Why a simple pricing is important?

| Last Updated: June 09, 2015 |

Reading time: 3 minutes

Keep it simple

If your subscription business is considering a move to a more-complex pricing structure, it’s wise to stop and pay attention to the experience of other brands. Many companies have abandoned what technology evangelist Ben Kepes refers to as a “KISS” pricing model (keep it simple, stupid), in order to try to “be everything to everyone.”

Your small business may thrive creating unique packages for your users, but that pricing model simply isn’t scalable. Research by industry experts indicates that more-complex pricing packages aren’t necessarily a selling point, and may even be overwhelming your leads. Read on to discover why time and time again, the most successful SaaS providers are discovering that simple pricing is essential:

1. It Improves Conversions

Research indicates that you may have as little as 10 seconds to make an impression on your prospects before they leave your webpage. If your pricing structure page looks more like a complicated table of data than something that makes sense to your prospects, your conversion rate could be a fraction of its potential.

Kepes points out that SaaSu briefly moved to a complicated pricing model in 2008, but quickly switched to a simpler solution after receiving negative feedback from their fans and customers. Nearly 5 years later, they’ve maintained a clean and easy-to-read plan for pricing that includes 4 options for potential customers.

saasu pricing

2. It Builds Instant Trust

A number of industries have moved towards less-honest pricing structures, and even if the prices listed on the website seem simple, they’re often far different than what you ultimately owe. Airlines in particular have moved towards pricing that includes last-minute ancillary fees for checked luggage, head phones, snacks and any number of other services.

A simple pricing structure will appeal to consumers, and emphasize the honesty of your company. Social monitoring subscription business 

Trackur does an excellent job of presenting all the details of their pricing without sacrificing a clean and easy-to-read layout.

Trackur Pricing

3. Less is Almost Always More

Even if you think that your simple pricing structure of 5 plans fits Kepes ‘ KISS philosophy well, it still might not be simple enough for today’s busy and distracted consumers. The only way to tell for sure is A/B testing different layouts of your pricing.

RingCentral, who have a clean and easy-to-read pricing page discovered that reducing their options from 4 to 3 improved their overall conversion rate by 37%.

Ring Central Pricing

4. Make it Look Simple Even if It Isn’t

Just because your pricing model is simple, it doesn’t mean that you can’t impress your prospects with a complex design that allows them to feel like they’re customizing their own package.

Heroku has achieved a simple design for a pricing structure that’s inherently complex by introducing an element of gamification into their web page. If your subscription business inherently requires customized packages, take a note from Heroku by introducing an element of play and clean design to give the impression of KISS-inspired pricing packages.

Heroku Pricing

Even if your product is designed for some of the most math-minded professionals on the planet, they shouldn’t feel like they’re solving a complex equation when they hit your landing page. Not only is the “be everything to everyone” approach hard on your business, it’s overwhelming to your prospects. Keep it simple, and test continually to ensure you’ve hit on the right design.

Author of the post

John Solomon

Marketing Leader / Sales Enabler. Head of India Operations for @Infrascale / @sosonlinebackup.

Hear from a team of curious beings
A team that’s bent on delivering the best stories, lessons, and observations on SaaS, straight into your inbox. Every week.
SaaS Dispatch Team

Subscription Billing Made Easy

Try for free

Recent Blog Posts

SaaS Growth and Recurring Billing
Unhacking SaaS growth and rethinking recurring billing's role in it

Behind the question of whether a billing system can help your SaaS business grow is the question of what it means for a SaaS business to grow. This guide tackles both — it creates a model you can use to approach SaaS growth and a 360-degree view of how your billing system fits into it. Read More >

Scaling SaaS Billing
Scaling SaaS Billing: How To Plan For The Insanity

Scaling your SaaS billing system can be complex. Here's the guide to making sure your subscriptions don't suffer for it. Read More >

Purpose Driven Friction
Friction Isn't Always the Bad Guy in User Experience

How friction improves UX in SaaS, how it helped Chargebee's onboarding and activation flows, and the right way to handle positive, purpose-driven friction. Read More >

Subscription billing software that lets startups deliver recurring happiness to customers.
How Chargebee Works