It doesn’t matter how many years of product management you’ve got under your belt, when it comes to defining pricing strategies for your product, you’ll always face unsolvable dilemmas.

I’m sure that you’ve come across some of the dilemmas mentioned below:

• My product is awesome. Should I charge more than my competitors for it?
• My product is Great. Should I charge less than my competitors for it?
• My product is Wonderful. Should I blow my competitors out of the water by giving it away for free (and pray I’ll be able to monetize it somehow later)?

I’m sure that you see a common thread here – since you’re not working in a vacuum, you have to consider the competition, or should you? Sure, competitors, especially those who’ve been there before you, are a force to be reckoned with and should influence pricing.

But, if you think that following your competitor’s price is a good pricing strategy, you’re going to hit a brick wall sooner than you think. As we all know, even if products are close in terms of features, they’re never the same in terms of quality, investment, design, costs, research, and all the other pretty lies we tell ourselves to create some distance between us and the competition.

Don’t get me wrong; I  think that surveying competitor prices and strategies is a great way to conduct that initial benchmark, but that’s where it should end. Unfortunately, there’s that real chance that your competitors are stumbling into the same numerical darkness you’re in right now, and they don’t have a clue.

That’s why you need to find a pricing strategy that is ideal for your product, brand, and company — Easier said than done, I know.

With the exception of highly competitive markets in which competitor prices should be a factor, you have to price according to the value you provide to the customer.

The ideal price according to Kissmetrics should be:

“Just high enough to need consideration but low enough to still provide plenty of value.”

This means that you need to price higher than you think (since we have that annoying tendency to undervalue our work, time, and self).

So how do you measure the value you provide to your users? By using that value-based pricing strategy of course! This strategy allows you to capture the value you provide to customers and translate it into prices.

4 Steps To Implement a Value-Based Pricing Strategy

According to the Price Intelligently blog, implementing the value-based pricing strategy is a four step process:

1. Identify and analyze your buyer personas
2. Survey your existing users and quantify value
3. Analyze the data
4. Rinse and repeat

After several iterations, you’ll have the prices you’re looking for.

Now that you know everything there is to know about how to price your SaaS product, it’s time to apply the strategy that will help you to sell it.

But first, I need to let you in on a little sales people secret; it doesn’t matter if your prices are right (or wrong). The only thing that matters is how you present them to your users. I pulled together nine strategies here that have proven themselves in the past.

These strategies work because our brain has a history.

In our primordial past, fast food chains and whole foods were not available; we were hunter-gatherers living off the land. This activity required heavy pattern recognition capabilities, which allowed us to survive, helping us to identify predators lurking in the shadows, and sweet fruits hanging from trees.

Pattern recognition in our brain reacts automatically to patterns we know, allowing us to reduce cognitive strain on our brain and save our cognitive resources for actions that matter.

When our brain identifies a pattern it recognizes, it quickly interprets its value and determines whether it’s good for us. Offers with freebies, simple structure, and visual aids go a long way since we naturally tend to go for the low-hanging fruits.

That’s why we need to offer our prices in the most digestible way possible. We need to remove potential objections and positively influence our potential user’s decision-making process.

To get you some live data, I asked eight CEOs the following five questions:

1. What is your pricing strategy today?

2. Did you ever test other pricing strategies?

3. If the answer to “2” is yes – what made you choose one over the other?

4. Did you ever ask your users about the price they would be willing/want to pay for your product?

5. If the answer to “4” is no – how did you choose the price for your pricing strategy?

Each pricing strategy will be explained prior, and you’re the one who’s going to decide what’s right for you, shall we begin?

1# Pricing Strategy: Free Trials

I’m sure that you visited an Apple store in the past 5-10 years.  Did you ever ask yourself why they allow you to touch the products on display there?

When you touch/interact with something, you get a sense of ownership over it and are more likely to purchase it. Nike uses this strategy as well; allowing users to customize their sneakers on the site before they purchase them; car sales people have been doing it for more than 100 years.

Most people think of free trials as a chance to take a swim without getting wet, but the reality is that they’re being tricked – free trials are the ultimate way to attract users to use your products and connect them with it and your brand.

In addition, the limited time users have with the product creates a sense of scarcity, and at the end of the period, users must make a purchase decision or lose access to those awesome features your product provided.

Now, you’re probably asking yourself should you go with a 14 or 30-day trial. Since you’re into conversion, I’m sure that you know the answer already – you’ll have to test it!

Moz.com CMO, Annette Promes, had this to say about their free trial offers, it’s tried, tested and tiered.

What is your pricing strategy today? 

