How to create and make money on SaaS | Part 14 | Flip-flops with prices

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And yes, I continue my series of exclusively practical posts about SaaS. While the team’s engineers are completing the assembly and testing of a rather niche startup, DentalCloud will allow myself, within the framework of the NPD (new product development), to discuss how we approached questions a) pricing b) methods for creating tariff plans for the service. We will announce DC later, well, and whether I just need to announce it to a respected audience Habrahabr, I don’t even know.


Pricing Classic in SaaS Pricing


In setting prices for SaaS, there is a very good approach in transition. In the "classical" migration scheme, we just take the "box" and divide its cost by a) 3 years without the client buying hardware for software. b) 5 years with iron. An example of such a detailed case was published by cloud expert Mikhail Kozlov for the company's unified communications system . We did not have “boxes” - that is, there was no continuity of “license - service” and we had to set prices using other methods and there were nuances.

Somersaults with prices / what we did to form prices

We looked at the market itself and the audience;
We looked at competitors;
We thought about the values ​​and problems that the functionality of the service for customers solves;
We looked at the ceiling and decided not to use this method (“prices from the ceiling”).

a) The dentistry automation market turned out to be very narrow - in total in Russia there are 7,000 surgeries and clinics and 80,000 dentists. Market rotation (new offices) 10-15% per annum. There is a tendency to reduce small rooms and “overflow” of doctors to clinics. The service audience itself is more than solvent. We see as our potential clients small offices and those who are planning business development.
b) The average niche check is higher than the average SaaS check as a whole, but we made it 2 times larger. At the same time, they decided not to make freemium and hold promotions in the first six months, which will help to be approximately equal in value with competitors. This is a logical step - stocks can be started and completed, modified and adapted to the current development situation. that is, stock in our strategy is a tool for regulating price elasticity.
c) In DentalCloud, we made the right emphasis on the treatment process - this is our USP (unique selling proposition). Everything is built precisely not around tooth treatment, in the context of a rather detailed treatment map and qualitatively from the point of view of UX. that is, our service is not about management, but about making the doctor’s work more comfortable. Plus we give a rather strong doctor-patient communication functionality, which is valuable for a CRM clinic.
d) This is such a joke.

What we did not do when setting prices

We did not look at the average SaaS check, which is about 500 rubles per month per workplace in all automation segments - I believe that all vendors are cheaper than the value of their solutions.
We did not ask the opinion of potential users. Perhaps this is a mistake, but we will definitely check it later.
Also, we did not look at Western competitors - they simply were not visible on the Russian market in the segment and we did not evaluate cases on saving and increasing economic indicators from the service. The latter is very interesting and has to be done with future customers. As a result, we received a check for a license 2 times higher than the cost of Russian competitors and the cost of a minimum tariff of 3,500 rubles.

It is important that we refused the free distribution of the service. The refusal from freemium was caused by the team not understanding what to put into its functionality - the doctor just doesn’t need a notebook, and giving the treatment process to freemium is not quite logical. But we did not stop thinking about user scripts with possibly free functionality due to the fact that we are new and it will be difficult for us to play in a busy niche.


To be honest, SaaS is wonderful from the point of view of misunderstanding how it should be right. Correct from the point of view of licensing and / or providing services without them ( I already wrote about this) That is, there is a situation in the market that there are several options for distributing SaaS - licenses and services without them, but with telematics and SLA licenses for access. Those. hypothetical, the price of the tariff for the end user is not equal to the cost of the software license - the SLA service, several licenses, training, anything, or vice versa may not stick to the price, and there may be no license, or there may be a tariff for closed vendor considerations! That's it. We are in DentalCloudnot an exception to the uniqueness of the approach to how to distribute software, and here's why. We have an interesting licensing structure (yes, I am a supporter of licensing). There are 2 functional modules “Administrator” and “Doctor” (“Administrator”, not the one that gives access rights, but the one who manages the clinic). At the same time, we needed to make 2 price offers for small offices and clinics, subject to the same functionality (we want to earn more at the clinics). The solution to the problem was this: we introduced the third “Collaboration” license and included it in the tariff for clinics, thereby increasing the cost of the tariff (but not the license, which is important) and formed the service on the basis of licenses and with our own tariffs.

As a result

- we offer the user tariffs based on a combination of licenses - the Cabinet (with one Doctor’s license and one Administrator’s license) and the Clinic (with N Administrator’s licenses, N Doctor’s licenses, N Licenses);
- in fact, the tariffs are equally functional, but differ in the total cost due to the inclusion of licenses for joint work of doctors in the tariff of the Clinic;
- we still provide a service and refused to be exempted from VAT, but not a service without telematics and guarantee of access by our skills - we simply provide a service, in fact, transferring a login-password pair without guarantees of access (lack of a telematics license);
- made 2 different offers to different segments of potential customers and were able to maintain continuity to software - licenses
- we can always apply for exemption from VAT;
- Profit!

