We've seen a massive influx of Product-Led Growth companies take over the space of SaaS, replacing the more traditional Sales-Led Organizations. Many traditional sales-led organizations are battling their inertia and are now slowly trying to move towards product led growth. One of the most important changes that a traditional organization has to make is to re-haul the pricing - metrics, and the pricing page itself. Most traditional organizations hide their pricing. But the shift to a true product led growth is to enable the customer to know upfront what, how much, and why everything is the way it is - a quick decision enabler.

Here are some key items to consider when transitioning from sales-led to product-led models:

Keep pricing simple

Every buyer checks out the pricing page even before signing up for the freemium or free trial - why bother a free trial for a product which costs 10x your budget? If your pricing page can not quickly give the buyer the birds eye view of pricing within 5-10 seconds, you may miss the conversion. Instead of upping your conversion rates, you'll up your bounce rates.

Keep a simple pricing structure with a Free Plan (limited uses), Basic plan (everything in free +), Advanced plan (everything in basic ++). Let this evolve over a period of time. The Slack pricing page is a good example of this

Incentivize users to upgrade from the free plan

Its call free-mium for a reason folks! If you offer the majority of your product for free, you will have low conversion to paid because your users are not incentivized to pay for the upgrade. But this is easier said than done. Offering a key feature for free will make your customer acquisition engine stronger than ever, but will drain your resources. This is a common problem which does not have a copy-paste solution. Without data (on what works, what are users looking at, what incentivizes them to upgrade), you're shooting an arrow in the dark.

Dont fall into the trap of providing the best features for free. As a user, will you pay to upgrade from free when you have the best service? Will you upgrade from economy class to business class if the only difference between the two is an extra pillow? See Slack features below below, will users go to Pro from Free if they have unlimited integrations, video calls, slack huddles, and unlimited data?

But dont provide so little that makes it easy for users to downgrade

"We give away so much for free that we acquire so many users, but at the same time many paying customers are downgrading to the free plan". Now you're left with a fully functional product which users love but are not willing to pay for since its available for free! The key here is to not over optimize for the paid customers. You can not lock the free users out of features with the hope that they'll convert. You may see a mass exodus. Instead, try to understand:

a) How many customers are always going to remain free users?

b) How many of these will leave forever if some features are behind a paywall?

c) How many more users can you acquire if you keep X feature free?

d) How many of these users will upgrade to the paid plan because of Y & Z features?

Due to changed feature stack, most companies stand to lose upto 20% of their users, and another 20% downgrades to free plans. This is not an exact science, but the Pareto Principle. But, the way we see it- focusing on acquiring more customers to the pyramid will enable companies to experiment. Creating a user acquisition engine will hurt in the short run, but may end up benefiting you in the long run.

Experimenting with the pricing is just to:

a) Let your audience self-segment themselves into users

b) Prioritize your product value and benefits to your target audience