I'm in the process of figuring out a pricing model for a SaaS service right now and I watched this video in full. There's lots of interesting stuff in this, but in the end I am left no better off. For someone who is actually building a pricing structure now, it has nearly no actual value.
I still do not know how to price my service, do I price per seat, per year based on a random number, per $FROBIT used,
or a one time sale?
I know I should price based on value, and my price should be less than the perceived value to my user. But I learnt that in my 10th grade business class.
However, that said it was a very well done presentation, and once someone has a working pricing structure then these tools will be useful improve business outcomes.
Hum a few bars about what your SaaS does for whom and I will happily napkin out a pricing structure for you. If you have no clue, for B2B SaaS sold on a low-touch model with the assumption you're not shooting for the VC->IPO track, just copy paste $49/$99/$249 into the bog-standard Three Column SaaS Pricing Page and offer 1 month free with an annual pre-pay.
Hi Patrick, wasn't expecting you to respond. But here it goes.
I have a service which identifies which accounts will pay for accounts receivable. IE: collections agencies. Numbers
show it can move the needle double to triple digits depending on the account mix.
Right now, I'm planning on a per seat monthly subscription.
Customers know how much they'll be charged each month, and I think it lets me focus on the value rather than community unit costs.
EDIT: Just a note, unfortunately, this is a very high touch environment. The upshot being that once a customer chooses you, they never leave. Even if they're being outright abused. (I have stories!)
I'm not ordinarily a fan of per-seat pricing but I think it makes sense in this environment, as software adoption will be top-down, the sales process is high-touch, they can build it into per-employee overhead, etc. I'd caution you that, as you likely know, employee turnover in this industry is insane and as a result of that and standard staffing practices the seats in use are going to fluctuate constantly. This isn't totally dissimilar to CS, so you might look at what ZenDesk and the ilk do with regards to floating seats, etc.
If you're really getting X0% to Y00% in per-collector productivity then I say start by asking for for $100 per seat per month, if you're wedded to per-seat pricing. You can price anchor it around "less than a single collector-day" and that leaves plenty on the table for your clients. I'd then start walking the price up (if it is worth $100 a collector it is probably worth $150/$200/$250) until you start losing lots of sales on the pricing question.
If you've got very heterogenous clients number of people on the phones might not capture value as well. You might consider doing N tiers (maybe or maybe not publicly disclosed). I'd be thinking something along the lines of $500 for the mom&pop shops, $2.5k for "real businesses" doing debt collection, and $10k++ custom pricing for large/enterprise accounts. You could have multiple segmentation levers between plans, such as e.g. size of the average receivable, total volume of receivables, type of collection, what data sources you pull in to do the calculations ("Pay more get more!"), etc.
The great thing about high-touch sales is that if you hate how your pricing strategy interacts with any one client you just change it for the next one.
If you'd like to discuss this in more detail non-publicly, email me. I have a weird personal interest in this field and am happy to trade informal consulting on SaaS pricing for war stories.
I still do not know how to price my service, do I price per seat, per year based on a random number, per $FROBIT used, or a one time sale?
I know I should price based on value, and my price should be less than the perceived value to my user. But I learnt that in my 10th grade business class.
However, that said it was a very well done presentation, and once someone has a working pricing structure then these tools will be useful improve business outcomes.