1. You mention high value metrics v/s low value pricing metrics (bandwidth etc) – can you elaborate more on both of these? High value & low value?

    • Here’s a good post to read about that:

      But the gist is this:

      low-value: things customers don’t care about

      high-value: things customers care about

      I often say low-value metrics are commodities like storage, bandwidth, etc. and in most SaaS products, that holds true (read the post I linked to).

      Of course, if you’re selling storage, or bandwidth, or something else that might be “commoditized,” that’s still what matters to your customer so go with it.

  2. 1. You touched on this a little in your Note on Discounts in Enterprise SaaS Deals, but how do you feel about using discount pricing as the beginning of a sales funnel?

    2. I know you said that in order for a discount to work, there needed to be scarcity. What if a client say, wanted to use a discount at the end of a piece of marketing material such as an explainer video. As a video isn’t inexpensive and will most likely be used over a longer period of time than say, a PPC ad, would you advice using it? And if so, how?

    • 1. Just be careful you don’t attract the wrong customer by constantly dangling discounts in front of them. If you can’t fill the top of your funnel with folks ready to pay full price, there’s something wrong (re-read the post and watch the video on how to fix this). However, if you offer a discount immediately following their initial action – and that discount results in a HIGHER ASV (Average Subscription Value) – then that’s fine and you’re doing things right.

      2. See #1, but also I wouldn’t ever put offers, discounts,… even pricing in a fully-produced explainer video if I didn’t also have the funds/resources to change that video frequently since those things will also change frequently. That said, in your example of different ads sending traffic to different landing pages – and therefore videos – I’d have the video fully developed, but produce several different endings w/ different CTAs to splice together for the different landing pages.

      I’m glad you’re looking for ways to continue the narrative from the ad to the landing page to the CTA… and beyond. But if you want to do that with video – and do it right – you must have a video that’s congruent with that narrative.

      In other words, don’t try to get away with not doing the right thing to just save a few bucks on video production… it will cost you a lot more in the end (on wasted PPC buys).

  3. Sergey Pribyl says:

    Great learnings, what aligned with my take aways of selling Value (what is valid in Western markets and then Value is not supported by vendors in their journeys to new markets, for example Russia). Local language support, accessibility, two of such examples. WIIFT is great describing if your Value is addressable on this particular market.

  4. Hey Lincoln, great post !

    Entrepreneur, especially in SaaS, should be very careful with “simple discount”. The other day, someone told me “I don’t want to go further with this customer because he knows me as the guy who give free consulting”. Word of mouth is very fast, and online brands have to build their image on value, not discount.

    I want to emphasise that offering discounts over a long period of time can actually help to get back the CAC way faster than with monthly subscription. Allowing you to increase your investment and to develop your company way faster. David Skok talks extensively about this point in his article SaaS Economics 2 (

  5. Thanks a lot for the insights. We were just planning a Christmas discount offer. I see the value of triggering the offer announcement/message to user acc to their conversion activities – we will be implementing it.

    Do you have any opinions on announcing lets say a discount offer on pricing page/homepage (for prospective signups)? Any drawbacks you can share?

    • The only drawback is that they may sign-up for the discounted plan when they would have otherwise signed-up for the regular priced planed. On a general purpose, public page like that you just don’t have context. That said, you could set a cookie on the first visit and if they return to pricing page a second (or greater) time, show them the discount. They may need that to entice them to sign-up. Then when they go for the discount, make them a one-time-offer for a discount on the next higher plan.

      You could also do an exit intent popup that says “before you leave, here’s a discount…”

      Ideally, you can build your marketing message around a strong-enough value prop to get them to try the product and then make the offer behind the scenes.

  6. Very helpful post, Lincoln. Your advice about establishing pricing tiers inline with the high-value benefits to customers really caused us to reframe the pricing tiers we’re working to put in place. We were looking to establish pricing tiers from the perspective of our marginal variable cost to support each new unit, but realized from this post that such throttling is of low value to our customers and offers no room to upsell–because customers simply won’t pay for bandwidth they don’t need, nor should they. Good stuff, man.

  7. Thoughts on site wide increases in prices? We plan to increase all our prices on August first. Our software has made serious improvements in stability and features – we believe we have raised the value bar and work closely with our members to affirm this.

    • Raising your price is fine (and expected as your startup matures and learns from experience)… just make sure you communicate proactively with your existing customers about the change.

      Either let them know they won’t be affected by the pricing change (so they don’t panic when they hear about the price hike) or tell them that what they pay will increase, if that’s the case. Either way, just make sure they hear it directly from you first and not from your public announcement.

      Your customers think they’re part of a club and deserve special treatment… so give them that special treatment by telling them first.


    We read this posting and made a promotion whereby we would double the amount of credits if customers would by before the end of the month and made $3,000 worth of business in one day from folks that were in our free trial and didn’t convert.

    Please keep these great postings coming!


  1. Why Discounts Hurt Sales | SLINGSTONE Group says:

    […] SaaS Pricing: 3 Rules for Discounts that Work […]

  2. […] SaaS Pricing: 3 Rules for Discounts that Work […]

  3. […] A nice hack to grow Customer Lifetime Value (LTV) is to follow that action they take with a One-Time Offer (OTO) to get them to convert to a paying customer right then (to end the trial) or – if they already paid – to take advantage of an even better offer. One way is to offer them a discount, but make sure you offer the right kind of discount. […]

  4. […] and through the use of creative discounts we also drove their Average Subscription Value (ASV) up by 33%. […]

  5. […] The typical “annual discount” is just about the only one that is acceptable for a public pricing page, but as I’ve said before that there’s a better way to do discounts. […]

  6. […] And the exact wording isn’t important here, it’s the sentiment. But don’t talk about volume pricing; leave that for bulk lentils at the grocery store. If you’re going to discount, do it right and drive up Annual Contract Value. […]

  7. […] Known expansion potential can lead to immediate ASV (Average Subscription Value) boost through strategic discounting […]

  8. […] or from being included in a bundle with other SaaS products, or by running a discount campaign (the way I do discounts doesn’t cause this problem, but I digress) where we aren’t sure if they’ll stick […]

  9. […] Be aware that some marketers recommend being careful when using discounts and other similar offers because it may cause customers to become accustomed to getting discounts, or will miss the real value of your product or service. […]

  10. […] based on usage patterns and where they are on the trajectory toward their Desired Outcome – but the next plan up that they can really grow into. Offer the next “bigger” plan at the same price as the […]

  11. […] right now we’re offering this huge discount”, you’re probably not on the right track. As Lincoln Murphy points out, the way SaaS pricing discounts are done most of the time will devalue your offering in […]

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