Key Takeaways from the Venture Lane SaaS Pricing Lab

Key Takeaways from the Venture Lane SaaS Pricing Lab

Ross Blog (2)  Ross Palley

We invited three B2B tech startups in the Venture Lane community to participate in our SaaS Pricing Lab. Participants worked directly with a Mentor Committee of seasoned SaaS pricing leaders in Boston's startup ecosystem to optimize their pricing strategies for acquisition, upselling motions, and overall higher customer LTV.

On the Committee, we had: Kyle Poyar (VP of Growth at OpenView Venture Partners), Ashley Murphy (Director of Market Insights & Pricing at Toast), and Jeet Mukherjee (CEO at Veyebo). Check out their key takeaways below!

RELATED: How To Price Your Way Back Into Growth

How to give your pricing a high ceiling while generating first revenues...

  • Charge a 'real' price for your pilots. Free or at-cost pilots don't validate your target market's willingness to pay. Charge at the same rate you anticipate charging all future customers. You can always offer pilot customers a credit on their post-pilot contract that reduces total spend.
  • Don't offer multi-year contracts. Keep contract durations to 1 year as you're still measuring ROI of your product and will be likely to increase prices in the medium term.
  • Use testimonials in the absence of data. While you're still collecting sufficient data from pilots to sure up your ROI figures, provide prospective customers with testimonials of users and economic buyers loving your product.

How to price strategically for larger accounts...

  • Set a minimum price. Large accounts are costly to acquire. If you use a top-down sales motion and charge per user, the number of users from a large account might not recuperate the acquisition cost. Set a minimum price to protect against this.
  • Use tiered pricing from the get-go. Large accounts typically represent land-and-expand opportunities. Tiered pricing will allow you to capture future revenue as product adoption grows within the organization. 
  • Trade discounts for logos. If a prospect is well known and would help to acquire other customers in the industry, offer pricing discounts in exchange for a testimonial or use of their logo in promotional materials.

How to scale pricing as your business grows...

  • Price in relation to your product's value. You will introduce new features and products over time that deliver more value to your customer. If price and value are tightly aligned from the beginning, revenue will scale along with product growth.
  • Sell standalone products that have standalone value. If customers can derive value from new products without the use of existing products, then sell them as standalone products with their own pricing. If products need to be used in conjunction for value to be realized, then bundle products together under one price.
  • Consider a bottoms-up approach to growth. If folks in your industry have a high tendency to move from organization to organization, build and facilitate communities of these users. They will be your champions at their next gigs.

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