Are you leaving money on the table in your Software / SaaS startup? In this video, I share the 4 most common ways to add additional pricing axis to your product so you can take your startup to the next level.
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How do you increase your product lock-in?
How do you increase your prices without upsetting your customers?
The other day I was reading a great blog post by Brian Halligan, CEO and Co-Founder of Hubspot on going from Startup to Scale-Up.
One area that I loved was his thoughts on the “Monetization Decision”
What they realized is that early on they were lacking multiple pricing axis.
At the time they only had one when companies like Salesforce had 4.
That’s something we learned when building out Flowtown, our SaaS product that allowed companies to get social and demographic data appended to their customer email list.
If you look at the top 250 software as a service businesses, most have an average of 2-3 different ways to extract value from their software.
So in today's video I want to share the 4 most common ways to add additional pricing axis to your product.
Here they are:
1) Plans: This is a no brainer and most SaaS companies offer different tiers of plans or packages for their products.
2) Number of Seats: If your product allows for it, charge for additional accounts or access to more admin features for teams.
3) Add-Ons: Many times this can be a 3rd party integration, or some feature that has a direct cost to you for providing but that you can upsell to your customers.
4) Other Services: This would be if you have any other products or solutions within your organizations. At Salesforce.com, these are their other Cloud product suites like Support & Marketing.
The key is to provide other elements of your solution as upsells or revenue maximizers so that your salespeople have something to offer to increase their Average Contract Value (ACV).
Using these strategies will allow you to improve your profitability and re-invest in marketing and sales activities to take your startup to the next level.
Upgrade your pricing axis. Uplevel your profits.
Don't forget to share this entrepreneurial advice with your friends, so they can learn too: https://youtu.be/pXPqSrNImWQ
ABOUT DAN MARTELL
“You can only keep what you give away.” That’s the mantra that’s shaped Dan Martell from a struggling 20-something business owner in the Canadian Maritimes (which is waaay out east) to a successful startup founder who’s raised more than $3 million in venture funding and exited not one... not two... but three tech businesses: Clarity.fm, Spheric and Flowtown.
You can only keep what you give away. That philosophy has led Dan to invest in 33+ early stage startups such as Udemy, Intercom, Unbounce and Foodspotting. It’s also helped him shape the future of Hootsuite as an advisor to the social media tour de force.
An activator, a tech geek, an adrenaline junkie and, yes, a romantic (ask his wife Renee), Dan has recently turned his attention to teaching startups a fundamental, little-discussed lesson that directly impacts their growth: how to scale. You’ll find not only incredible insights in every moment of every talk Dan gives - but also highly actionable takeaways that will propel your business forward. Because Dan gives freely of all that he knows. After all, you can only keep what you give away.
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Hi Dan! I want to increase prices of my Saas product, but want to give somehow an advantage to my previous customers to renew with an old pricing model. What do you think, is that a good idea or not, or should I keep the same pricing model for all new and old customers? Of course that I want to increase sales, but don't want to dissapoint my current customers. Thanks for the great stuff you provide!
It makes sense, it's a good moral decision that I was thinking about, but I wasn't sure if that's a best practice in business. This confirmed that my gut has good answers :) Thanks a lot, very helpful answer!
Goran Radosevic grand father your existing customer to their current pricing ... and increase for new.
If you must increase prices for all, give them another year (existing) at current and warn them prices are going up.
You need to give your salespeople stuff to sell. If you only have 3 plans for your SaaS product without anything else to upsell, or cross sell, then you’re leaving money on the table. Here are the top 4 strategies the largest SaaS companies use to increase their average value of a new sale.
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