You might think the stylized math is "Out of an initial notional pool of 50 lower-value accounts and 50 higher-value accounts you shed 40 of the lower and none of the higher, resulting in ~50% higher revenue." That's not usually what happens. What happens is closer to:
-
-
Show this thread
-
You've got 10 pathological customers, 10 low-value customers, and 80 high-value customers in a notional pool of 100 accounts. You lose 8 of the pathological customers, 2 of the low-value customers, and none of the high-value customers. Your support load decreases *by half.*
Show this thread -
(Note that it takes a while for this sort of thing to catch up because, as a savvy SaaS entrepreneur, you're not raising the price for existing users but rather raising it on new cohorts.)
Show this thread -
This also tends to improve the product over time, too, since all of your inbox is from customers who understand that your product is worth $50+ a month, can trivially budget that for their business, and have the kinds of sophistication-increasing feedback you'd expect.
Show this thread -
So you're pulled in the direction of "Can you integrate this with [ERP commonly deployed in your space]?" or "I'm an enterprise, can I get this with better auditing tools for 10X as much money?" and not "Ugh this is so complicated; can you make it more like Facebook please."
Show this thread -
Complexity isn't a mark of good software but a lot of good B2B software is complex, principally because you're generally helping professionals work and the work professionals do is intrinsically complex. There are better and worse ways to expose/manage that complexity.
Show this thread
End of conversation
New conversation -
-
-
Is it a good idea to start with a 20$ plan then after we can raise min price to 50$?
-
I'd start with $50 and give out discounts to $20 for early adopters. Well, actually, I probably wouldn't give out those discounts. But one could do that.
- 3 more replies
New conversation -
-
-
I 100% agree - now. I started my B2B SaaS at $29/month but now charge $49/month. Better (but not fewer) customers, who stay longer, and are more pleasant on average to deal with. If I did things over, I’d start from day 1 at $49/month - or higher.
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
I'd really love to see how this idea has been working out the last couple of months (sadly not present on the graph)
-
You can see on the graph actually, the change was made in January and February was a big uptick. I wrote more about the pricing experiment here:https://blog.chartmogul.com/firing-customers/ …
- 2 more replies
New conversation -
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.