SaaS pricing page design is always evolving, and when I created the Pricing Page Success Formula for SaaS and Web Apps in 2009, the jury (me) was still out on whether placing the high priced version of your product on the left and moving lower to the right really mattered.
I knew that technically this should matter (more on that later), but I wasn’t seeing it in practice. After a few more years and tighter analysis, I see why that is and what was muddying the waters.
SaaS Pricing Page Design is Constantly Evolving
So first, let’s be clear that placing the highest price on the left side of your SaaS pricing page is not a Universally accepted practice, yet.
FreshBooks doesn’t do it…
But CrazyEgg does…
So what gives? Which one is best?
Well, it turns out, all things being equal (and equally good), the left to right, high to low approach seems to provide a statistically significant lift every time.
SaaS Pricing Page Design Fundamentals Don’t Change
Before I get into why that is, let me be very clear…. left to right or right to left, if your B2B Pricing Page lacks the key elements of Success – Value Messaging, Trust Factors, Social Proof, Value Differentiators in the Pricing Bundles/Versions, etc. – then your Pricing Page will fail to convert customers at the optimal rate.
However, if you get the “other stuff” right, it seems that the highest-price-on-the-left approach works best.
And guess who we have to thank for helping understand why that is? Yep, Robert Cialdini and his amazing book Influence.
SaaS Pricing Page Design Influences Customer Action
In the book, Cialdini describes at length how the “rejection-then-retreat” (also referred to as the “larger-then-smaller-request”) technique can be used to systematically present options to clients/customers in a way that will consistently result in higher sales.
To hammer home the effectiveness of this technique, Cialdini cites a powerful study from a report in Sales Management magazine, reprinted in the January 1975 Consumer Reports:
“If you were a billiard–table dealer, which would you advertise – the $329 model or the $3,000 model? The chances are you would promote the low-priced item and hope to trade the customer up when he comes to buy. But G. Warren Kelley, new business promotion manager at Brunswick, says you could be wrong….To prove his point, Kelley has actual sales figures from a representative store….During the first week, customers … were shown the low end of the line … and then encouraged to consider more expensive models – the traditional trading-up approach…. The average table sale that week was $550….However, during the second week, customers…were led instantly to a $3,000 table, regardless of what they wanted to see…and then allowed to shop the rest of the line, in declining order of price and quality. The result of selling down was an average sale of over $1,000.”
This is pretty exciting stuff as it won’t just help you convert more customers, but by “selling down” as opposed to “selling up,” it will allow you to convert more at a higher Average Selling Price (ASP).
And we know, for Recurring Revenue products, a slight bump in the ASP can have a profound effect on the Customer Lifetime Value (LTV)!
By starting with your highest price products first, people are more likely to end up somewhere in the middle. Conversely, by starting your selling process at the low end, you are more likely to end up with average sales prices that are near the low end.
Again, just creating 3 different bundles and slapping a price on them hoping this technique will help raise your ASP is wrong-headed thinking.
You have to have value differentiators between the bundles and have a clear understanding of your customer, their value perceptions, etc.
Where this tactic might not help – but is always worth testing – is when you have bundles or versions that appeal to different types of customers.
Take Bidsketch for example:
The plans that Bidsketch offers – Freelancer, Studio, and Agency – each appeal to a different market segment rather than the different levels of customer within the same market segment.
In this scenario the different types of customers aren’t really comparing the different pricing plans but are likely to select the version they self-identify with, making the “rejection-then-retreat” method a non-starter; right, left, or middle if I’m a Freelancer, I’m probably going to choose the Freelancer plan.
But, again, all things being equally good, left to right seems to be the right way to go.
And by “right way to go” I mean “it is something to A/B test!”
Let’s Optimize Your SaaS Pricing Page Design
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 – email me and we’ll setup a time to discuss your options for improving and accelerating customer acquisition.
– Lincoln