Geeks really, really love pay-per-use models or plans which are priced by e.g. "50,000 pageviews for $50, 250k pageviews for $200", but these are rough things to run by non-technical decisionmakers. Many good customers are not good at capacity planning.
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Companies often value surety of pricing a lot more than they value lowest possible prices. It's easy to understand why this is the case if you've ever budgeted for one or done internal expense reporting; sometimes you're asking someone to do 12X as much work w/ variable pricing.
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Also, when you have variable pricing or something which is priced off an axis which is opaque to the decisionmaker, you're forcing them to ask the permission of a business analyst to buy your software. Note that business analysts are not scored on giving permission to buy SaaS.
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Worth noting, because it crops up very, very early in the life of B2B SaaS: The person who makes the decision to use the SaaS != The person who makes the decision to buy the SaaS != The person who pays for the SaaS
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Very, very few SaaS companies have a really good understanding of user behavior when those three actors are different people. It breaks *all sorts* of assumptions which are baked deeply into e.g. metrics tracking, etc.
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The simplest complicated adoption case, of which there are many variants: Team lead has a business need for something. They ask around the office. An IC suggests your software and signs up for a free trial. They loop in team lead, who makes buying decision.
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Team lead *probably* has a purchasing card (depends on your industry and geography) but very well might need to loop someone from IT or accounting in to actually buy the thing.
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Annual discounts: great for cash flow, even better for churn; if you price month-to-month you should almost certainly have them. The easiest offer is "1 month free"; 10% off or 15% off are easy to communicate, too, but uptake on these offers is similar in A/B testing, so...
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Easiest two variants on annual discounts: a) Do them, but also send people an email after they've activated (achieved material use of software) saying "Hey want free money? Upgrade to annual; save
$X." b) Do them, but also send an end-of-year promotion email about them.1 reply 2 retweets 21 likesShow this thread -
The incentive for the end-of-year promotion email is (for relatively small businesses) booking the expense before end of year saves them a bit of money on taxes and (for relatively more sophisticated businesses) "Your budget: use it or lose it. Why not use it?"
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"Patrick, are you assisting people in defeating their purchasing departments?" *cough* Never. *cough* Really: $249/$499 exist as price points specifically to do security research about the bounds for no-signature-required p-card limits while allowing $10k+ software sales.
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(In related news, enterprise purchasing departments and enterprise sales are basically in an uneasy state of codependent evolution with each other. Their iterated game is ultimately prosocial, and neither can exist without the other, but they have to be tactically adversarial.)
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