Do not index
Do not index
As you probably know, one of my core values is multiplicity, which allows me to mitigate my entrepreneurial risk by having many, loosely-connected products.
Nowadays, I run three types of SaaS products:
- b2c-like, low-ticket, self-serve, low-touch SaaS products
- b2b-like, high-ticket, high-touch SaaS products (almost software with a service)
- combinations of #1 and #2
When I started out building SaaS products, I thought the same business model could work for all of my other SaaS products. I was wrong.
For example, for the #1 type of SaaS, I should have offered annual plans as soon as possible. Instead, I followed the old playbook of only having monthly plans, increasing the price every X months, etc.
A better playbook for #1 could be the following:
- Have a free plan, which can give you traction and fuel your mailing lists/newsletter (which you can later monetize)
- Have a stupid monthly plan (for Treendly this is $49/m)
- Have an annual plan that is a great value, and also an impulse buy (this can not be $500, but it can be $99)
- Eventually, once you have enough brand equity, kill the free plan and institute a cheaper monthly plan
Now that I have this playbook running for Treendly.com, the bulk of the sales are coming from annual plans, and it really feels like recurring revenue is happening every month because of the sales velocity of the product.
For the #2 type of SaaS, where sales velocity is not as high due to the price being high, the playbook I came across as of now is:
- Do not have a trial
- Do not have a free plan
- Never discount
- Have a high-ticket plan (usually $500/m or more)
- Have an even higher ticket plan because you never know (usually, this is POA)
It kind of goes without saying, but whether you do #1, #2, or #3, you should always strive to make the product 100 times better every step of the way.
Also, these playbooks are what are working for me now, but there are tens of playbooks out there.