How to price your SaaS product:

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Chances are… you spent about 2 hours figuring out your price points…

HUGE mistake.

Your pricing is the #1 lever for your growth.

Here’s an easy way to figure out the most optimal price point for your startup.

It’s called the Van Westendorp Analysis.

Here’s how it works:

You send a survey to your customers and ask:

  1. At what price would you consider the product to be so expensive that you would not consider buying it? (Too expensive)
  2. At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good? (Too cheap)
  3. At what price would you consider the product starting to get expensive, so that it is not out of the question, but you would have to give some thought to buying it? (Expensive/High Side)
  4. At what price would you consider the product to be a bargain—a great buy for the money? (Cheap/Good Value)

After you’ve collected your responses, sanity check your data.

You have to filter out any results that don’t make sense.

For example: If you see that 1 survey response has a “too cheap” price that is more expensive that than the “too expensive” price.

After that: Plot and label your results.

I’ve included a guide for this in the first comment.

After you’ve plotted your chart…

Want to have a healthy mix of revenue/market share? Price at the Optimal Price Point.

Want to maximize market share? Price between Point of Marginal Cheapness and Optimal Price Point.

Want to maximize revenue? Price between Optimal Price Point and Point Of Marginal Expensiveness.

About the author

Dimitry Apollonsky

I'm a growth marketing pro that works with early stage companies to help them gain traction and reach their milestones through user acquisition, user retention and revenue growth.

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Hi! I’m Dimitry

I'm a growth marketing pro that works with early stage companies to help them gain traction and reach their milestones through user acquisition, user retention and revenue growth.

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