We strive to price our products so that we are delivering excellent value to our customers in exchange for their loyalty. We want customers to feel confident that our tools will improve their visibility online before they buy.

To that end, we will offer a variety of try-before-you-buy options to potential customers, depending on the specific product. These range from the ability to check, for free, how your online business listings are represented with Moz Local (our platform to increase visibility in mobile and local search) to a 30-day free trial for Moz Pro (our complete SEO toolset) to the ability to run a free content site audit with Moz Content (our software to audit, measure, and discover content relevant to your target audience) to a free audit and analysis of your social presence with Followerwonk (our tool to help you connect to influencers and to discover tactics to grow your Twitter presence).

We offer different “tiers” for most of our products, as well, to allow customers to only buy as much access in a month as they need.

Our products are available to purchase month-to-month (no contract or time commitment) or annually, with discounts offered for the purchase of an annual plan.

Did you ever test other pricing strategies? 

We have, and will continue to do so. We’ve tested changing the length of our free trial periods (from 2-weeks through 120-days); we’ve tested the pricing tier (within a product) at which we even offer a free trial; we’ve played around with the size of the discount that we offer for folks buying annual plans (from 20% to 30% or more percent); we’ve tested bundling products together and offering discounts for doing so (For instance, buy Moz Pro and Moz Content together and get a discount); we’ve tested the access limits that we set at each pricing tier within a product; we’ve tested monthly vs. 6-month vs. annual plans; and we’ve tested gating access to certain features at different price tiers.

What made you choose one pricing strategy over the other?

Generally, customer feedback and our own analytical data. We have regular conversations with customers through our Customer Advisory Board, surveys, in-person feedback interviews, social media, and through our customer support team. We also look at customer behaviors during our tests to see what combinations of features and price points really resonate with customers, and we adapt accordingly.

Did you ever ask your users about the price they would be willing/want to pay for your product? 

Yes! We’ve done very specific pricing surveys (most recently last fall) to both current and former customers to understand from them not only what price they would be willing to pay, but what features and functionality they most value.

2# Pricing Strategy: Freemium

If free trial is perceived as taking a swim without getting wet, freemium is walking on water with the ability to look down in, and dive at will/paid.

When you price your product with freemium, you allow users to explore the basic features of your product, experience the UI/UX, and if they like what they see or, need more functionality to get the previously mentioned value, freemium allows them to purchase easily plans, etc.

Like the above free trial, they get a sense of ownership over your product, unlike free trials, it lasts forever!

When it comes to freemium SaaS models, there are a lot of pros and a lot of cons. You need to understand where you’re going with this to see if freemium is the right plan for you.

On one hand, freemium is a wonderful tool to onboard people quickly. On the other, it’s tough to change user behavior patterns once they’re acquired, especially if the customer expects not to pay for the product or has no use of the premium features.

We all remember the cautionary tale of Evernote with their 3% conversion to paid.

There are additional reasons why not to go with freemium (summarized excellently in this wonderful post). Having said that, there are a lot of companies who hacked freemium quite successfully:

Co-founder, Mike Chang told us about Sniply’s interesting take on the Freemium model.

What is your pricing strategy today?

We run Sniply under a freemium model where we offer a free plan with a bunch of free features, but we also offer a number of premium plans involving advanced features and usage at higher volumes.

Our pricing plans scale based on three core variables: volume of clicks per month, number of brand profiles, and number of team members. This allows us to charge more for users deriving more value from the product while keeping costs low for users just starting out.

When releasing new features, we often introduce them into the free plan and assess the feature’s popularity. Based on how frequently they’re used, who uses them, and overall user feedback, we then decide if the feature should stay in the free plan or moved into one of the premium plans.

Did you ever test other pricing strategies?

Our pricing strategy is always an evolving process. Currently we price based on the three core metrics: volume of clicks per month, number of brand profiles, and number of team members. Previously, we’ve tested the strategy of releasing all features for free, but charging exclusively for number of click-through conversions, which is similar to a pay-per-click model.

Under that model, we found that our users actually derive a lot more value from the product than mere click-through conversions. Many of our users find great value in the brand exposure and the ability to provide a branded link experience. This made charging solely for click-through conversions less ideal, since it neglected our entire value proposition of brand awareness.

Through a number of experiments, we began bundling our features based on a combination of click-through conversions along with branding tools such as visual customizations.

What made you choose one over the other?

We learned that products often deliver more than just a singular value proposition. Therefore it’s important to deploy a pricing strategy that takes into consideration all angles of our value proposition. Some users may use Sniply for click-through conversions, but some use it purely as a branding tool, while others use Sniply to empower their retargeting campaigns.

