How to leverage fake discounts
Plus: A framework to help identify add-ons.
SaaS Pricing is hard. PricingSaaS is your cheat code.
Monitor competitors, track real-time benchmarks, discover new strategies, and more.
Pricing Trend 🔮
I’ve recently been using a tool called PricingSaaS, and highly recommend it if you’re a SaaS Pricing operator.
PricingSaaS hosts a database of 3k+ SaaS companies, organized by a range of variables, and tracks changes to their pricing page. Over the past week, one trend that sticks out is the “fake discount.”
Essentially, this entails a company raising their pricing, but discounting back to the original price. Here’s an example:
This tactic is all about buyer psychology. In this economic environment, I think it plays! At the very least, pricing page tests like this are worthwhile to see if there’s a meaningful impact on conversion.
To check out other trends, you can check out PricingSaaS for free here.
Pricing Tactic 💡
Ryan Glushkoff is the Founder of Fraction8, a pricing and product marketing advisory firm, one of my favorite LinkedIn follows, and a member of the Good Better Best Community 👀
I loved a recent post where he shared his framework for identifying add-ons. Ryan lists three steps to identify an add-on candidate:
List our your major features
Pull together usage data for each of those features (trailing 6 months)
If less than 40% of users are using a feature, it’s an add-on candidate
Further, he says add-ons should:
Be differentiated from the main product
Have a standalone value proposition
Show evidence of standalone willingness to pay
Have a well-defined minority target market within broader TAM
Be expensive to bundle into the core product
Have a clear path for low friction activation
This all rings true with my experience. At ProfitWell, our simple definition for an add-on was a feature with low relative value and high willingness to pay.
For more pricing and product marketing insights, follow Ryan on LinkedIn.
Pricing Strategy 🤔
This week, a member from the GBB community asked the following:
Anyone have tips on adjusting (or not adjusting) your primary value metric after acquiring other companies?
The question created quite a stir and currently has 10 comments. To get in on the action, sign up here. If you have thoughts feedback, drop them in the comments!