Pricing your SaaS product or platform can make or break your startup.  After talking to market experts, CEO’s and drawing on 10 years of SaaS platform experience, here are five considerations:

1) How does your market value your SaaS product(s) or platform?
2) Contract or no contract?
3) Monthly or yearly subscription?
4) Free option (freemium)?
5) Fees? set up, cancellation, up-sells, etc.

The promise of SaaS is that powerful solutions can be developed and commercialized at low subscription fees.  That premise is build on the notion that the solution will be delivered to a large market, therefore spreading the cost.  If that TAM (total addressable market) is large enough, and the problems are common across the TAM, it works.  A low subscription price resulting in a  large install based = HUGE profit (huge valuation).

As a SaaS executive, you should know the value of your software to your market.  E.g. I can take and UBER to the airport from my house for ~$22.  That is a great deal given how easy it is to schedule, ride and pay.  If the additional fee was increased to $60/ride, I may just drive and park.  How much does your software save you user, or better stated, how much utility does the user get?  Ideally, the utility far outweighs the cost such that, as a user, I see the cost as small compared to the benefits.   That equation creates tremendous product stickiness.

If you would like to learn more, or need on-demand an SaaS CTO, CPO or CMO, contact Criticalgoals using the link below