According to tech expert Josh Melick too many SaaS providers are getting it wrong when it comes to their pricing structures. In fact Josh has broken down quiet clearly in an article which he has uploaded to his personal blog, exactly where the problem lies.
Josh speaks confidently about the fact that all inclusive sales is crippling to a business and something which is offering them no chance of actually tuning their product into a big seller. Another key area which Josh focuses on is the way that pricing structures are set up, being one or two dimensional, and missing out on the key ingredient, the third. Here is why Josh suggests that SaaS companies are missing a beat, and what they can do to better upsell their products.
The Third Dimension
Whilst Josh recognizes that these businesses understand the need for the first and second dimension to separate their pricing packages, which are number of users and usage offered, he third and most important is missing. Josh says that not enough companies are favoriting in time into this pricing equation. The benefit of having time as a factor is that prices can be increased with ease after a year, which the other two options simply don’t give. Josh’s three dimension plan is not the only way to make more money of course, there are other ways to upsell too.
Increased Time Frame
One aspect which SaaS companies may wish to offer to their clients is an increased time frame if they upgrade to the top package. If for examples someone is looking to invest in the silver package then they can instead take the gold for 14 months instead of 12, or something similar. This will increase interest and upsell to many more people.
Lower Rise on Upgraded Plans
As Josh rightly points out, offering a time limit enables you to increase the following year’s price for the client. This also provides a great opportunity to upsell the product for the following year, and try to get more people to upgrade their package. For example Josh mentions about upgrading the price by 7% year on year, which is a smart amount to increase by. If however you offer someone just a 5% increase on the next package up, you can encourage more people to upgrade, and still save them money.
Bundle in Software
To those within the SaaS industry who create more than one software package or suite, bundling in additional software is a great way to get people to spend more money on your products. There are so many software suites which go hand in hand and this may even help you to take a client away from a competitor. If they are already impressed with the products which you offer, they will be more than happy to give another software suite a try.
These are just some ideas which you can use to upsell your software products and upgrade your pricing structure.