Hi community!
I’m currently in incubation with my startup and I’m figuring out the prices for my clients. The app will be hosting their details like address, some text fields and photos. They will be able to create teams and manage them. The app will also have Guides (kind of like recipes), and a few other sections, the heaviest of all a Marketplace for sustainable products and services. I know it’s a lot! Please skip the advice of keeping these products separate for now; I’m aiming at a superapp.
I’ve worked with ChatGpt and it’s estimations are that up to:
- 100 users I can use the $119 plan
- 500 users the $349 plan
- 1000 users a $1000 plan
- 2500 users $1500 plan
- 5000 users $2500 plan
To keep the concept simple for now, and for incubation purposes, I’d like to figure out the prices I should offer. My first thought was: 5€ (more or less $5.4) I’d like your advice to see:
- if you think this is really feasible
- what other costs would you consider
Thank you so much!
Hi @ohadloffler,
Pricing is difficult because you’re making assumptions about the level of value users are getting from your product with little to no information.
If you’ve got B2B customers a good method is to approach them one-by-one. It goes something like this:
- Take a guess at the $ value that you think your current product is providing.
- Pick a starting price of 10-20% of that value (e.g. if you think it is giving them $100 of value start with an initial price of $10-20.)
- Setup a call with your first client - propose this price (and use the call to get feedback from them, which is also really important).
- If they like the price - great! Setup a call with your next client and give them a price that is 5% higher than the first (e.g. if client #1 got a $10 price, client #2 should get $15).
- If they think the price is too high, then you need to go back to the drawing board, but worse case scenario you have potentially only annoyed one client and hopefully they will have told you why they don’t think the product is worth that price so you can improve it.
- Repeat until you hear ‘no’ a few times (this is uncomfortable but necessary). This tells you that you’ve hit (or are slightly above) the sweet spot where your prices are matching the percieved value of the product.
What you don’t want to do is send an email to all of your clients with a price that you’ve guessed - unless you are very confident it is correct. It’s highly likely this will either be too high (in which case you possibly lose them) or too low (in which case you’re leaving money on the table).
Communicating with them one-by-one reduces the risk that you will have a pricing disaster (see bubble pricing a few years ago 
) and means that the price that you finally go public with is based on something realistic.
3 Likes
Sounds very practical and reasonable! Thank you so much for the advice.
I’d also like to know if you think that bubble can actually handle the amount of users mentioned, and if this case I should be considering extra costs (perhaps due to spikes of workload or so). What do you think?
There are lots of businesses running big workloads on bubble - I think the key is to build it in a scalable way from the start.
In terms of pricing I wouldn’t think too much about your costs when trying to pin down the price to the customers.
If you put yourself in the shoes of your customers, they don’t care what your costs are. They’ll only pay you what they think it’s worth to them.
Once you have a sense of the price they would pay, then you can work out if you could make the business profitable based on your estimated costs.
2 Likes
Well, then let me put it differently - according to research, users are willing to pay about 5-8€ for an app subscription monthly. Within this sweetspot, do you think you can actually run a business? Or do costs tend to be so high that these businesses tend to fail?
Pricing for a SaaS app needs to consider several factors.
One critical factor to consider is - what will it cost you to acquire a customer? Usually abbreviated to CAC (Customer Acquisition Cost), this number will influence the price point you will need to charge in order to make a profit.
Let’s say that you are aiming at a B2B audience and the cost to advertise, create a lead funnel, follow up and close one customer is $50.
Next, figure out how long will a customer subscribe before they churn? Let’s say that an average customer stays with you for 15 months, resulting in a revenue of $75 at a price point of $5. This $75 is your LTV (Life Time Value).
Subtract CAC from LTV and your margin per acquired customer is $25 on average, using the numbers in this example.
If research suggests that customers are willing to pay $5 to $8, you will need to spend more than that to acquire each customer and as long as they stay long enough where each customer’s LTV > CAC by a large enough margin, the business will turn a profit.
Hope this makes sense.
1 Like
Hi! Thank you very much for the detailed answer. I’ve been working on the funnel with TOFU MOFU BOFU framework in my incubation and it’s of course a major cost.
My question is actually more basic, say marketing isn’t involved, and it’s purely technical costs that we are considering, can a 5 - 8€ subscription fee actually finance an app?
Thanks in advance
This is a cost calculator. I don’t know how accurate it is, but could be useful for those reviewing this thread.
Kind regards and thanks for all the help until now.
1 Like
