Pricing Lesson: Perceived Value is EVERYTHING – WIP #43

If you’re in SaaS, you probably know that increasing your prices is a difficult thing to do.

If you have ever felt the pain, I’d highly recommend you check out the incredible presentation “The Slow SaaS Ramp of Death” by former CEO of Constant Contact, Gail Goodman.

After reading everything I could about this, we tried an experiment and moved to a 3-tier pricing plan structure.

Here’s what I learned from that experiment:

✅ People will pick the middle option. If you have three pricing plans, the vast majority of people will pick the 2nd plan.

✅ Perceived Value > Actual Value. We didn’t change anything in our software and our subscription price actually DOUBLED!

✅ Just raise your prices! Selling half as many deals for twice as much, your life will be much easier.

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