SaaS Distribution and Promotion Resource Guide

I put together this list of my BEST SaaS Distribution & Promotion posts just for you. I hope it helps!

If you’re curious how I help SaaS and Web App vendors grow their businesses – and how I can help you grow yours – you can learn more and contact me here.

SaaS Growth Hacking Experts Resource Guide

Growth Hacking isn’t a set of tactics or just about getting cheap traffic to your website… Growth Hacking is a mindset.

It’s not just about getting traffic on the cheap; it’s about understanding and exploiting customer behavior, technology, and distribution.

Real Growth Hackers use their imagination to pull all of that together to drive growth, however growth is defined (revenue, users, etc.).

It’s nice to finally have a term for what I’ve been doing since 2006 for SaaS vendors – Growth Hacking.

I put together this list of my best Growth Hacking resources to help grow your SaaS business and reach your goals.

Growth Hacking Resources for SaaS Vendors

You’ll note that some of these are focused on customer acquisition and some are focused on retaining customers. Growth Hacking can – and should – be applied across the entire customer lifecycle.

Let’s Grow your SaaS Business

For immediate consultation and advice on leveraging Growth Hacking to scale your SaaS business, schedule a 60-minute meeting with me via Clarity. If you feel a more involved engagement is required for me to help you, email me with the specifics of your situation (as much detail as you’re comfortable giving) and we’ll setup a meeting to work through the particulars.

– Lincoln

SaaS Free Trial: Feature or Time-Limited?

Freemium is free-forever, Free Trials have time limits and the psychology of the two COULDN’T BE MORE DIFFERENT!

SaaS Free Trials - Limit based on Time or Features?

I got this question from some random person and I thought you might be interested in in my response. Feel free to comment if you have similar experiences and would like to weigh in.

Q. What are the pros and cons of offering a trial version that is time limited vs. feature limited?

A. It depends on your overall goals as a company. It really is that big of a decision.

Once you have a strategic direction in place for the company, it should be clear what you’ll be doing with your “Use of Free.”

There is a HUGE difference between “free trial” and “free in perpetuity” – the latter being “Freemium.”

I see a lot of companies lately offering both a free trial and a free-in-perpetuity version.

Essentially, they’ll offer a free trial of any of the tiers or bundles – which is great – and at the end of that trial, you can pay, close your account, or downgrade to the free.

This is not new, obviously, but it is something I’m seeing a lot more lately.

How it is playing out is debatable, though, and it is because people don’t clearly understand what they’ve gotten themselves into.

Many people don’t realize that by offering a feature-limited version of their service that doesn’t expire they are now in the Freemium game and that the dynamics and mechanics (read: psychology) of Freemium now apply.

That is a subject all its own but just be aware that if you have a free trial that has no time-limit, but has limitations on features, usage, etc. that you fall into the Freemium trap and if you don’t know what your doing, you could have major conversion issues.

Also consider the fact that the people you have placed in the “free” version have already tried and decided NOT TO BUY your premium product.

You need to be very clear as to why you still want them around. How are you going to monetize them in other ways or clearly understand how to generate revenue from them in the long-run? If you don’t know, then why do you want them around?

What is the quid pro quo for their free use of your product? If you don’t know what it is, or don’t fully understand how you’ll get them to some day be interested in moving to the premium product, perhaps a free-in-perpetuity offering is not for you.

On the flip side, a time-limited trial – with or without feature limitations – is a different animal completely.

The expectations by the customer are different, your expectations as a vendor are different, its easier to plan a sales cycle around a time-limited trial, etc.

Free, time-limited trials are meant to allow a user – from there perspective – to kick the tires before they sign-up and become a customer.

And by the way, this is absolutely expected in B2B SaaS.

But there is a secret to time limits… and if you want to know what the BEST length of a Free Trial, you can find it here in my Free Trial Resource Guide!

So, pros vs. cons… that isn’t the right way to look at it. Its all about your overall strategy and aligning with the market…

If you’ve been in-market at least 6 months and are curious how we could Accelerate your Profitable Growth – including your use of Freemium or a Free Trial – contact me and we’ll setup a time to discuss your options for improving and accelerating customer acquisition.

– Lincoln
(972) 200-9317

Does Goldilocks Pricing Work for SaaS?

A Pricing Strategy for SaaS built for the sole purpose of nudging customers away from a decoy price to the middle version can work.

I was asked for my thoughts on this question someone posted on Quora: “Based on your real-world experiences, does Hal Varian’s ‘Goldilocks pricing’ result in most buyers choosing the middle option?” Essentially, this is the notion of having a low, medium, and high price to – theoretically – force people to the medium pricing tier / bundle. I decided to explore this from a value-based pricing perspective. Following is my response…

This is a great question / topic. I’m not sure anyone has data to support or dispute this at scale. Anecdotal and first hand experiences, though certainly not in aggregate, will be the best you can expect most likely and I will do my part to spread the word to get some of that input. My experience is also only in Software-as-a-Service (SaaS) and Web / Cloud Apps. While most of what I deal with could be extrapolated to include other industries, markets, etc. I just wanted to put that out there. If you’re selling brake pads, what I have to say might not work.

