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I am creating a very high end B2B SaaS, subscription based, online product. The person doing my information architecture and I have very differing views on the subject of when pricing tiers should be introduced. Before you answer or fully form your opinion, please consider the following:

-There will be a FREE version with limited features that will still be highly useful and valubable to many of the subscribers which they can use for an infinite period of time without giving my company any payment information whatsoever.

-Everyone will get a trial period of an undecided period of time (30-90 days) where they get to enjoy all of the features for FREE before being downgraded to the base FREE level. If they decide they do not even want to continue with the FREE services and think there is a better solution they would prefer to use, they can easily export all the data they have, so there is no risk involved whatsoever. Everyone starts off with this type of account. I will not be selling anything when they sign up or taking any payment information until a certain point just before their free trial expires.

-The service is extremely unique but contains a feature set that solves many of the challenges my market experiencs but in way that has never been done before by leveraging technology. (I wish I could be more specific, but I think and hope many of you can understand why I cannot on here at this point.)

-Considering the uniqueness of the solution, there really is not a way to adequately describe it well, without being people trying to draw their own conclusion as to exactly what they it is, what it does and how much easier it will make their job. The only real way for people with-in my market to fully grasp the power of it is to use it...hence the free, truly no risk offer.

The dilema and point of disagreement is whether we list pricing grid, tiers and feature sets before the user even signs up for the free account and uses it or is it acceptable to make it available to them immediately upon being welcomed as a new Free Member once they have signed up?

FYI, they will be told before signing up, as a free member, that full access to functionality is for a limited time after which they will need to upgrade their account in order to continue enjoying all of the features. That part would NOT be just sprung upon them.

I am arguing that it is best to wait until the user accepts the free acount with full functionality to introduce pricing options. My fear is that if a potential user just sees a high price without throughly understanding what they are getting they may never find out and just leave. They really need to try it to understand and fully appreciate it. A grid chart with feature sets (and/or video) with price points just cannot do it justice.

I equate it to a satellite radio subscriptions. When I bought my car, it was there as a free offer...I did not even have to sign up for the 90 day trial. It was very clear the trial was only for 90 days and then I would have to pay something to retain it. I did not know the price until after I was already enjoying it and became a subscriber. Absent having that experience first, I may have thought I did not need it and a radio or i-pod would be just fine. Only by experiencing it did I realize how enjoyable it was and that it really was something I wanted. I would have written it off prior to that and not even given it a chance without the free offer.

My Information Architect/User Experience professional argues that he would just leave if he did not know the "end game" before he became a Free Member. He has provided me with countless examples of other businesses who do have specific pricing information clearly available before people sign up, even a free account.

I contend that those products are easier to understand because they are not the first one of their kind and/or they are not as involved of an offering.

Please weigh in on this debate. I would really appreciate your input.

Thank you, in advance.

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5 Answers

up vote 8 down vote

Great question. In my experience being upfront with pricing is always better, both on low-end and high-end products, even with 6- or 7-figure enterprise deals.

Here's a detailed argument for why.

The outline is:

  1. It makes price "negotiation" trivial (you don't negotiate)
  2. It's honest, which help the relationship
  3. It's consistent with a confident market-leading product. Leaders have nothing to hide.
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up vote 6 down vote

Not making pricing information available is usually a tactic of very high end products. This is usually for one of the following reasons:

1) Pricing is so complicated, that it's hard to describe.

2) Most deals involve some human negotiation.

Generally, I favor having clear, simple, transparent pricing. Even in B2B markets, this is become expected of buyers. If you have strong competition, the thing I'd worry about is whether the lack of transparent pricing will send potential customers to someone else even before you have the opportunity to sell them.

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up vote 4 down vote

I have a very different product but it's a web-based application for consumers. We just did some new user testing. We have a 60 day free trial.

People absolutely wanted to know what the pricing was before signing up for the free trial. In fact it was so compelling that we're making changes to our free sign up user flow. They did not want to spend time learning and using and getting involved with a product, even if it was free, if they didn't like the pricing once they'd have to pay for it. (Assuming they ever did.) Why bother if I know I won't be a paying customer?

I think the difference with your car and satellite radio example is that there's no investment on your part. You listen to the satellite radio and you either like or don't like it. If you don't, no harm, no foul. You walk away. You didn't spend time learning it, using your data, anything else.

Hope that helps.

Best,

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Thank you so much for this valuable insight. It will be interesting to see if there are others that disagree. 2 Questions for you if you happen to see this again: 1.) There may be a MAJOR difference. Is there any part of your site that users can still use get value out of for free after the 60 days end? Mine has a significant amount of value that is free and might justify the time spent learning and getting involved. 2.) Since my project is B2B and yours for consumers and appears to already be up and running....may I check it out personally? Thanks again, Chris..great stuff! – David Feb 6 '10 at 4:26
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In my opinion, doesn't matter how much they do or don't get for free. It's still a time and effort investment with a potential that they'll move to the paying level. So it doesn't change my recommendation. Sure, my website is pagemage.com Caveat - launching a big redesign and significantly altered site and user flows in a month. Including putting basic pricing information on the registration page. But the point is the same. Best of luck to you, – Chris Feb 6 '10 at 14:22
up vote 4 down vote

What are you trying to hide?

At the risk of jumping to conclusions, just the tone of your post to me give the impression that you might be a person that naturally tends to be secretive. Are you sure you are not trying to hide info just to hide info? Remember we live in the age where information wants to be free.

Word is going to get out about your price eventually anyway.

Also, it sounds like you are not putting yourself in the shoes of your customer. Would you decide to invest your time on something that you have not idea how much will cost you?

Another thing: If there is market for your idea, as soon as people see it, you will have competitors. In pretty much any market, where there can be one player, there can for sure be two, and most possibly more.

What will you do when a competitor comes along and does everything you are not doing right now? The very first thing your competitor would do is charge half what you are charging (or less) and, of course, import the data dumps you say your customers will be able to do.

Anyway my point is that hiding critical information will get you nowhere. It will not just open doors to, but invite competitors. If I were you, I would milk the "first player in the market" position, but not for money, but for those free accounts. And lose that "export your data freely" functionality (or at least your highlighting it). Do it upon request only. Unless your market is very unique and data exports are the first thing your customers look for, there is no expectation (yet) of being able to get your data out of a site. Unless it's an actual selling point for your market, there's no need to highlight that your customers can jump ship freely.

Start competing tooth and nail before the competitors come. Why are you afraid of your prices (you were the one that mentioned the word "fear")? Maybe you don't want to disclose them because they are not right? Get them right. Set up a structure that you have full confidence is compelling to your customers. If you think your customers will go running for the hills once they see the prices, then something's wrong with your prices.

And I agree completely with Chris: The satellite radio comparison is not correct because you are assuming your customers' time and effort is free. I'm sure your customers value their own time. Sometimes free is not cheap enough.

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up vote 3 down vote

Consumer targeted SaaS and Small Medium Business targeted SaaS list prices on the web and signing up for trials and demos are rather easy. Customers sign on through the web.

For higher end SaaS, some of the customers will come in through the web but you will also have to sell to customers off the web, through appointments with live presentations and demos. At the presentations and demos that is when the customer will want to know prices.

I've noticed that higher priced SaaS platforms targeting larger business do not list their prices on the web. Also, to be able to do a trial or demo of the product, these sellers require a questionnaire to be answered first. I think the questionnaire works as a filter to deter non serious trials. The reason high end products do not list prices on the web is this type of pricing is not always set. This type of pricing is subjective depending on various circumstances.

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