We chose our new pricing model over our old pricing model because the previous one was only focused on pricing based on click-through conversions, whereas our product delivers so much more than just that one thing.

A solid pricing strategy needs to take into consideration the different users who use the product, but also the different ways they use the product. We try to bucket our users into major categories, and also do the same for the most common use cases. Once we had the trends laid out, we then planned our pricing strategy accordingly.

Did you ever ask your users about the price they would be willing/want to pay for your product?

Sniply is one of the very few companies that offer a Name-Your-Own-Price option. We have a custom plan section on our pricing page, which allows our users to pick and choose the features they want, a-la-carte style, and name their own price.

Our team then reviews these submissions and we discuss to see if the request is fair. It’s difficult to craft perfect preset plans that fit everyone, which is why we offer this custom plan approach. Even though we may be able to categorize users according to the most common cases, there will always be outliers with special requirements that our preset plans don’t fulfill.

Not only does our custom plan approach allow us to capture users who would normally turn away, it’s also one of our most powerful tools for assessing how much users are willing to pay for our product and our various features.

Since our custom plan option allows you to choose features and name a price, we’re able to collect a tremendous amount of data around how much people are willing to pay for certain feature sets. This information is collected and analyzed over time to help us make better pricing decisions in the future.

Elie Khoury, CEO of Woopra uses the Freemium strategy to identify potential paying customers; this is what he had to say:

What is your pricing strategy today?

Our current pricing strategy is a freemium model where the free account has all the features enabled but has a limit of 30,000 actions per month. We believe that 30,000 actions per month is the threshold between a very small business who needs a free plan and a potential paying customer. We enable all features on the free account, rather than limiting feature access, because we want those customers to fully experience the product as it was intended to be used.

Did you ever test other pricing strategies? What made you choose one over the other?

Yes. We tested a 30 day trial for a while, but we found that it was a poor model for us since we wanted to give customers as much time as they need to set up their account and get familiar with the product, test it, etc. We don’t want to pressure customers to make a decision in 30 days if they’re not ready at that point.

Did you ever ask your users about the price they would be willing/want to pay for your product?

No

So how did you choose the price for your pricing strategy?

We are constantly evolving our pricing strategies by testing and studying the market to understand how we can best serve our customers. A lot of factors need to be taken into consideration, especially How much value we’re bringing to the customer, and our margins so we can operate and grow.

3# Free or Custom/Premium Plans

Another popular pricing strategy, it uses a principal called “limiting choices.”

If you’re thinking about placing seven plans on the page with hopes of giving your users a plan that fits, think again. Contrary to common belief, people don’t like to choose from multiple options. Sure, the plan needs to be a close variant of what they need, but it doesn’t have to be an exact match to be chosen as the plan they proceed with.

Remember I told you about that brain of ours and how it likes to identify patterns? What I didn’t mention is that too many options might cause it to overanalyze, or even freeze due to analysis paralysis.

In addition, too many choices can cause decision fatigue, something that might cause customers to stop filling forms, drop from shopping carts and reject upsells.

That’s why limiting your user’s choices is the best way to go.

Provide two or three plans tops, if they want more, offer them the ‘contact us’ option or lead them to a dedicated extended plans page.

Dr David Darmanin, CEO and Founder at HotJar, told us that it’s important for them to get new users in first with free and pro plans (Pro priced at $29) and then scale up with larger businesses. 

What is your pricing strategy today?

We have priced Hotjar on the lower end – with lower data points offered… the reason is that we want to make it more accessible to everyone… and then scale up data points for larger businesses. We took the ‘sampling’ approach to make the data still useful if you don’t collect all your data points.

Our strategy is to offer ‘value innovation’. More quality and value for less price. It’s the strategy referred to in ‘blue ocean strategy’.

Did you ever test other pricing strategies?

Yes – we have now started testing another axis of pricing… offering automated daily recordings (not manual).

What made you choose one over the other?

It’s another axis of pricing rather than a replacement.

Did you ever ask your users about the price they would be willing/want to pay for your product? How did you decide the price for your pricing strategy?

We are planning to do value comparison. We chose the lowest friction ‘no brainer’ price to start. We could have gone higher… but it was not worth the risk since we wanted to be very aggressive with taking over the market.

Matthieu Vaxelaire, CEO of Mention.com, keeps it simple, separating website and custom pricing.

What is your pricing strategy today?

We have 2 types of pricing, transactional (public) pricing you can find on our website and custom pricing based on customer specific needs.

Did you ever test other pricing strategies? What made you choose one over the other?