That all said I wanted to weigh in here with some guidance around “Goldilocks” pricing. My interpretation of Varian’s paper is that the differences between pricing tiers should be value-based, not just tiered without giving thought to the value perception at each level. This is certainly how we recommend our clients create their pricing strategy – if they go with tiers. “If” is key to that last statement.

The fact is most new SaaS and Web App companies assume they must have tiered pricing. For the most part this is due to following companies that are already in the market. They will assume since ABC SaaS app has 5 pricing levels that they should, too. What they fail to consider is that ABC has been in the market for 7 years and has the intelligence – market, behavioral, etc. – to be able to identify the proper value differentiators for each tier. Or maybe they don’t and even 7 years on they are still guessing. That is the problem with looking at other’s pricing pages – especially those not in direct competition with you – there is a serious lack of context!

So the key is that you should not do tiered pricing or bundles for the sake of having a “pricing grid” on your pricing page. For early-stage SaaS or web app companies it adds complexity, even if you leverage a light-weight subscription management solution like Recurly or Chargify. The reality is there is extra management overhead, expense, etc. and if you are brand new, right out of the gate you might not have the intel to know how to segment based on value yet. You could even turn away prospects or upset clients by using the wrong value differentiators in your pricing “bundles.”

We recommend that SaaS and Web App vendors work through a process to figure out what the value-based differentiators should be for their bundles. We put them through a value perception matrix to ensure their value proposition intercepts appropriately with what they know the market will want, but no matter how you do it, it should be done. This means, if you are considering “differentiating” bundles based on storage, for example, do your best to ensure that “storage” is a metric that is valuable enough to your customers that they want to move up to – or start out with – the next tier up. Otherwise you could cause them to feel like they are paying for something they aren’t using or alter behavior to keep from upgrading – while looking for an alternative product or service that understands them.

The other thing is, even with tiered pricing, regardless of whether you do the “Goldilocks” thing or simply have multiple tiers, it is generally unwise to attempt to have pricing that is all things to everybody if you cover a wide range of target markets or segments. Instead, you’ll need to employ market segmentation and then leverage tiered pricing within each segment. This is why you will see some SaaS apps with 7 or 9 pricing levels… everyone from tiny 1-person companies to Fortune 100 companies are represented on that one page. This is not advised.

This should make sense – what is valuable to one market segment will not be (or will not be the same as) for another and will require messaging around the pricing to convey the value to the segment. Healthcare users of your horizontal solution will speak a different language than Aerospace, just as small businesses will consume your messaging differently than Fortune 100 companies. The product might be the same (the great thing about SaaS and web apps), but how you convey the message – including pricing – is key.

But the point of “extremeness aversion” put forth by Varian is something legitimate to consider. But I would again look to that strategy in a value-oriented way. Why create a pricing tier that is your “hail mary” price (as I’ve seen some write about a high-priced version you “hope” someone chooses) if there is no real value? Do you create a high reference price so the “recommended” one looks like a bargain? Yes, but if the “high price” is not accompanied by some perception of value and appears to simply be a high price, it could throw off the entire value perception of your offering.

That is the danger of just pulling prices out of thin air (or somewhere else) and failing to work through a proper strategy. So yes, “Goldilocks” can and does work, but only when in the confines of true value-based pricing. Varian often refers to the “premium” product (tier) – premium doesn’t just mean more expensive, but more valuable. How it works, how often customers are “nudged” the middle tier, is hard to say in any conclusive way. In fact, you’ll note that most SaaS or Web Apps that have a “recommended” tier offer no reason for that, and it is quite often in the middle of 4 or more tiers, completely throwing off the “Goldilocks” nature of the experiment.

While the goal is always to get pricing as right as possible out of the gate, early stage companies are at a disadvantage due to lack of time in market. Understanding the true nature of value-based pricing, and that pricing IS marketing, can greatly improve the results of any pricing strategy. So, is “Goldilocks” a good base for your pricing strategy? It can be, but there is a lot more to it. I recommend going back to Varian’s paper (download the PDF here) and reading with with a focus on”value-based” pricing. Where he says “quality” substitute “value” and “What’s in it for them?”

If you’ve been in-market at least 6 months and are curious how we could Accelerate your Profitable Growth – perhaps by optimizing your Pricing Strategy – contact me and we’ll setup a time to discuss your options for improving and accelerating customer acquisition.

– Lincoln
(972) 200-9317