The secret to a successful software-as-a-service company is in their pricing page. But what if you’re not maximizing your potential in this area? What will happen to all those leads that come into contact with your okay SaaS pricing page, but never convert into trials or paid subscribers? You could be missing out on a lot of business because these people don't see how great it is for what they're paying! Pricing is one of the most important pages on your website, which is often overlooked or given too little attention.
The goal of a pricing page is to convert visitors into SaaS subscribers, but too often, companies don't bother to test different strategies to maximize their conversions.
In this blog post, we'll break down some of the best strategies for keeping your pricing page simple and effective.
Table of Contents:
- SaaS Pricing Strategies
- Using Psychology with Pricing Page Design
- Focus on "User" Personas
- Best Practices with Call-to-Action Buttons
- Test Interactive Elements on your Pricing Page
- Test Different Elements on your Pricing Page
- Auditing Your Pricing Page Traffic
The SaaS Pricing Strategies
If you're a startup SaaS consider the pricing strategy should come first. Even for established software companies there might come a time of restructuring your pricing. Here are some common types of SaaS pricing:
- Cost-plus pricing
- Value-based pricing
- Competitor based pricing
- Penetration pricing
- Captive pricing
Cost-based or cost-plus pricing is a popular strategy for businesses that are just getting started, as it is one of the most straightforward methods for determining and setting prices. At its core, this strategy works on the simple principle that in order to earn a profit, you must sell your product for more than you spend on it. Because it does not involve extensive research into the customer's willingness to pay or broader market trends, this approach typically requires minimal investment in marketing and growth strategies.
However, while cost-based pricing may be an effective short-term solution, it can quickly become inefficient and even risky over time. For one thing, this method does not take into account the needs and preferences of your end customers, which could impact both sales and long-term growth. Additionally, relying solely on cost-based pricing may leave little room for adapting to changing market conditions or trends. In order to succeed in today's competitive SaaS landscape, businesses must invest in a robust pricing strategy that incorporates both short-term growth tactics and long-term strategic planning.
Understanding the value of your customers and their needs is a key component of any successful value-based pricing strategy. By closely examining the needs and perceptions of your target market, you can develop products or services that truly meet their needs, even if your competitors are charging more.
At the heart of success with value-based pricing lies careful integration and alignment of your SaaS product with other third-party systems and tools. By connecting with other tools, platforms, and services that are critical to your customers' workflows, you can help to save them time and effort while also helping them to increase their productivity.
In addition to good integration, a thriving SaaS product must also have a set of features that truly add value for customers. Whether through increased functionality, scalability, or flexibility, these features need to be well-designed and finely tuned in order to enhance your customers' experience and help them achieve their goals more easily. With these key components in place, you can successfully leverage value-based pricing as a tool for growth marketing in today's competitive SaaS landscape.
Competitor-based pricing strategy is to simply mirror the pricing of your competitors. By looking at the prices listed on your competitors' pricing models you can determine if you should be higher, lower or the same. You can ensure that your product doesn't become too expensive or too cheap compared to the competition, thereby positioning yourself within the average range of SaaS products in your industry.
While this strategy may be simple and straightforward, it also has its drawbacks. For one thing, this strategy relies on public information about your competitors' prices, but you could be leaving factors like market demand or costs of production when determining your own prices. As a result, you may end up missing out on revenue opportunities by choosing a price that is too high or too low for the market conditions around you. Additionally, this strategy means that you have limited control over setting your SaaS product's price, leaving little room for experimentation or flexibility with pricing as needed.
A penetration pricing strategy is an effective way for new SaaS companies to establish themselves in a competitive market. By offering low prices as compared to competitors, this strategy can help you gain a foothold and gain brand loyalty with potential customers. However, while this strategy can be a powerful tool for growth marketing, it should be used with caution, as it can result in losses if not implemented properly. Ultimately, it is important to have a long-term vision for your SaaS product, and to use strategies such as upselling and cross-selling to make up for any lost revenue from going with a penetration pricing strategy at the initial stages of your company's growth.
As mentioned with penetration pricing and upselling, you can begin to transition to captive product pricing in which it can be a highly effective pricing strategy for SaaS businesses. This approach involves offering customers a core product at a lower price point, typically to gain market share and build brand recognition. At the same time, customers are also charged more for any additional accessories or features that they may want or need. By strategically pairing these products together and encouraging customers to purchase both the core product and the accompanying accessories, SaaS businesses can achieve significant growth in both their top and bottom line revenue. Additionally, by providing customers with a familiar set of core products and accessories that they are accustomed to over time, SaaS businesses can foster lasting customer loyalty. Overall, captive product pricing represents a powerful strategy for SaaS companies looking to grow and thrive in today's competitive marketplace.
Along with the pricing strategies above the two common methods to consider with your subscriptions are per-user or per-seat pricing:
- Per-user pricing means that each user who signs up for your service pays a set monthly or yearly fee. This type of pricing is common for SaaS products that are used by individuals, such as CRMs or project management tools.