Yes, we used to be a freemium tool, than we moved to a single strategy based on transactional sales with no custom pricing.

As our solution gets more powerful we attract larger customers so we offer custom pricing.

Did you ever ask your users about the price they would be willing/want to pay for your product? How did you decide the price for your pricing strategy?

No. The decision came from the value we create.

4# Pricing According to Active Users, % of Use or Features

How do you offer real value to your users?

Is it by serving them 1, 5, or 100 user plans? Or by pricing per active user, the real metric that matters both to you and the user?

I know that you know the answers to these questions, but there’s an inner conflict within you – I can sense it from here.

You think that providing a set number of users justifies your package price. We all know that fewer users = less money, right?

Well, it doesn’t work that way. Some customers who don’t use their user quota or % of service (and most don’t), will move to smaller packages and share their user/pass with colleagues. There’s also that chance that they’ll leave your service because they feel like you’re not providing the value they were expecting.

In all these cases, you’ll lose imaginary users and real customers!

Jeff Morris, VP Product Marketing at GoodData decided to free customers from unnecessary user charges, allowing users to scale with the product feature that they need.

What is your pricing strategy today?

We offer a SaaS subscription to our platform.  The variables are a platform operation fee that accounts for the number of unique use cases or data products deployed in the platform, and the number of (and features enabled in) analytic “workspaces.”   Workspaces are analytic packages that include an agile data model, defined users and roles, analytic data isolated for those users or their organization, and the calculations and visuals for those users.

We have chosen to eliminate common practices of licensing based on number of users, number of servers and amount of data consumed in the platform.   Our model focuses on driving widespread and successful adoption of our solution–we grow as our customers grow, without penalizing them for that growth.

Did you ever test other pricing strategies?

Yes, we have tried many other strategies:  Charging by user is too restricting for customers, and does not encourage analytic adoption.  Charging by data volumes was unpredictable and discouraged expanding analysis, which also stunts adoption.

What made you choose one over the other?

We chose a value-based model that is designed to grow as our customer grows.  This model matches our preferred use cases in support of ISVs who embed our product within theirs, and in support of creating Enterprise Analytic Publishing and delivery of data products that allow enterprise organizations to unlock the value of their data by sharing it with customers, partners and subsidiaries.   Our model now encourages adoption and usage, and creates predictability within our customers and our own business model.

Did you ever ask your users about the price they would be willing/want to pay for your product?

Yes, we regularly test our price points with customers, especially using our Customer Advisory Board.  They resoundingly rejected per-user pricing, which was one of the drivers for us to drop that as a lever.

Paul Campbell, Founder of Tito’s event management software, takes a % out of sold tickets and helps free ticket events to stay free.

What is your pricing strategy today?

We follow the Amazon Web Services model: an on-demand usage fee based on a percentage of the value of each ticket our customers sell. Customers can also opt-in to pay a setup fee or a “reserve” fee to reserve a lower rate for a period of time.

Did you ever test other pricing strategies?

We experimented with fixed rate pricing in the past, but it was hard to strike a balance and ultimately some or other customer would be punished … so a percentage based model just works out the most fair.

We also experimented with _lower_ pricing and we found our prices were too low … we didn’t need to offer such steep discounts.

What made you choose one over the other? 

Ultimately we realized we were needlessly leaving money on the table and making building a sustainable business harder on ourselves. We upped the prices and nobody complained (we kept our existing customers on the same rates they had been on)

Did you ever ask your users about the price they would be willing/want to pay for your product?

We often enter into discussions with our customers, and some of our customers prefer to pay less because they don’t feel they would get the full use of all of the features we use. Other customers feel like they are getting far more value than they pay. It depends!

How did you decide the price for your pricing strategy?

Even though we did talk to customers, ultimately, we chose pricing based on the fact that we feel we have a premium product. We wanted our initial offering to reflect our belief that we have a very strong product. We offer the ability to get better rates tied to a commitment, but we chose premium pricing for what we believe is premium service.

#5 Start Up Pricing

I’m sure that this one is going to interest all the SaaS start ups out there.

As a start up, you need to know from where to start? What’s the best pricing to get customers on board when there’s no awareness to your service? Or even worse, when you need to educate the market?

Many start ups offer their product during the beta stage for free, but when you go out of beta, you need to provide a price tag that will:

Keep all the users you’ve gained onboard.

Won’t scare new clients.

There is no one strategy that can tell you what’s right for your start up, finding the right pricing strategy is a journey that begins during your beta when you interview customers and it never ends, you’ll always have to test your pricing strategy!

