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SaaS Pricing

Public • 512 • Free

18 contributions to SaaS Pricing
Competitive intel
Are there any free websites that provide information on companies' pricing strategies and list prices?
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New comment Nov 8
1 like • Nov 8
@Rob Litterst I follow your work and it's really deep and insightful.
Value metric update
Hi team, is there any public case study that talks about how an organization with consumption-based pricing model moved from one value metric to another one? What are the operational steps they followed?
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New comment Nov 1
1 like • Oct 31
The book the Pricing Model Revolution has some examples here. Salesforce.com is in the middle of this transition from seat based model where many authorized users never login to price per AI query. -- Kyle poyar writes a lot on this topic on LinkedIn https://www.linkedin.com/posts/kyle-poyar_pricing-ai-monetization-activity-7252658661263577088-sryV?utm_source=share&utm_medium=member_android
Greedflation -- is it real?
Atlantic interview with an economist digging into inflationary causes especially in the grocery industry. Lots of great references to academic research in supply chain, and behavior concepts like price wars, prisoners delimma, rocket/feather pricing... Whitelable/store brands get a focus near the end. (It's entirely US centric discussion, FYI for this broader global audience.) https://www.theatlantic.com/podcasts/archive/2024/10/greedflation-inflation-grocery-prices-corporate-greed/680432/?utm_campaign=the-atlantic&utm_content=true-anthem&utm_medium=social&utm_source=linkedin
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How to price AI in SaaS
I'm writing a guest chapter on AI pricing for another authors upcoming book. So I'm thinking about this a lot lately, and wanted to give you a sneak-preview of a linkedin post that will come out later next week. - I've done maybe 10 pricing projects involving significant AI functionality this year. Here is how I think about it. AI should be considered a 2-layer stack: 1️⃣ The AI compute 'fuel' (i.e. token pricing at OpenAI) 2️⃣ The AI solution (i.e. the value you add on top of AI) The dilemma with AI pricing is that currently: ◾ Fuel is expensive - at least way more so than traditional SaaS. ◾ Solutions are immature and early stage, not yet adding a lot of value. So any AI pricing model needs to both work today AND tomorrow. AI PRICING TODAY: 🔹 Charges usage-based on fuel consumption to ensure costs are covered, as usage patterns of customers is often unpredictable. 🔹 Is mostly focused on low barriers to entry to get users onboarded in order to develop the solution layer and get data on behaviour and cost patterns. 👉 This is unsustainable as fuel costs will drop and 2025 customer will refuse to pay a price-per-token (or token equivalent) that is based on 2024 token costs. This is especially true for enterprise. AI PRICING TOMORROW: 🔹 Charges based on the outcome created by the solution layer and just factors in fuel costs in the use case. 🔹 Protects against cost-downside of over-usage with 'fair usage limits'. HOW I SOLVE FOR THE TODAY-TOMORROW PROBLEM IN AI PRICING 🔸 Focus on speed: just get usage and adoption as fast as possible. You likely have a core non-AI product that monetizes just fine. Consider AI a 'development budget' and focus on profitability later. 🔸 Tell customers you are BOTH charging for fuel and for a solution outcome. Educate them. But keep it 90% fuel and 10% solution early on. 🔸 Over time: shift $$ from fuel to solution pricing. Cut Fuel pricing aggressively, even anticipating future cost reductions. Consider solution pricing separately and from a value perspective.
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New comment Oct 26
2 likes • Oct 24
This is changing super rapidly. There are companies like Predibase who can make on prem implementation much more efficient and a lot of upheaval in the major players so Agentic soltions and system designs are being set up to be able to swap from across different LLMs. The biggest factor I don't see being considered among these new tools is RISK -- there are a lot of unknown or poorly understood ways these tools can be missed and hacked. Theres a great book by Richard Heimann and Clayton Pummil called "More than you asked for" which goes over lots of emerging technical and legal topics -- training data memorization/leakage if PII, Copyright infringement, and especially with this new Caludr product that can control and install exec files into your computer traditional hacking.
Teardown of Aumico.io
Hi guys Find below a 38min video teardown of Aumico.io - a financial statement / consolidation solution for accountants. I've done 3 such projects in the past, including quite a bit of competitor research in this market. My advice to Aumico (the short version): 1) Consider selling to banks - they have a far more valuable use case for your solution. 2) Consider a Freemium over your current trial. 3) Don't split out new functionality in additional modules - keep it in and raise prices. 4) Add services to the mix - both one-off onboarding and ongoing year-end support. You can see the full email from Chris /Aumico below - and thank you to that team for playing along! Let me know what you think in the comments - did I get it right? Something you would have done differently? Do you have any advice for Chris on how to grow this? /Ulrik ----------------------- A) You will find our pricing here: https://aumico.io/en/accountant/ For example, you are an accountant with 35 clients. You will buy a license for each client. ( 35 x 65 CHF = CHF 2'275) licenses will be renewed automatically. B) 1) We simplify year-end closing for accountants. Our main target group is accounting companies in the DACH region. We currently have one Modiul but soon launch the next one. 1. Modul 1:  financial statements engine (existing) The pricing above relates to this service 2. Modul 2: financial closing: documentation of financial statements (will be released on October 15th, 2024 (The pricing is not determined yet. Idea is to duplicate the existing 3. How we do sales: Outbound mailings, push into the trial period and convert (own sales org.) 2) Metrics 1.  ARR= CHF 282'000 2. 140 customers 3. Churn rate: 5% 4. Annual growth rate: not sure how to calculate correctly. 5. 2021: CHF 14'000, 2022: CHF 122'000, 2023: 226'000) 3) Goals 1. Increase revenue 2. Increase average deal value 3. make pricing simpler for the client and us
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New comment Oct 20
Teardown of Aumico.io
0 likes • Oct 12
Seems like a bit of a feature fencing/customer segmentation issue around getting the price per client right. Ulrik mentioned the adoption issue of getting 100% of client accounts in the software vs doing some offline because they were very simple and not worth the price. This seems both like a churn risk and leaving money in the table where perhaps some feature or usage differentiation for the simplest accounts could enable accounts to bring their entire portfolio into the system which would ideally drive efficiency/consistency vs mixed methods tools.
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Christine Carragee
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40points to level up
@christine-carragee-7172
Most of my pricing work has been focused on manufacturing and distribution, but SaaS is an important part of their offerings these days offering.

Active 5d ago
Joined Aug 25, 2024
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