2nd Base - Reach Product Market Fit

How to name your SaaS pricing plans, packages, and comparison tiers

When packaging and naming your SaaS pricing comparison plans, we use 3 inputs: jobs-to-be-done, utility value, and making safe choices.


SaaS pricing is a tricky topic for start-ups. 

How to structure your pricing plans, how much to charge, and name them--the list goes on. 

Every single detail of your pricing strategy impacts your bottom line, one way or another. There’s no exact science or ‘calculator’ to determine your strategy regarding your SaaS pricing plans.

Rather, it requires user research, A/B testing, understanding the value your product creates, and competitive analysis.  

Each software is unique, living within its own industry, vertical, and market. Therefore, how you name your SaaS pricing plans should be consistent with your brand imagery, messaging and positioning, and customer base. 

Related VIDEO

SaaS North 2021 breakout: Your pricing is always on

Stijn's full breakout session on pricing from the November 2021 SaaS North conference covering B2B SaaS pricing strategies, philosophies & a tool for optimizing your pricing.

WATCH SESSION

Why your SaaS pricing plan names matter 

SaaS pricing plans often work on a tiered structure with different features and benefits--also known as the value your products provide. These tiers help address a fundamental need in marketing psychology: to provide your audience with a choice and give them control.

As you begin to ideate pricing plan names, consider the different capabilities and value each plan offers to your end-user.

Your SaaS pricing plan names should draw attention, appeal to your buyer personas, and draw your prospects to the highest tier possible (your Hero) all without marginalizing your other pricing plan options. Importantly, you should name pricing plans in a way that helps your user identify with their needs. 

SaaS pricing should do two primary things: 

  1. Help your audience make the right decision, which leads them to become longtime, happy subscription customers—users who pay and stay.
  2. Maximize the annual revenue per unit (ARPU) by helping them use, like using, and keep using the highest tier in your offering that generates value for them.

For example, a three-tier SaaS pricing model might have options called ‘Light,’ ‘Pro,’ and ‘Advanced’ to align with the stages of growth within your ideal customer profile. Let’s explore my methodology for naming SaaS pricing plans and how you can develop yours accordingly. 

Three strategies to name your SaaS pricing plan 

1. Provide guidance

The first way to name SaaS pricing plans is by meeting your audience and how they view themselves. You should empathize with your users and their needs.  

Zapier does this through their automation software, as seen below: 

zapier pricing saas

By naming their pricing plans ‘Free,’ ‘Starter,’ ‘Professional,’ and ‘Team’, users can self-identify what plan best aligns with their needs according to their level of expertise and familiarity. 

Here’s another example of utility naming for SaaS provider Publica, which provides a publishing platform backed by blockchain technology. Any user can visit this page and self-select what’s best for them--from individual authors to publishers: 

naming your saas pricing plans - publica saas pricing example

2. Utility naming

The second strategy we use to name SaaS pricing plans is through the ‘job to be done,' or use cases of your software products. Utility naming allows buyers to pick the package that delivers the functionality needed from your software. 

However, your users may not know what ‘job’ they need your software to perform, leaving some room for confusion. This is when other SaaS pricing page best practices, such as FAQs, features, and additional resources, can guide your users toward the best plans for them. 

Below is an example of utility naming from SaaS provider SharpSpring, who quite literally names each pricing plan available by contact storage volume users may need: 

saas pricing plan names - utility naming

Here’s another example of utility-centered SaaS pricing names from Baremetrics who provides a metrics and engagement platform for subscription and SaaS businesses:

saas naming pricing plans - bare metrics example

While each offering starts with ‘Metrics,’ they also include ‘Recover,’ ‘Cancellation Insights,’ and ‘Everything’ as modifiers to their baseline pricing plans to communicate the additional capabilities and functionality. 

3. Get to safety

Lastly, you can name SaaS pricing plans to align with Maslow’s hierarchy of needs--providing refuge, relief, and safety. Again, the goal is to provide safety from the challenges and obstacles your prospects experience.

You can then take this one step further by emphasizing your ‘hero’ pricing option (rather than your decoy or anchor) and pull prospects there in return for the most security and peace of mind. 

This works because your pricing tiers combine traditional business benefits with personal benefits that matter to the individual decision-maker. This may include:

  • Tools that help them get excited about learning something new
  • Hedging risk
  • Reducing anxiety in the purchase decision
  • Being seen as the ‘hero’ by their peers who made the best decision

The example from the last century often used is “you will not get fired over buying IBM.” That was playing solely on the psyche of the buyer regarding this last point.

SaaS pricing names don’t have to be boring

How you name your pricing plans should tie back into how you speak to your customer. If the titles don’t align with the language your ideal customer profile expects to see within your industry, you may end up confusing and turning away your audience.  

The bottom line: pick SaaS pricing plan names that communicate your product’s value and benefits to your customers, so they feel they’ve selected the right package for their needs. 

Next steps

Interactive tool

T2D3's feature-based pricing tool

Simulate a feature-based pricing model for your product. Organize services, capabilities, & product features into a working draft of your pricing package.

TRY THE TOOL

 

Related VIDEO

SaaS North 2021 breakout: Your pricing is always on

Stijn's full breakout session on pricing from the November 2021 SaaS North conference covering B2B SaaS pricing strategies, philosophies & a tool for optimizing your pricing.

WATCH SESSION

 

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