Sujan Patel, Founder and CEO at ContentMarketer told us an interesting tale about how his company found their current strategy, he also gave us a warning that it might change in a few days ☺

What is your pricing strategy today?

We’re charging $9/month for each of our products: Connector, Notifier & $19/mo for Marketer (our email finder tool). My strategy now is to charege the lowest amount possible to get market penetration. Our products help marketers promote content and since content promotion is something not that widely adopted we’re using the low price to reduce the barrier to entry. We also launched Connector & Notifier products as free tools to gain exposure and test the market. People loved it and begged us for a few more features, so we asked what they’d pay for them, added them and made the products paid at $9/mo.

Did you ever test other pricing strategies?

Yes, we tested many price points and strategies..hopefully our strategy is the same by the time this article goes live Last March when ContentMarketer.io was in private beta we tested charging $999/year for a managed service + our software & $99 a month. At launch we tested $49/mo but a few months later found out that $9/mo & $19/mo worked best when we got people to sign up by offering a 50% off discount for expired trials. It turns out at $19/mo tell us all the time that our prices are too cheap for the value but at $49 no wants to fork out the cash. Go figure

What made you choose one over the other? 

Adoption and net growth. Our goal is to build tools to help marketers and we’ve got a few more products up our sleeves, so in order to do that, we need to get the right volume of users.

Did you ever ask your users about the price they would be willing/want to pay for your product?

Yes at every step of the way we asked our users. We surveyed them on our homepage and made pricing only available via email so we can test price points.

6# Comparison Tables

This one is an oldie, but a goldie.

Almost all of the above companies are using it.

I’m sure that you saw pricing pages that have plans organized according to available features, or pages that emphasize features instead of prices, these comparison tables are everywhere and for several good reasons.

It’s the best way to compare plans feature wise.

It’s intuitive and well known, potential clients know for what to look and where.

It’s an excellent way to focus users on value instead of the price!

How does it focus users on value instead of price? Through a cognitive bias called the framing effect.

Remember the above-mentioned pattern recognition capabilities we all have? Well, framing is one of the ways our brain finds patterns in the world around us. This bias focuses the potential customer on contextual focal points that frame the value they receive in a more appealing way.

How is it more appealing?

When you increase the size of the users each plan provides instead of the price size, the framing effect kicks in.

It also happens when you reduce the font size of the price and increase the fort size of all your features.

When you create a list that shows how features influence the user positively (97% SLA instead of 3% Change of failure).

As awesome as the framing effect is, it can’t shield your users from another effect that lurks in shadows of these comparison tables.

Framing works great when there’s a free vs. premium plan, in this way, potential customers can see how a premium plan adds value compared to the free. However, when using the framing effect to compare between several plans, it focuses users on the wrong frame, the negative one.

Why? Because when people are asked to compare they mistrust almost automatically, focusing them on problems that might pop rather than the value gained from each package. Comparison activates conscious decision making and negates the effects the framing effect.

#7 Annual Plans

As with the comparison tables, almost all of the above companies use this strategy.

You know that your potential customers are looking for a deal, even if your product is a great fit your customers would love to get some discount on it. But giving them an automatic discount can cause a lot of problems in terms of brand image and perceived value.

That’s why you need to give a discount that will feel like a win-win situation, purchasing an annual plan with a two-month discount fits the bill. There are so many benefits to both you and your customers in an annual plan that you just can’t afford not to offer them!

It secures a customer for a year (or 14 months if the extra two months are framed as a 12+2 months bonus).

It shows customers that there’s a serious company that can provide support and value for more than a year, and that has done so before (The inner dialog explains that to the customer: “Hey, I’m sure they have a lot of customers if they offer an annual plan.”)

And of course – with annual commitments, churn goes down! (but it doesn’t mean that you need to stop your investment in retention, au contraire).

Summary

Finding the right pricing strategy for your SaaS product is not so simple as many startups think, so you need to work hard until you find the right strategy that suit your product, your audience and your market.

Which SaaS pricing strategy did you like? Have you any personal favorites to add? Please share in the comments below!

 

There are many elements to take into account when creating a pricing page. From strategy to messaging and finally the design, each element has an active and important role in converting visitors into paying customers. Below I have divided the building of a pricing page into 2 main categories: The strategy and the design. Each part of the pricing page structure is important for increasing conversion rate. Take a look at the pricing page examples below to see what other businesses are doing, the good, the bad and how to fix it.

If you’d like to enter our monthly round of landing page critiques and get optimization tips, send us an email to contact@conversioner.com with a link to your landing page.