Like others / Opinions of experts

Dmitry Chistov CEO Сopiny , business angel

When we were at Copiny, the price of products was primarily focused not on competitors, but on the value that we
create for customers. If we save 300,000 rubles a month on support, then why not take 10-20% of this amount? Our foreign colleagues do the same, only their prices are 5-10 times higher.

In another Teamdesk project , where I am an investor, the price was set based on existing helpdesk systems in the Russian market, taking into account our positioning. Here we are rigidly attached to
competitors' prices and customer expectations. In any case, there is no ideal price - you need to test different approaches and adjust your pricing to the current situation.

Vyachelav Davidenko CEO Witget , business angel

The issue of pricing is very important both for us and for customers, so at the very beginning of the work on widgets it was decided that our business would be with a human face. That is - so that people can first evaluate what they are offered, and only then pay. And pay in the amount that is suitable for a particular client. So, we have a free version, a test one. That is, a person does not buy a pig in a poke. We were guided by the fact that it makes sense for a person who has one site and who needs one widget to offer a minimum tariff. And those who need to use many different widgets, and, on several sites, keep track of detailed statistics and get the advice of a personal manager, respectively, will have to pay more. In addition, we give you the opportunity to save money by paying in advance. 

As for the specific amounts, we tested hard. The price of the cheapest tariff was 500 rubles, and 750 rubles. and 1,000 p. Then we looked at how flexible the market is, how it reacts to price changes. In addition, we tested various discounts for payment for a longer period of 3, 6, 9 and 12 months. And, again, we experimented with discounts from 30% to 70%. By the method of experiment they came to what they came to!

Katerina Kosterova CEO Terrasoft

Regarding the sale of SaaS - definitely, we sell as licenses. The main reason is precisely in the legal plane.

As for prices - we have two guidelines - Western competitors and customer willingness. Balancing between these two indicators. In addition, each product has packages targeted at different market segments. For example, bpm'online sales has a team package focused on small companies and an enterprise package for large businesses. The difference in price is 3 times. But the consumer segment is very different!

Askar Rakhimberdiev CEO MoySklad

In MoySklad there is no concept of a license. We provide a service, not sell licenses.
For MyStore, the tariff line has been formed quite simply.

The first factor that limits tariffs from above is alternative solutions, that is, boxed software. A subscription for a year should not cost much more than a license (theoretically, unlimited). Comparing prices, users take the cost of a subscription to a cloud service for a particular year.

The second factor is that each tariff has a cost price. It consists of the work of a support service, hosting, document management costs with a client. It would be a good idea to calculate this figure to see the minimum cost of the tariff, which is still unprofitable for the provider.

The third factor is that it is difficult to make money at too low rates. Therefore, in MyStore, the basic set of features for one user is free. Let these companies grow quietly until they need advanced features or more jobs.

Maria Piterskaya Commercial Director Air.rf

As an economist, I understand that in any process, there are several points that determine the price. Of course, this is the cost of production and a psychologically acceptable price level, that is, the price level in our market segment, and a number of other factors. But as an entrepreneur and commercial director, I tried to include some psychological aspects in the development of the tariff schedule, which would be of great help in deciding on a purchase, because it is in the SaaS service that we do not see our consumer, therefore we can not directly influence his decision. I will not reveal all the secrets, here are just a few of them:
1) the service or product must be worth something. Even free tariffs are made on the basis that one day the client wants to pay for it. The cruel reality is that once you try "freebie" one will make every effort to subsequently continue to use it. At the same time, no one cancels production costs. Therefore, even at a free tariff, we have introduced a “connection cost”. This amount is always equivalent to the first paid tariff. We charge it to the balance sheet, and in case the site traffic grows to the volume of the first paid tariff, we allow it to be used as the first monthly payment. Thus, we compensate for the costs, and the consumer does not have a psychological barrier between "freebie" and "you have to pay for everything."
2) the tariffs themselves are differentiated by the volume of website traffic that the service passes through itself, the volume and quality of technical support and the "grade" of the service itself. Initially, the idea was that the consumer would make decisions based on the "grade". But often, customers do not pay for the service as such, but for the volume of the service provided: for example, 24/7 technical support or the possibility of telephone service.
3) Airi actually has more tariffs than we say on the website, but due to the psychological peculiarity of making a decision on the price, we put only 3 on the price page, and, as you might guess, the most bought of them is average and with extremely high price, solely because of the "maximum acceleration" in the description of tariffs.

Alexey Kalachnikov

Materials series "How to create and make money on SaaS"

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