Newsletter · long read

Pricing your SaaS product

Patrick Campbell with Lenny Rachitsky · Lenny's Newsletter Freemium Beginner

Campbell ran pricing research at ProfitWell across thousands of companies, and his sequence (value metric, then segments, then experiments) is the one to follow. The line worth memorising: get the value metric right and you can get a lot of the rest wrong.

• Companies priced on a value metric grow at double the rate with half the churn and 2x expansion revenue.
• Do not discount past 20 percent: bigger discounts convert but correlate strongly with churn.
• Revenue per customer is about 30 percent higher just from showing the buyer's own currency symbol.
• Case studies lift willingness to pay 10 to 15 percent; freemium usually works best 2 to 3 years in, not at launch.