Ask HN: What's the best pricing strategy for SaaS?
I'm building an editable 3D & flat illustration library. The idea is, users can change the color of a 3D or flat illustration and download it directly from the browser (PNG/SVG). Users can use these in their site, blog thumbnail, or app.
I'm very close to the launch but not sure about the pricing yet.
Option A: I can put a monthly price, but churn would be higher as people would just download as many as they possibly can and unsubscribe. (e.g. $12 per month)
Option B: Just yearly subscription. (e.g. $69/year)
Option C: The credit system. Get 100 credit for $50. 1 credit = 1 asset.
You can check snippets of my product here: https://makesumo.com
Please let me know your thoughts. This is my first SaaS product.
P.S. There would be freebies on the site as well.
An open Ask HN community consultation from 2020 where @micropoet convened hundreds of developers and bootstrappers to share real experiences, hard numbers, and tactics.
Hundreds of active indie hackers contributed case studies, pricing heuristics, and pitfalls to avoid when moonlighting on side projects.
Yearly subscriptions with pre-payment are great for your cashflow, you should therefore always try to get your customers to sign up for a yearly plan. We e.g. offer a risk-free refund policy for that reason: If you're unhappy with the product you can cancel at any time during the yearly subscription, we will then retroactively charge you the monthly price and refund the remaining balance (I understand this might be difficult in your case). We offer our yearly subscriptions at a 20 % discount and most of our customers choose those.
Both the Retool and Segment founders talk about "unreasonable quoting". The algorithm goes as follows:
1. Meet with customer
2. Take your ask, multiply it by 1000x
3. If customer isn't happy, divide number by 10
4. If customer still isn't happy, divide by 10 again
5. Eventually get down to the number you were willing to sell
6. Rinse and repeat.
You'll find that you may not get to step 5 as often as you think (customers pay more than you think they will)
In the meantime, you can watch this video by Michael Dearing on pricing https://www.heavybit.com/library/video/harrison-metals-michael-dearing-on-pricing/
This one from David Skok covers metrics in general, prepayment also covered: https://www.forentrepreneurs.com/saas-metrics-2/
Have you considered:
One tier and one price? Make it simple.
Consider this, how much time/money/effort do you want to spend incentivizing multiple tiers of payment which may or may not just stress out the user to not sign up?