[tommikaikkonen]

I did my MSc thesis on SaaS pricing pages. I'll share what I found, since I think many people in this thread may find it useful.

I tested how Mechanical Turkers (N=~400) chose plans on pricing pages with 4-tiered subscriptions plans, for both a file sharing service and a payroll software service. Each respondent was randomly assigned to one of 4 conditions, where the presented pricing page was slightly different. The scenario was framed as choosing a SaaS plan for a company they're employed at.

The first variable I varied was plan order. Half the respondents saw a pricing page with plans in increasing price order (cheapest first), the other half in decreasing price order (most expensive first). There was a statistically significant difference between the plan choices for these groups; respondents in the most expensive plan first condition chose a more expensive plan. This phenomenon has been seen before outside SaaS, and it's called the price order effect.

Another variable I tested was exchanging the cheapest ($5) plan for a free plan. Half the respondents saw a free plan, the other half a $5 plan. There was no statistically significant difference in the plan choice for these groups.

Getting familiar with previous literature, I would surface a couple of general thoughts:

- The most expensive plan first approach may give the visitor a more expensive image of the product, a higher "reference price". If a prospective customer is comparing two products from two different companies, they may favor the one that seems cheaper (has a lower "reference price") even if the offerings may provide similar value.

- The hypothesized mechanism for the price order effect is that you don't look at all the options as a whole, but you begin by assessing the first option, which is the leftmost one for us reading left-to-right, and then judge the next option by comparing it to the previous one, and so on. You compare added (more features/less cost) and lost (less features/more cost) value. Because we weigh losses heavier than benefits, there's an inertia toward the initial options. Only options with benefits that greatly outweigh losses combat that inertia. Hence respondents tended to choose plans more on the left.

[vsl]

Fatal flaw: the turkers weren’t invested, it was just a nonsense game for them.

[tommikaikkonen]

Agreed. I think this kind of research can give ideas on what kind of experiments to run on pricing pages, but there are so many factors affecting real life plan choice that everyone should have their own A/B testing setup to see what works for them specifically.

[stanislavb]

I agree, relying for Mech Turks would not produce real world results.

[samet]

thanks for such beautiful insights. It's nice to see that there is no significant difference between free and almost-free plans.

Is that somehow possible to share your your thesis? I'd love to read end to end.

[icedchai]

There's probably a flaw in paying people (MTurks) to choose pricing plans for something they don't really care about. Real consumers might act differently.

[tommikaikkonen]

Thanks. The thesis is really mediocre academically, so I don't feel comfortable putting it out in the public, but if you leave an email address here or contact me through Twitter I'll gladly send it to you.

[leethargo]

Thanks for your modesty. Unfortunately, I feel the same about my thesis (in progress) and would much rather share some weekend hack on GitHub...

[tommikaikkonen]

I think that's natural and OK. I would compare writing my thesis to writing my first full application after learning how to read and write code—even after several iterations under a skilled supervisor, the codebase is still going to have a more or less fledgling and awkward quality to it, even if the functionality proves useful. The second attempt takes less effort and results in higher quality output.

Similar to how few people would put their first application out in public, I prefer to keep my thesis private unless someone finds the information really useful :)

[samet]

Followed you on Twitter.