Building a Pricing Page Strategy

When it comes to our purchasing habits many different elements influence our decision making process. From evaluating the decision to be made, gathering the right information, identifying the options, weighing the alternatives and finally making a decision, many psychological triggers kick in and effect our final decision. There are many elements to take into consideration before the actual design.

1. Predefine customer obstacles & objections

Before starting your design, list all the objections your potential buyers are likely to have to becoming a paying customer. This list will give you an idea of what you need to tackle on your pricing page, which elements should be emphasized on the page, and which removed.

Once you’ve made a list of your potential customer’s objections your next step will be working on your pricing strategy. 2 elements that will help you define a pricing page strategy:

• Knowing how much it costs to produce your product/service – How much does your product cost? what goes into it. Check out Buffer’s pricing page example below to get an idea of how it’s done.
• Understanding your client’s willingness to pay – We tend to value our product or service at a much higher price than people are actually willing to pay for it, simply because it’s ours. How much will your customer be willing to pay? will they be willing to pay? and when?

2. The Messaging

Moving on, the next step in your pricing page strategy is defining your messaging. Remember that customers are going to be looking for the “What’s in it for me” element.

Two common mistakes I see happening all the time:

• Focusing on your product or service rather than the outcome and bottom line for the customer.
• Giving many warnings to customers before they’ve even chosen a plan. (AKA: no gimmicks! no questions asked! money-back guarantees)

These two mistakes, especially the second one, plant worries in your customers mind before they’ve even had time to think of them.

Treehouse fits in with the majority of companies who focus on the action, not the outcome – “Signup for Treehouse”. You have to read the fine print to understand what you gain.

CodeSchool on the other hand focuses on the outcome: Learning by doing. They manage to emphasize that becoming a customer means you will learn to code and that 900,000 other people are doing it (which is a great way to communicate trust).

3. Pricing Plan Names

The names of your pricing plans matter, by using meaningful names you can reduce customer frustration and direct them to a particular plan that’s good for them.

Mailchimp helps customers identify their needs and make a quicker decision. By distinguishing between entrepreneurs, growing businesses and high volume senders, customers know immediately where they fit in and can choose a plan quickly.

4. User Psychology

There are many psychological triggers that effect our purchasing decisions, like Anchoring, analysis paralysis, the endowment effect and other cognitive biases that can be used in our pricing page design.

Using techniques such as free trials, specific plan sales and premium plans can increase conversion dramatically. Using psychological triggers brings us back to the basics: Recognize your customer’s emotional triggers, what will trigger them quickly and what is the best way to convince them to purchase your plan. Check out these 10 psychological triggers you can introduce in your design.

5. Easy to Understand

The last and most important part of pricing page strategy is remembering to keep it simple and understandable. Don’t try to reinvent the wheel; don’t make it too complicated to understand. You want visitors to get the bottom line of your pricing page in a few seconds, recognize the right plan for them and choose it. Don’t over complicate it with text and new ideas.

Designing a Pricing Page

6. Reduce Copy

One thing you want to watch out for is the amount of text you use on your pricing pages. Many marketers try to add as much explanation as possible to their pricing page, essentially making it hard to read, pushing important and relevant information below the fold and making it hard for people to understand the page. Reduce the copy to a minimum, make sure to show only the most important content needed above the fold. For additional reading, add the rest of the information below the call to action button.

7. Keep it simple, clean & uncluttered

Steer away from cluttered pricing pages. Similar to reducing your copy to a minimum, make sure your pricing page is easy to comprehend and analyze. People won’t read everything; they will skim through your proposals. Remember, people want to be navigated in the right direction, they want to know where to look and what to click, maintaining a clutter free pricing page will help them do that.

Checkout Dyn’s pricing page. What is going on here?

 

8. Make it Comparable

When building a pricing page you want to make sure it is easy to compare your offerings. Potential customers see dozens of offers a day and need to have an easy way to compare these offers. Creating a few optional plans and highlighting the differences between them helps not only in making it comparable but also in directing your customer towards the plan you want them to choose.

Note how 3dCart makes it easy to compare their different plans and highlights the one plan they want customers to choose. This layout allows customers to quickly see the differences between the plans and choose the most relevant one for them.

