In this month’s report, we look at 4 noteworthy SaaS pricing topics that stood out in our research in the last month
Nov. 22, 2022
Authors: Bryan Belanger, Colin Naples
Generative AI can help usher in the era of ‘do it for you’ SaaS, and monetization models should follow suit
Generative AI, in concept, is a key category that will enable “do it for you” in SaaS. Generative AI refers here to platforms that create new data and content, versus simply taking actions based on data inputs. Current ecosystems in generative AI include text, video, image, code, 3D and speech. As platforms mature and new ecosystems emerge, generative AI will grow as a stand-alone category, and generative AI tools will be embedded into existing software to help solve customer problems.
We believe “do it for you” SaaS will transform monetization models, and so generative AI bears watching, given its potential to transform “do it for you” SaaS.
3 more noteworthy SaaS pricing topics that stood out in our research throughout October 2022
Increased focus on high-ACV deals for PLG SaaS companies
When many think of product-led growth (PLG), they think of freemium acquisition models, low-cost single-user plans and product virality. But we have seen an increasing interest in how to pair PLG motions with enterprise sales to pursue high-ACV (annual contract value) deals. It is a tale as old as time: companies serving enterprises are aiming to come downmarket, and those serving individuals and SMBs are aiming to move upmarket.
Pricing blunders take center stage for the biggest names in tech
You may have heard that Elon Musk took over Twitter. Soon after, the Twitter team rolled out plans for an $8 per user, per month verification service, which was met with a lot of discussion and backlash. Though more quietly, Airbnb CEO Brian Chesky announced plans to adapt pricing for Airbnb in response to significant customer complaints. These two tales collectively provide tips on how not to approach pricing.
Reverse trials are gaining traction as the most important top-of-funnel GTM offer in B2B SaaS
A reverse trial combines a freemium and free trial motion into a single go-to-market (GTM) flow. In a reverse trial, a customer is typically enrolled into a fully featured free trial for a period, and then given an option to upgrade to maintain access. If the customer chooses to downgrade, they are downgraded to a free plan (versus churned out). This is becoming a best practice model for leading SaaS companies.
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