Why a simple pricing is important?

| |

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

Payment Term, Simplified : All You Need To Know About Net D

Life would be a lot easier if you can invoice your customers now and let them pay later. Read More >

Nearly Everything about New Zealand Tax changes for your Digital Business

Selling your product/service in New Zealand? Peeved by their tax changes? Here's everything you need to know about New Zealand tax changes, and how Chargebee can help Read More >

SaaS Product Marketing with Content
How 4 Top SaaS Companies Use Content to Strengthen Their Product Marketing

Content’s true role in product marketing elicits quizzical looks. Here’s a deep dive into the work of its best practitioners. Hop in. Read More >

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