9. Tell them what to choose

Other than making pricing plans that are easy to compare, you want to help customers choose a plan. When we have too many options and aren’t sure what to choose, our default is not to choose. This is a cognitive bias known as Analysis Paralysis. To ensure this doesn’t happen to your customers, giving them a few different options isn’t enough. Use design elements, test, and direct customers the right way. Notice how 3dCart uses the orange color and a “Most Popular” banner to guide customers to choose their Professional Plus plan.  There are a few ways to guide people in a certain direction, I would suggest testing the following:

1. Use a color to highlight a specific plan (similar to what 3dCart does)
2. Use the “anchoring” technique – show a higher price first and a more affordable one next to it. It is best to set the higher price on the left hand side.
3. Calculate the best plan for your customer

10. Show Trust & Security

It all comes down to trust and feeling safe. People want to know their information is safe, that you’re a safe business and that they can trust you. There are many ways to increase trust and safety on pricing pages, we’ll focus on the two most common ones:

1. Testimonials – show potential customers that you have many other happy and satisfied customers.
2. Trust icons – show off your partnerships and security methods.

Statista offers trust elements above the pricing plans in the shape of customer logos, emphasizing their many important clients and also uses additional known logos of companies who publish their data. Additionally using testimonials below and next to the pricing plans, Statista presents their many satisfied customers.

11. Convert to their Currency

A great way to increase pricing page conversion rates is to show pricing currency according to the customer’s country. By offering an option to change to their own currency, customers will be able to compare plans easily without the need to convert pricing themselves.

12. Focus on the CTA

Too many pricing pages have their call to action buttons below the fold, basically making customers scroll in order to checkout. Your call to action should be visible to a visitor immediately and should also be the first natural place a visitor looks at. Make sure your call to action button stands out, and that no other elements overshadow it.

13. Limit Amount of Plans

Similar to the Dyn pricing page, remember that too many options can cause frustration and increase bounce rate. Use pricing plans so customers can compare and find the best plan for themselves but use the minimum brainpower needed. Try testing the number of plans you have.

‘Conference Badge’ uses two simple pricing plans to make it easy and quick for the customer to choose.

14. Yearly vs. Monthly Plans

“Choice supportive” is a term in psychology that recognizes our tendency to remember our choices as better than they might have actually been. When we look back on our purchase decisions we tend to rationalize the reasons we chose the way we did and feel satisfied with them. This is why a one time yearly payment is considered better than a recurring monthly payment that may make our customer reevaluate their purchase each month. Test yearly pricing plans vs. monthly pricing plans  to discover what your customers prefer.

15. Introduce Chat

Chat is a great way to communicate with your customers during the checkout process. Many customers have minor issues that could be addressed immediately and increase your conversion rates. In fact Forrester Research has demonstrated that:

• 44 % of online consumers say that having questions answered by a live agent while in the middle of an online purchase is one of the most important features a website can offer.
• Chatters who engage via proactive invitation are 9.8x more likely to convert than visitors who don’t chat.

There are many quick and easy chat plugins you can use on your pricing page. Definitely test some out (our current favorite is Zopim).

16. Introduce Exit Pops

A great way to capture people before they leave your pricing page is using a dedicated exit pop. I do not mean the automated exit pops that look like an error just happened on your browser; I mean a pop up that is designed personally for your customers. An exit pop can be used in many ways, the two most common are:

1. Giving a last minute deal before leaving
2. Capturing a customer’s email before leaving

‘Uncommon Goods’ uses a pop up for people navigating out of their site and pricing page by offering special sales to those who sign up:

17. Start Testing

The secret to any good pricing page or landing page is constant testing. There isn’t one best way to design a pricing page, everything needs to be tested and personalized for your customers. One thing that works for your competitor won’t necessarily work for you and vice versa, continue testing ideas and trying new modules on a monthly basis.

Pricing Page Examples

18. PlanGrid

This app for construction workers uses a few elements worth mentioning.

The Good:

• Great pricing plan names that illustrate the type of plan you’re about to choose – from simple “hammering” for quick storage to the full blown “crane” offering unlimited storage.
• Their pricing plans are simple, easy to understand and are easy to compare.

Needs Optimizing:

• On the other hand, they’re missing one very important element – a Call To Action button. Though the plans are clickable, people need a call to action, a sense of direction directing them where to click.

19. Koding

The Good:

• Koding’s pricing page is a great example of a clean and uncluttered pricing page.
• Great work on directing customers to a specific plan using the orange color.
• Another good thing to notice is their pricing is automatically set to a yearly plan.

Needs Optimizing:

• Unfortunately their call to action button is below the fold, and the plans themselves aren’t clickable so you have to scroll in order to convert. Similar to previous pricing page examples, remember that the call to action should be the first natural place a user looks to.

20. GetResponse:

Get Response has a different structured pricing page that what we’re used to seeing.

The good:

• They’ve pre-checked their favorable plan for the customer and do a nice job on emphasizing their chosen plan.
• Great banner for the yearly plan, I would however test pre-checking the box.

