Good, Better, Broken: Why Most SaaS Pricing Fails SaaS Pricing Tiers Are a Trap—Here’s How to Fix Them

In this episode of the Street Pricing Podcast, Marcos Rivera discusses the popular pricing model of good, better, best, particularly in the SaaS industry. He emphasizes the importance of understanding your total addressable market (TAM) and the common mistakes companies make when implementing this pricing strategy. Rivera provides insights on how to effectively structure pricing tiers, avoid overstuffing entry-level plans, and the significance of add-ons. He concludes with a guide to five key principles for successful pricing strategies.

 

TAKEAWAYS

• Good, better, best is a popular pricing model in SaaS.
• Understanding your total addressable market (TAM) is crucial.
• Avoid overstuffing your entry-level plan with features.
• Add-ons can help create stair steps for customers.
• Focus on solving the first few jobs in the customer journey.
• Keep pricing tiers simple and clear.
• Aim for two to four pricing tiers for effectiveness.
• Differentiate plans with clear value propositions.
• Charge significantly more for the best plan.
• Regularly review and adjust your pricing strategy.

 

CHAPTERS

00:00 Introduction to Good, Better, Best Pricing

06:10 Common Mistakes in Pricing Models

12:10 The Guide to Five: Key Principles for Pricing

 

RESOURCES:

Marcos Rivera LinkedIn  https://www.linkedin.com/in/marcoslrivera/

Marcos Rivera X  https://x.com/PRICINGIO

Pricing I/O  https://www.pricingio.com/
Street Pricing Book:  https://www.amazon.com/Street-Pricing-Playlist-Leaders-SaaS/dp/1737528010
Want more information?:  [e-mail]

 

The Street Pricing Podcast

Welcome to Street Pricing, the only show where proven SaaS (Software as a Service) leaders share their mindset and mistakes in pricing so we can all stop guessing and start growing. Street Pricing is hosted by Pricing I/O CEO and Pricing Coach, Marcos Rivera, sought after slayer of bad pricing. With 20 years of pricing expertise, he has helped price over 200 SaaS products and coached over 100 SaaS CEOs and counting! From the streets of the Bronx to CEO, Marcos wants to take the guesswork out of pricing.