Nothing can hinder the growth of your SaaS product more than poor pricing plans. And no, this is not hyperbole. As a B2B SaaS-based company, you have to make sure that you appeal to a broader group of potential customers.
However, it is no mystery that deciding a pricing model for your SaaS product can be very arduous. Despite the fact that there is no definitive rule, there are so many things that you have to take into consideration.
So, what should you be considering while making a scalable sales model for your SaaS product without mucking it up?
1. Don’t go overboard with the free trial
An ideal free trial package is for 15 or 30 days. However, some SaaS-based companies have a penchant of going overboard with their free trial subscriptions. I have witnessed some free trial subscriptions that go as far as 90 days, which definitely doesn’t help. If anything, it might end up harming your sales prospects even more.
Do you think that the customer would have an epiphany in the period of 2 months? Or would they discover something different in 2 months, something they failed to discover in 2 weeks or even 4 weeks?
The answer to the aforementioned questions is an unfaltering NO! In fact, the longer your prospect delays the decision, the more difficult it will become for you to close the deal.
So how long should your free trial be?
Short! In most cases, make it as short as 15 days. A two-week trial is perfect, not only for your sales department but also for your potential customers. The short window of free trial will help your prospects fasten their decision-making process and will hopefully tantalise them into buying your product.
2. Don’t sell yourself too short
SaaS product owners have built a preconceived notion that the lesser their prices will be, easier it will be to sell their product. However, nothing can be further from the truth.
What’s more important is to have confidence in your ability to deliver a stellar product rather than slashing the prices beyond comprehension. Make quality your main focus and adjust your prices in accordance with your product.
Otherwise, extremely low prices may end up hurting you. For one, people looking for a credible SaaS product will be automatically sceptical of your product’s credibility. Secondly, if you sell yourself too short, you might find yourself facing a horde of low-budget prospects which will leave you grappling with budget problems.
Please note that you should be able to back your prices with a qualitative product. Apart from this, hiring a good sales team can also do wonders. The onus to sell a product on non-discount rates by educating the prospects lies on an active sales team.
3. Don’t list out your most expensive package
Shouldn’t it be obvious? For you to hide your most expensive package?
However, according to a survey, only 38% of SaaS-based companies hide their most expensive package and list it as “Contact Us”.
The more expensive your package is, the more problematic it will be for you to justify the cost without explaining it in detail. So the best way to tackle this is by opting for the “contact us” option when it comes to your best package. Otherwise, the chances are that you will end up blowing many big deals.
4. Highlight your best package
It’s great that you are giving your prospects an option to choose from multiple packages. However, walk an extra mile and help your prospects make a perfect decision.
How will you do that? By highlighting your best or most popular package.
It makes sense to streamline your potential customer in the right direction. From a user perspective, it makes their task a lot easier and automatically ends up generating more revenue for your company.
5. Incentivize annual subscription
When it comes to SaaS-based products, it’s not very easy to make your customers pay up for a very long period of time. Most people prefer a trial package to test the waters first before even considering paying.
So, how will you compel them into subscribing for at least a year (or two)?
The best way to go about it is by rewarding the people who are ready to pay up-front for a longer period. For example, you can offer some discount or a free service that is relevant to your prospects.
6. Extra training
Most SaaS-based products require special training and support. And this is where most startups go wrong. In an attempt to build a massive customer base, they start to give out this extra training for free.
Don’t make this mistake, be smart. While offering great customer service is good for your business but offering extra training for free is not a smart move. Being over-generous might just backfire on you!
Also, clients who are genuinely interested in your product would have no qualms in paying an extra sum to receive an extra training. For example, the seasoned marketing and sales platforms like HubSpot offers training programs to their customers.
7. Discount trap? You are better off without it
DON’T fall into the trap of offering huge discounts – most often, it is the sign of lack of confidence in your product. So, avoid this temptation at any cost.
Instead, you can choose a much simpler route and offer incentives to your customers. Mind you, don’t mistake incentives for just another form of discount. For example, offer incentives such as one free month for a full one-year up-front payment, and so on.
In conclusion, these seven tips can help any SaaS product based company to build a scalable sales model without much hassle. The point is – do not undersell your product by offering irrelevant discounts, an overextended free trial and too less pricing packages. Keep it simple and make sure that your product is on par with your prices. Don’t forget that the right pricing model is imperative for the success and growth of your SaaS And Software Startup.