- Per-seat pricing, on the other hand, means that each seat or license sold pays a set monthly or yearly fee. This type of pricing is more common for products that are used by teams or organizations, such as video conferencing software or HR tools.
Psychology in a Pricing Page
Another important consideration is psychology. How can you use psychology to influence potential customers' decision-making? Here are a few popular ways you can structure your pricing and page that would effect user behavior.
Charm Pricing or the Rule of 9 Effect
When it comes to convincing consumers to make a purchase, charm pricing can be a very effective strategy. This is because the left-digit effect, or the "rule of 9", causes us to perceive smaller numbers ending in 9 as less expensive than larger numbers that are just one cent or dollar higher. This plays into our tendency to pay less attention to real prices and focus instead on digits at the beginning and end of a number, which can have a strong influence on our buying decisions. For example, the perception for value of $20.00 compared to $19.99. The $19.99 appears to be cheaper than $20.00, even though the subscriber only saves $0.01. Optimize your SaaS product's pricing page by considering implementing some kind of charm pricing scheme to take advantage of this powerful psychological phenomenon.
This approach focuses on leveraging the perception of cost by suggesting a higher price first. By establishing an initial anchor point, you can influence your customers' perception of value when comparing other prices to that anchor. Implement price anchoring on SaaS pricing page by placing the focus on your most expensive plan on the left side of the screen and next have lower tiers after for easy comparison. For instance show your Enterprise plan that starts at $2000 on the left-hand side. When a visitor moves their eye to the right they can compare lower plans at $799 & $499 to get started with which seem far more reasonable than the Enterprise pricing. Additionally, this method makes it easier to upsell or cross-sell other products or services by pitching your most expensive add-on or upgrade as the first option available. Price anchoring can be an effective strategy for SaaS businesses looking to emphasize value between plans.
Bundling for SaaS pricing is a popular and effective strategy for many software companies. Because SaaS software often includes a range of different functions that can be used independently as well as together to create synergies, it is perfectly suited for bundle pricing. This technique has been shown to reduce buyer anxiety and choice overload, and also helps to emphasize the value proposition of the individual products within the suite.
To maximize the benefits of bundling for SaaS pricing, it is important to have a thorough understanding of your products and how they relate to customer interactions. By analyzing data related to these interactions, we can identify which features are likely to drive purchasing decisions and create attractive bundles that will meet our customers' needs. With a comprehensive understanding of our products and their potential buyers, we can successfully deploy a bundle pricing strategy that will help us to drive sales and ensure long-term success.
Frame Your Price In a Different Manner
When selling software, it can often be challenging to find the right pricing strategy that will help your customers see the true value of your product. One powerful technique that is often underutilized is reframing the price in a way that better resonates with consumers. For example, instead of presenting your SaaS software at $1,200 per year on an annual subscription, try reframing the price as $100 per month or even better, $25 per week. By framing the price in this way, you are making it easier for consumers to rationalize and process the cost, which can lead to greater sales and happier customers. Additionally, you can break down annual prices into smaller installments or focus on their daily equivalence to further enhance the impact of your SaaS pricing strategy. With these techniques in mind, you can successfully frame your SaaS pricing page in a way that more effectively appeals to consumers' psychological perceptions of value and affordability.
Tailor your Pricing Page with User Personas
Next, think about your user personas. Who are your target customers? What do they need your product for? What can they afford to pay? Answering these questions will help you determine what kind of strategy to use on your pricing page.
Once you've decided on your subscription model and priced your tiers accordingly, it's time to start thinking about your target audience—more specifically, your user personas. If you're not familiar with user personas, they are fictional characters that represent your ideal customer base. Just like buyer or customer personas a user persona goes in depth with not just someone buying into your product, but also how they will continue to use it on a monthly and yearly level. When crafting your pricing page, it's important to keep your user personas top of mind so that you can tailor your message (and price points) accordingly.
For example, let's say you're selling a project management tool aimed at small businesses. In this case, your target audience would be small business owners or managers who need help staying organized and keeping track of their team's progress. With this target audience in mind, you would want to craft a pricing page that highlights the value of your product for small businesses—such as ease of use, affordability, etc.—and offers multiple tiers that fit within their budget constraints.
Best Practices for CTAs (Calls-to-Action)
Keep it Simple
When it comes to designing effective call to action buttons for your pricing page, simplicity is key. Your visitors should be able to easily and clearly understand what you want them to do, without any confusion or wasted time. Whether your button text is short and sweet or more detailed, it should always be relevant to the offer on your pricing page. Additionally, a well-designed landing page will flow logically and intuitively, priming the mind to focus on the action of clicking the CTA. With these considerations in mind, your pricing page will be better equipped to help guide users towards making that all-important click!
Use Actionable Language
it is important to keep your call to action simple and actionable. This means using language that is easy for visitors to understand and that clearly communicates what they should do next. The most effective way to achieve this is to make your button text as specific and actionable as possible. For example, a generic call to action like "Buy" or "Try" may not be as clear as a message like "Get Started Now" or "Try it for Free"
Additionally, it can be helpful to include other cues on the pricing page that help guide visitors' actions and ensure a smooth transition through the interface. These might include simple messages or prompts scattered throughout the page that provide additional context or explain any potential ambiguity in your call to action.
