2. Center Your Pricing Around Your Value Metric
Your value metric is at the heart of the business exchange with your customer. You provide a certain amount of functionality tied to value (like some number of emails, keyword searches, or users) and they pay you in return. With a value-based pricing strategy, the more your customer uses the highest-value part of your product, the more they pay.
You can determine an ideal value metric for your product the same way you determine the rest of your pricing strategy: surveying your customers and collecting data. Once you've found it, you should use it to guide your pricing tier differentiation.
Though each pricing tier can have different features, you should feature your value metric prominently on your pricing page. This is critical for providing a clear path to expansion revenue: every time your customer's usage increases, you have an opportunity to upsell them on a more expensive (and valuable) plan.
SaaS Pricing Page Example: Drift
In an older iteration of their pricing page, live-chat messaging tool Drift featured their value metric front and center on their pricing page. All the information about each plan is hidden below the fold. Even the headline of the page, “Pricing That Scales As You Do,” communicates the advantages of a value-based pricing strategy.
Their value metric is “active contacts,” a conversation-focused metric that revolves around Drift’s key value proposition: streamlined customer communication.
Every potential customer that lands on Drift’s pricing page can easily visualize their journey from their first use of the product with a small number of contacts to significant future usage with thousands:
- Free: The customer is just trying Drift out on their site to get a feel with the first few customers. This no-cost freemium option allows Drift customers to fully understand the value proposition.
- Starter: The customer has started to see some early success with live chat. Their site is getting more traffic and they want to continue offering live-chat, so they upgrade to this affordable tier. Drift has converted an unpaid customer to a paid one -- a huge success in SaaS.
- Business: The customer has scaled significantly, partly due to their use of Drift. As the number of active contacts grows (alongside the value of these communications), so does the amount Drift charges.
- Enterprise: Now the customer has reached their highest level of usage. They're talking to tens of thousands of customers each month. They have a much higher willingness to pay because Drift has repeatedly demonstrated its value.