Why Price Transparency is Critical for SaaS Products
I recently had a pretty frustrating experience with a Saas (Software as a service) product I love which really hammers home the importance of price transparency.
I live my life off of Trello (includes a referral link) to organize everything, whether it is task lists for work, or even tracking movies I want to watch. Sometimes Trello doesn’t cut it for me however. Tom Favaloro, one of the best Product Managers I’ve had the chance to work with, introduced me to Airtable (also a referral link).
The main difference between Airtable and Trello is that while Trello has a kanban card based foundation, Airtable's core is an excel like data entry table that can be manipulated into different views.
The main reason I’ve used Airtable for different projects is because of its ability to visualize links from one field of data to another, and to tie changes to one record to others. A great example of needing to do this could be searching for a property to purchase. You could have a sheet of different properties, and another of different owners. Each property could have more than one owner, and each owner could have more than one property, but Airtable makes it extremely easy to track changes and notes across the two.
The big challenge for SaaS providers like Airtable and Trello is that they offer an incredibly awesome free product, and then need to figure out ways to monetize that product and convert free users into paid. The key here is doing this without blindsiding users.
Trello and Airtable have both built out add ons, power ups (as trello calls them), or blocks / apps (as airtable calls them) that gives users exposure to how cool the functionality is in an attempt to get users hooked and reliant on those features. Airtable gives you a free trial period, and Trello has taken the approach of giving you one free power up per board, requiring an upgrade if you want to use more.
However I recently had a terrible experience running into Airtable’s paywall.
While I expected to be limited by not being able to use any blocks as a free user, I recently found out that by adding too many pieces of data or rows to my database, eventually there is a limit that can only be surpassed by paying.
Now I have no issue with paying for a product that has proven to be incredibly valuable in my professional and personal life, however here I believe pricing transparency was a big issue that as a user gave me an incredible amount of pause in wanting to continue to use this product.
I had no idea that the amount of rows I was adding to this more and more complex database would at some point be capped. One day I was going along happily adding rows, the next I got a big red warning at the top that said pay up or get out!
The biggest concern for me as a user is that I had absolutely no idea this was coming. It was clear to me that when I was exploring the Airtable powerups called blocks or apps, that they wouldn’t be included in the free version. When adding an app to airtable, they ask you to upgrade at the point of the addition.
But because of this unseen ambush around data limits, I now question how many other functionality limitations will I stumble across that would inhibit me from moving forward with my project.
This brings up the key point here;
The more clarity you provide between what is free and what is paid in your freemium SaaS product, the better.
Many folks try to hide their pricing, not even including a pricing tab on their landing page and hiding it deep down in their FAQs forcing customers to sign up for a free trial instead of understanding the costs first.
Similifi seems to use this approach, where it took me a good 5 minutes to poke around and really understand how much their product costs.
As Google makes changes to their pricing model of many of their products like Google Photos, they seem to be doing a pretty good job of setting expectations with users, and also providing progress updates as people utilize more of their limits.
Trackers, progress bars, and percentages are clear ways to inform customers and clearly set expectations. Sending one email about a pricing change generally isn’t enough. Sometimes a set it and forget it approach will lead to turbulence down the road.
The days of tricking the customer and hiding pricing until the very last moment are over. By putting pricing up front and being as transparent as possible, SaaS providers can clear the clutter and drive to a more clear value proposition with their users.
About the Author
Ben Staples has over 7 years of Product Management and Product Marketing eCommerce experience. He is currently employed at Nordstrom as a Senior Product Manager responsible for their product pages on Nordstrom.com. Previously, Ben was a Senior Product Manager for Trunk Club responsible for their iOS and Android apps. Ben started his Product career as a Product Manager for Vistaprint where he was responsible for their cart and checkout experiences. Before leaving Vistaprint, Ben founded the Vistaprint Product Management guild with over 40 members. Learn more at www.Ben-Staples.com
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