# How to price your SaaS product
(summary of a blog post)
https://www.lennysnewsletter.com/p/saas-pricing-strategy
This is a very useful 101 on SaaS pricing. Provides many good insights, worth
further study and referencing.
## In the beginning, the actual number you're charging isn't that important
Care for the magnitude. 5-10-100-1000-10k?
## Step 1: Determine your Value Metric
What are we charging for. Also, be wary of the revenue "under the curve".
Flat boxes "Good-Better-Best" are often not advantageous enough. Focus on
metric which scales with your customers.
## Step 2: Determine your customer profiles and segments
Be extremely aware who is the buyer and how they tick. The guy provides a
useful template for analysing the persona. It goes beyond what I saw on other
canvases, so it might be a useful analytical tool.
## Step 3: User research + experimentation
> 1. Priority 1: Foundational [See above]
> * Core customer segments
> * Value metrics
> 2. Priority 2: Core
> * Order of magnitude price point (are you a $10 product vs. a $500 product)
> * Positioning and value props
> * Packaging
> 3. Priority 3: Optimizations
> * Add-on strategy
> * Specific price point (are you a $10 product vs. a $11 product)
> * Price localization/internationalization
> * Discounting strategy
> * Contract Term optimization
> 4. Priority 4: Growth accelerators
> * Freemium
> * Market expansion (going up or down market)
> * Vertical expansion
> * Multi-Product
## Some other data
1. You should localize your pricing to the currency and willingness to pay of the prospect's region
2. Freemium is an acquisition model, not a part of pricing
3. Value propositions matter oh so much
4. Don't discount over 20%
5. For upgrades to annual discounts don't use percentages and try offers
6. Should you end your price in 9s or 0s? Depends on your price point
7. You should experiment with your pricing in some manner every quarter
8. Case studies boost willingness to pay quite a bit
9. Design helps boost willingness to pay by 20%
10. Integrations boost retention and willingness to pay
