Using Pricing Axis To Grow Your SaaS Company’s Revenue

How do you increase your product lock-in?

How do you increase your prices without upsetting your customers?

The other day I was reading a great blog post by Brian Halligan, CEO and Co-Founder of Hubspot on going from Startup to Scale-Up.

One area that I loved was his thoughts on the “Monetization Decision”

What they realized is that early on they were lacking multiple pricing axis.

At the time they only had one when companies like Salesforce had 4.

That’s something we learned when building out Flowtown, our SaaS product that allowed companies to get social and demographic data appended to their customer email list.

If you look at the top 250 software as a service businesses, most have an average of 2-3 different ways to extract value from their software.

So in today’s video I want to share the 4 most common ways to add additional pricing axis to your product.

Here they are:

1) Plans: This is a no brainer and most SaaS companies offer different tiers of plans or packages for their products.

2) Number of Seats: If your product allows for it, charge for additional accounts or access to more admin features for teams.

3) Add-Ons: Many times this can be a 3rd party integration, or some feature that has a direct cost to you for providing but that you can upsell to your customers.

4) Other Services: This would be if you have any other products or solutions within your organizations. At Salesforce.com, these are their other Cloud product suites like Support & Marketing.

The key is to provide other elements of your solution as upsells or revenue maximizers so that your salespeople have something to offer to increase their Average Contract Value (ACV).

Using these strategies will allow you to improve your profitability and re-invest in marketing and sales activities to take your startup to the next level.

Upgrade your pricing axis. Uplevel your profits.

Simple math.