Use an Attention-Grabbing Color
When it comes to crafting effective and persuasive calls to action, color is a crucial factor to consider. Studies have shown that color plays a powerful role in determining the success of your button, influencing everything from how many clicks you receive to how quickly those clicks occur. In general, black is often perceived as sophisticated and sleek, while pink is associated with femininity and sweetness. Green also tends to be associated with vibrancy, directness, and movement – characteristics that can be particularly appealing for calls to action.
Since color is so impactful on our subconscious minds, it can be an effective tool for drawing attention to your pricing page or other key areas of your website. By focusing on a monochromatic color scheme for the rest of your site and using contrasting colors for call to actions like keywords or buttons, you can make these important elements really stand out and convince visitors to take action right away.
A/B Test Your CTA Button
When it comes to SaaS pricing pages, one of the most important elements is your CTA button. After all, this is what converts visitors into customers, and it's essential to test different variables in order to find the most effective version. Some of the things you might want to consider testing are color, text, placement, shape, size, and effects.
As mentioned above with color consider a/b testing your CTA buttons. Different colors can have different effects on viewers, so testing out different hues, shades, and tints can help you understand which provides the greatest impact. Think about the text and placement of your CTA button such as is it better to have your CTA clearly above the fold of the pricing page or is click activity higher if placed mid-way. The shape and size of a CTA button can produce different results that may surprise a lot. Just make sure if you use these testing methods to test one variable at a time. Don't test colors and placement of a CTA together because how will you know for sure which actually worked? Each variation can provide unique benefits when it comes to engaging your visitors and encouraging them to take action on your SaaS platform.
Another important factor to keep in mind when testing your SaaS pricing page CTAs is how long you should allow each variation to run before making any final decisions or deciding which one performs best overall. Depending on traffic levels at your SaaS company, this could mean anywhere from a few days to several months. Then you can narrow down the options based on factors like click rates and signups; if button B seems to be getting more initial clicks but produces fewer signups once trial accounts have started, then that may be an indication that something about its design isn't quite right. With these considerations in mind, you can start crafting SaaS pricing pages that attract more customers and drive real results.
Test Interactive Elements
When it comes to creating effective SaaS pricing pages, it can be important to experiment with different approaches and interactive elements. One simple way to test is to implement sliders or toggles that allow users to change the pricing tiers depending on their specific needs and the number of team members they have. Another option could be to use a slider or knob that shows the potential savings as users increase their monthly plan options, providing an easy visual reference for users before they commit.
Additionally, adding interactive elements such as live chat could also help encourage more conversions by giving site visitors a chance to get additional support before signing up. Ultimately, trying out various interactions on your pricing page can help you determine what approach will drive the most conversions, so don't be afraid to experiment and see what works best for your specific business needs.
Test Different Elements on Your Pricing Page
Carefully test different elements on the page, such as social proof, testimonials, or awards. One commonly tested SaaS pricing page element is social proof and whether or not having social proof on the page can help increase click rates. There is also growing interest in whether adding testimonials to SaaS pricing pages can improve conversion rates; some studies have even shown that where these testimonials are placed and how they look can impact the effectiveness of this approach. Ultimately, SaaS pricing page design and testing are evolving areas of marketing strategy and SaaS businesses need to continually monitor and iterate their approach to these crucial pages in order to maximize their effectiveness.
Audit Your Pricing Page Traffic
It is important to pay close attention to your pricing page factors such as page paths, conversions, time on page and load times in order to get the most out of this critical traffic source. By analyzing these key metrics through analytics tools like Google's Page Analytics or other similar platforms, you can gain valuable insight into what is working and what isn't when it comes to SaaS page design. Tracking metrics like these can help you identify any potential issues with your pricing page before they become major problems.
Pair analytic tools with using heat maps can be an invaluable tool for improving your design strategies. By analyzing how users interact with your page, you can gain valuable insight into what works and what doesn't, allowing you to make more informed decisions about your layout and content. Some of the benefits of using heat maps include:
- Discovering which call-to-action (CTA) buttons are getting the most clicks, and which ones are neglected
- Seeing which elements on the page get the most direct attention;
- Identifying where users tend to focus their attention on the page, and how far they scroll down;
- Optimizing for both desktop and mobile devices, as well as understanding how different device types impact user behavior.
Ultimately, using a heat map along with A/B testing is a powerful combination that can help you vastly improve your SaaS pricing page design.
Have a Pricing Page Strategy and Test
Pricing pages are essential for any company selling products or services online—especially if those products are subscription-based (like most SaaS products). In this blog post, we've provided an overview of some key strategies that will help you create an effective and persuasive pricing page for your business. By following these tips—such as keeping things simple, focusing on value, and considering psychology—you'll be well on your way to increasing conversions and getting more subscribers!