Comment by mikhaill | Hacker News Reader

Comment by mikhaill | Hacker News Reader

A few years ago I attended a SaaS pricing discussion and two of the key insights that emerged were:

* For companies that gated based on usage, free/trial users were much more likely to make the transition to a paying customer. For companies that gated on features, free users tried to find all kind of ways to get things done without paying for the additional functionality.

* In the early days of many companies, most of the features of the product were given away for free, with just a a handful of features gated into premium plans. As companies grew, they realized that many of the features they should have gated, were now free, leaving little incentive for the users to convert.

Hopefully this helps someone.

Thank you for sharing, I think those insights are correct.

We have currently a few features where it's painfully obvious how to cheat the system to gain higher-tier functions. I wont change that, because if you're that strapped for cash that you'd rather cheat than pay 20€, I'm going to look the other way and hope that things change for the better for that person.

lbj, I agree. In my current SaaS app, I have a few customers that consistently try to take advantage of the billing grace behavior to save peanuts by canceling/re-subscribing/canceling/re-subscribing to try to fool billing system. Much as you, I've learned to let that go and hope for a change in behavior in the future.

To try to combat this issue in another app[1] I'm involved in the pricing packages are tiered at 5 SKUs / 200 SKU / Unlimited SKUs. As the customer grow, the driving function of plan upgrades is the volume of SKUs they work with. They also get extra features to better support operating at the higher volume. You don't get high volume features with the 5 SKU plan... We'll see how this approach shakes out.

[1] https://fnskustudio.com/pricing

Very glad to hear that I'm not alone in this line of thought.

Keep us posted on your SKU success. I wont pretend to be a wizard in the area, learning as I go along so stories from other ventures are a big inspiration.

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