From the same founder/writer, and mentioned in the article above, Don't Charge $9 a month for Your SaaS - Bannerbear
I wish I could drum this into everyone who starts a B2B product with a $10-ish/month plan
This!
When I was asking for advice from others when starting my current SaaS, I heard so many times “that’s too expensive, nobody will pay this much, you will have to lower your prices”. My prices started at $39/month. These days the business is successful and pricing starts at $49/month (annual billing) and $59/month (monthly billing).
I made the calculations many times, and I don’t think you can run a sustainable SaaS below $20/month ARPU, and $40 what I’d consider a “reasonably safe” starting point if you feel your product doesn’t bring enough value yet.
In today’s app-store-crazed world, where everything is FREE FREE FREE, it’s easy to succumb to downwards pricing pressure. But your customers (especially B2B ones) will see things very differently, so it’s important to set reasonable pricing and stick to it.
Our lowest plan is $10/month. But it’s limited both in features and other options, we try to encourage people to use the next plat that is $20/mo. It’s still profitable to sell $10 plans, but profit margin is lower, and people on cheapest plans tend to have more questions for support.
Exactly — as a solo founder, I try to always have a good idea of the value of one hour of my time. I also do all support, and a quick calculation showed that just a couple of questions PER YEAR from a $10/month customer would make this customer unprofitable. I just didn’t see how I could make this work in my case.
Our lowest plan is $300/month. Most customers either start on higher-tier plans or migrate to higher tiers within the first year. This sort of pricing is not for every B2B SaaS but they should have a law prohibiting anything below $49.99/month.
I have established protocols that I and my support staff follow.
If a customer enters in, I don’t know how to call it… “hyperactive state”, something needs to be done about it. An example: one asks a question. You answer. Then one replies “ok this problem solved and now I have a new question” - this can go on and on. They stop thinking and start writing, a lot. Some prefer to go further, and send a N-page word document with a list of questions! We never open such documents [we tell customers the reason is security, that is partly true, the real truth is than no one wants to answer tens of questions].
Solution 1: We start delaying answers. By 3-7-30 days.
Solution 2: If a delay doesn’t help, we ask them to get a refund, stating that if they can’t use the service without a support ticket every day, this is not a good customer-product fit.
Solution 3: In certain cases, some support tickets are immediately resolved without any feedback.
I don’t believe in the “customer is always right” mantra.
This may sound rude in respect to some customers, but this is for the greater good. We save energy for interesting questions, to discuss feature suggestions with customers, or to help people who really need help.