additional 50 Products => 1000 - Additional 10000 monthly Knowledge calls => 400 If you can measure the change in # of 2nd line calls at your clients before and after they've onboarded to your solution, you might want to trade the additional products/knowledge calls for a percentage of the saved costs.
Teardown of Aumico.io
Hi guys Find below a 38min video teardown of Aumico.io - a financial statement / consolidation solution for accountants. I've done 3 such projects in the past, including quite a bit of competitor research in this market. My advice to Aumico (the short version): 1) Consider selling to banks - they have a far more valuable use case for your solution. 2) Consider a Freemium over your current trial. 3) Don't split out new functionality in additional modules - keep it in and raise prices. 4) Add services to the mix - both one-off onboarding and ongoing year-end support. You can see the full email from Chris /Aumico below - and thank you to that team for playing along! Let me know what you think in the comments - did I get it right? Something you would have done differently? Do you have any advice for Chris on how to grow this? /Ulrik ----------------------- A) You will find our pricing here: https://aumico.io/en/accountant/ For example, you are an accountant with 35 clients. You will buy a license for each client. ( 35 x 65 CHF = CHF 2'275) licenses will be renewed automatically. B) 1) We simplify year-end closing for accountants. Our main target group is accounting companies in the DACH region. We currently have one Modiul but soon launch the next one. 1. Modul 1:  financial statements engine (existing) The pricing above relates to this service 2. Modul 2: financial closing: documentation of financial statements (will be released on October 15th, 2024 (The pricing is not determined yet. Idea is to duplicate the existing 3. How we do sales: Outbound mailings, push into the trial period and convert (own sales org.) 2) Metrics 1.  ARR= CHF 282'000 2. 140 customers 3. Churn rate: 5% 4. Annual growth rate: not sure how to calculate correctly. 5. 2021: CHF 14'000, 2022: CHF 122'000, 2023: 226'000) 3) Goals 1. Increase revenue 2. Increase average deal value 3. make pricing simpler for the client and us
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New comment 23d ago
Teardown of Aumico.io
0 likes • Oct 9
I like the teardown - especially the "density challenge" that you spotted. My view on the scope of the product in short: - import data from bookkeeping / core accounting system - create cash flow report and balance sheet - create nice layout for publication I do not see the consolidation functionality you refer to - but Chris will know better! I would strongly suggest focusing on paid service components. One-off: Establishing additional paid a premium onboarding service (fixed price) because 1. This is where the clients have the biggest manual effort (=> website says that 2nd report is 20% of the effort.) 2. you know your tools inside out and have a good understanding of the data sources as well Additional ideas for recurring services: - a premium support (CSM) could be a paid add-on. - "data source change service" for handling any upstream config changes in your mapping as part of a subscription. Takes away the hassle for clients and provides you predictable revenue. Re establishing the 2nd add-on: - The target market is rather small, i.e. all clients having already bought the base package. - question is whether the potential additional revenue justifies the additional cost (sales/admin) => I would lean towards including it in the base and communicate it as increased value of your product. Would like to hear some feedback!
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Carsten Kunkel
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40points to level up
@carsten-kunkel-2866
Being through an evolution from presales, service delivery and product mgmt in SW and SaaS products for financial services over the past 2 decades.

Active 11h ago
Joined Aug 21, 2024
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