The pricing of the SaaS product or services is directly interlinked with the recurring revenue. If you have set the pricing for your SaaS product or services right and you get this price in your account in time, then you are surely on the way to the success of your business. however, setting the right price for your SaaS product is not always easy. A single mistake can affect your subscription business.
Especially for entrepreneurs, it can be tricky to work on the price of the SaaS product. Other than competitive analysis of the subscription market, you need to consider the following factors while deciding the price of your SaaS product:
- Benefits of your SaaS product
- Targeted customers
- Demographics of the targeted customers
Even if you do care, mistakes & mishaps can happen. This article is going to help those who want to collect recurring payments through their automatic payment system timely but have somehow overpriced their SaaS product. Here are some of the effects of overpricing the SaaS product or services:
Decrease in the Lead Conversion Rate
Though customer retention remains the focus of many subscription businesses, customer acquisition and lead conversion rate are equally important. One of the important factors to turn your leads into customers is to offer the rate that they cannot resist. If you want to do not want to turn away your leads, then it is high time to work on your pricing.
They say the first impression is the last impression. And you need to leave an impeccable impression on your customers. Price is part of this impression. Set the price rightly so that you can cater to more leads.
Customers always need affordable business solutions. If you have overpriced your SaaS product, then there are high chances of losing customers. The customer never agrees to pay the recurring payment for Today, the competition is high in the subscription business market. Even customers are aware of the fact that they have alternatives. If you fail to satisfy their needs affordably, they can simply leave your platform.
So, the competitive analysis of the market is very important when you are deciding the price of your SaaS product. The price that your competitor offers for a similar SaaS product can help you a lot to set the right price for your product and customers will remain satisfied.
Poor Marketing Strategy
Marketing strategy has a huge role in making your SaaS product a success. It helps you reach out to your targeted customers. Pricing is an important part of every marketing strategy. It is better to bring your sales and marketing teams to the same table when you are deciding the price for your SaaS product. Sales and marketing experts can help you set the right price for your SaaS product.
If you utilize your marketing and sales resources rightly, there is a fair chance that you can set the price for your SaaS product in the right way.
Mistakes in Coupons & Discounts
Coupons and discounts are the sure way to attracting customers, however, they are interlinked with the price. If you have failed to set the price rightly, then you cannot offer the discounts and coupons that can help you bring more customers on board. Also, a mistake in discounts and coupons can have a domino effect. They will affect your marketing strategy as well.
You would have seen ads of various SaaS companies. They highlight discounts that they offer to their recurring customers. They do so so that they can have more and more customers. How can you market the discounts and coupons that are based on the wrong pricing? So, first, work on your pricing strategy, then move towards discounts and offers.
You can consult with the experts who offer you a subscription and recurring payment management system. They can help you decide the right price for your SaaS product. SubscriptionFlow is one such platform where you can manage subscriptions and it is also a perfect recurring payment management system.