Needs Optimizing:

• The first issue is that once you’ve clicked on a plan, nothing happens. People are supposed to somehow understand they need to scroll to continue.
• Nice work on the clickable plans but people need actual call to action buttons.
• Stop warning people – no contract, no obligations, cancel anytime – companies can’t resist saying this on every pricing page but by using negative words they’re just putting ideas into people’s heads.

21. Buffer

Buffer is an extremely cool platform for managing your social accounts on. We’ve been using them for a few years now.

The good:

• The way their pricing page is setup shows that their emphasis is on getting people to first signup and only later convert them into paying customers. Their call to action is simple and easy to understand.
• Their pricing module is pretty simple to understand with 3 basic modules.
• The testimonials and trust icons introduced below the pricing plans are a great way to increase social proof.
• They recently added their “Transparent Pricing” which I think is a great way to explain the costs to a new customer.

Needs optimizing:

• The fist issue they have is they don’t really highlight any specific plan. Even though one plan has a dominating call to action color, there is no real emphasis on one plan or another.
• One big issue is that once you choose a plan a pop comes up summarizing the total amount you’re going to pay once the trial is over. Until now, customers were ready for a certain amount on a monthly basis and suddenly the pricing jumps to a one-time payment.

22. Spotify

The good:

• Comparable – Spotify makes it very easy to see the difference between their two pricing plans without even reading the fine print. The image of more devices without the ads paints a clear picture of what a customer gets by choosing to pay.
• Their premium offer is highlighted in a great way and clearly directs you to a certain plan.

Needs optimizing:

• As the pricing page is on the main homepage and not on a separate page, less emphasis has been given to social proof & trust elements. I’d definitely test adding some to that part of the page.

23. Wufoo

The good:

• The one thing I like about their pricing page is the naming of the plans. Assuming people understand the definitions, these names do give you an indication of what you’re getting in to. That being said, a plan that’s named Ad Infinitum (as in infinite, never ending) may scare of some people…

Needs optimizing:

• The pricing modules are extremely cluttered with a lot of text and color, it is very hard to understand which module is the right one without carefully analyzing each plan.
• Although they’ve added a “most popular” banner to one of the plans, it’s very hard to locate in the sea of information, text and color.
• The arrows indicating a “yearly” plan are alarming in the way that I have no idea what will happen if I click on them. Will I be sent to a payment page? Will everything change?
• It seems to me that the biggest difference between the plans is the amount of people who can answer your forms. In this case I would focus my pricing page on that.

 24. Zendesk

The Good:

• Zendesk has a clear and uncluttered pricing page that highlights a preferable plan.
• Their “Compare these plans” button is a great way of presenting relevant information below the fold without cluttering the main part of the pricing page.

Needs Optimizing:

• Two ‘call to action’ buttons is problematic, you either want people to try a free trial or become paying customers. Offering both options on each plan makes it confusing and will reduce conversion rates. I would definitely test this; you’d be surprised how many people would simply pay if they didn’t have the option to try.
• In addition to having two call to actions on their main plan, their call to action changes from plan to plan and isn’t consistent. Remember to give a consistent experience throughout the page so people can identify the call to action.

 25.YepText

The Good:

• Besides the good use of trust icons and social proof, the way this page is built is very interesting. In fact, their way of getting you started is making you first choose a keyword and only then a plan.

Needs Optimizing:

• The biggest issue here is that they’re highlighting 2 different plans. On one hand it says “Best Value” on the $59 plan, but on the other hand the $9 plan is highlighted and pre-chosen for the customer. It’s not really clear what would be the best choice.

26. Litmus

The Good:

• I’ve already mentioned these for a few of these pricing pages but as you can see they do a great job of using social proof (testimonials and trust icons) to ensure clients they’re in safe hands.
• They’re structure is good and easy to read. The fact they put their highest price on the left, ensures people will read it first and have that price set as an anchor.

Needs Optimizing:

There are two major issues with this pricing page:

• They’re not telling customers what to choose. People need direction and help in choosing the right plan. Litmus is missing a major part of their pricing page by not telling people what to choose.
• Another important element they’re missing is the use of annual plan vs. monthly. They actually have much better pricing for companies committing to a yearly plan, but don’t mention it anywhere. Unless you click on “annual” you don’t really know it’s worth it.

The Perfect Pricing Page

There is no “one size fits all” solution; each pricing page should be tailored to its audience and tested regularly.

Remember that a pricing page is the first place a customer puts their vote of confidence in you and your product or service. When designing a pricing page plan, make an experience your customer will remember and feel good about.  Similar to landing pages, pricing pages should be optimized and tested on a regular basis.