When selling SaaS solution to small businesses, how do I tell if they are willing to pay X, even if they say they'd like to pay as little as possible?

Many well-known SaaS companies have doubled their prices. I've personally worked with a few that have gone through it. In most cases, your conversion rates stay the same and you see a huge jump in revenue. This is because people tend to under-price themselves. Also, your product improves over time so it provides more value and can support a higher price. But don't raise prices for old customers. Grandfather them in so their plans stay the same price. In the long run, it won't make a difference to your growth since most of them will churn out anyway. If you raise prices on current customers, you'll get a huge backlash. It gets nasty. I'm pretty sure that Zendesk tried it and had to reverse the price increase. I highly recommend raising your price by 100% for a month on new customers. Keep a close eye on your revenue and your conversion rates. If things don't go well, you can easily reverse it and discount everyone that paid for the more expensive plan. Either way, you'll know what your market will actually support.

Yours is a common question! There are a great many factors you must consider when setting your price/rates. People tend to penalize themselves both when they are experts and when they are not. SMARTSTART has published a guide specifically about Pricing that teaches people how to put the right price on anything you sell. You can get a free copy at http://smartstartcoach.com/smartstart-pricing/ It has helped a great many business owners. I encourage you to download it, read the whole thing (it's under 100 pages) and do the pricing assessments included in it before setting your rates. As you'll see within it, "level of expertise" is not the most critical factor in pricing and your price is an important form of communication to your client. Hope the eBook helps you with this. -- Linda

I don't think there's a best practice, similar to how much you should charge for your B2B SaaS company, cause it really depends on the market size, cost to deliver, and perceived monetary value you're offering via your API. That being said, the way I've baselined any pricing for my products has been to look at 100 companies that share similar customers and pricing model and either look on their website or email their sales team and ask directly. Even if you get 10% response that's enough to get you started.

Taskrabbit and oDesk. Though over time the most common requests are usually standardized into products to reduce complexity for the buyer. For most buyers the open ended nature of a bounty system is intimidating.

You're not the only one that struggles with this. Pricing can be tricky for any industry really, but in digital marketing especially so because many still don't understand the value in it. When you can sell the value, then you can sell the price. When it comes to setting a price for anything you can look at it one of two ways, you are either selling value or you are selling your time. When you sell value you have to be at a price that the buyer agrees on the cost of the value being received. If you're selling your time, then you need to determine how much you need for that time and hope the buyer agrees that's what it's worth. With that, you can provide a quote or you can estimate a total cost based on the number of hours you think the job will take. The downside to a quote is that there is often scope creep, that is the client requesting things that you never really intended to be part of the project, or them expecting a certain result and suggesting you have to do whatever it takes to get that result. This is especially important in web marketing because because there is always something more to do to. Many people shy away from hourly work because they don't want to be "nickel and dimed" on every little thing and for the project to end up costing much more than they anticipated. I have found a mixture of the two to work. Provide an estimate based on a certain number of hours per month. Outline what that estimate includes but be flexible if you need to do things that were never included in that estimate. Just make sure the client knows that you stop at whatever hours you agree too each month. Any solution will have issues. You just need to find the one that works best for you and your clients.