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Deciding on a Pricing Strategy

 •  Filed under By Me, Pricing, SAAS, Products

I've been working on a new idea for a service for the last few weeks and I'm just about ready to take the wraps off it. While the core functionality of the service is happily working, I've been thinking a lot about the pricing strategy for it.


I considered giving a basic level of functionality away for free, but the problem I have with this is that it is difficult to work out just what to include when you give a service away for free. Too much and you end up with more customers sitting pretty on the free service, too little and it's hard to get customers just to sign up. There's also a little bit more work involved in separating the free functionality from the premium functionality in a service. You have to ensure that the free tier of customers can use the application at the same time as paid customers who will have added features available to them.

Given that I prefer this pricing strategy for the services that I use, I found it strange that I didn't sway towards this from the start. When you make a product or a service, you want people to use it and the easiest way to do that is to provide part of it for free. It's certainly not the best strategy for getting lots of sign ups, but it is the easiest.

I hesitated on using a paid strategy to begin with because I wanted people to experience the service first in it's entirety before deciding to pay for it. The only way to do this then is to give people a free trial period of the application in it's entirety. No locked or restricted features, just a window of time to try the whole application before they decide whether it's for them or not.

I'm Going Paid

And that's what I am sticking with. A paid strategy with just a 30 day window to try out the application for free before the customer has to decide whether to subscribe to the service or not. I think it's definitely the best strategy. Committing to a paid service or product means that you are more accountable for the success of it and therefore you are more likely to want to make it succeed.

I've had positive feedback on this already, but the only way to truly see if the service will be a success is by releasing it to the world and that will hopefully happen in the next couple of weeks. Stay tuned!