Matt Watson’s Post

The Decoy Effect - Heard of It? 🤔 No? Then It's Time to Rethink Your Pricing Strategy. 💸 Let's face it - every startup CMO borrows heavily. 🕵️ It's understandable; the tasks are many, and they are but one. This endless imitation often results in a sea of indistinguishable products becoming the new normal. I've been busy strategizing our pricing 📈 and, naturally, started with researching competitive pricing. (You can grab the PDF at the end of this post.) What I found was alarming: three pricing tiers - 0x, 1x, 1.5-2x - essentially telling customers, "Pay us a little or a lot." 🤷 So, what do customers do? Opt for the lower price, unless a life-changing feature is hidden in the most expensive tier, leading to resentment or lost customers to competitors. That's where the clever "Decoy Effect" comes in. 🦆 In essence, among your options, include something unreasonably priced compared to the others. Typically, this is the second option, to nudge customers towards the third - the most expensive one, or it's the third option, to steer them away from the cheapest and towards the second. But remember, four options might be overkill... more on that later. 📝 How to Set the "Right" Price Difference? Well, testing, of course! 😂 Just kidding, who does that? Base it on your annual subscription discount. For instance, the cost of a monthly subscription for the second option, paid annually, equals the cost of the first option paid monthly. Another approach: benchmark against your biggest competitor's "best" price, ensuring it's worse than your "best" offer. This could mean your third option offers significantly more value for just a bit more money. 👀 [https://lnkd.in/eVQyjd6u] for those who, like me, enjoy flaunting names and facts from marketing history. 📚 Grab a PDF with a concise collection of SaaS startups' pricing here. 👇 https://lnkd.in/eBkBmKSM #CMO #pricing #stratup

Scaling from $1M to $10M ARR: Top 3 Lessons I learned from #SaaStr 2023 1. It's unlikely to actually do it. Do everything to bend the odds of success. 2. Do small pilot investments into different growth channels and double down on what's working. 3. Don't overdiversify in more products. You have rarely exhausted your TAM at this stage. Double down on what's working and make it the best product so competitors take years to catch up with you. 1️⃣ The Odds Are Against You, But That's Okay Let's face it, scaling from $1M to $10M in ARR is a Herculean task. The odds are stacked against you, but that's what makes the journey so rewarding. As Jason Lemkin often says, ""Most startups don't make it, but the ones that do, really do."" So, embrace the challenge and defy the odds! 2️⃣ Pilot Before You Scale 💡 Before you go all-in on any growth channel, start with small pilot investments. Whether it's content marketing, PPC, or partnerships, test multiple channels to see what delivers the best ROI. Once you find what's working, double down and scale aggressively. Remember, "What got you here won't get you there." 3️⃣ Don't Overdiversify Your Product—Double Down 🎯 It's tempting to diversify into multiple products or services, especially when you start seeing some success. But as Jason Lemkin advises, you've probably not even scratched the surface of your Total Addressable Market (TAM) at this stage. Focus on making your existing product so good that it would take competitors years to catch up. 👇 Your Turn 👇 I'd love to hear your thoughts and experiences on scaling from $1M to $10M ARR. What worked for you? What didn't? Let's keep the conversation going! 🔗 And if you found this post valuable, please consider sharing it.

Yes, we work with world class brands. Yes, we work with startups. Yes, we work with SMB's. Yes, we work with Enterprise (but you better not be jerks). Yes, we know your mom loves our work. Yes, we work with Hollywood Royalty. Yes, we create web and social content. Yes, we'd like to work with you. Yes, we are free next week for a discovery call. No, your mom doesn't like us like that. We're just friends. #ecommerce #b2bsales #marketing #dtc #mops #contentisking

WHY STARTUPS FAIL Day 12 of my journey to SaaS expertise Building Without a market: Building what people want and building what people will pay for are two different things. It is possible to build a product that people want but are not willing to pay for. The major mistake founders make is assumption. They assume what people need thus starting with an idea instead of a problem When your SaaS product doesn’t solve a specific problem for a business, the odds of building a successful SaaS startup are low and you are left to rely on luck. Bad or no Marketing: Founders assume that “A good product will sell itself” hence they focus only on the product and less on marketing. In most cases, the best products do not win, but the product with the best marketing and best sales does. TO PLG AND BEYOND

Understanding the right Go-to-Market strategy is crucial for your journey. Dive into our blog to discover how sales-led, marketing-led and product-led strategies can propel your startup forward. #SaaSSuccess #GtMStrategy

My idea was never to make money or build personal brands to help others make money. But in April 2024, I understood the gap in the market of SaaS startups. SaaS startups that are struggling to get customers and make money, considering high CAC and lower LTV. I decided to change that. So, I dug in and learned how exactly I can change that: Here's how we are changing that: 1. Right content that makes the customers obsessed. 2. Storytelling. At. Its. Best. 3. Offering rewards to spread the word. 4. Running campaigns, consumer-friendly only. 5. Classy creatives and animations that capture. 6. Email nurture with personalization, not generic emails. With this strategy, we are helping SaaS startups generate leads and eventually revenue using our Obsession Attraction Strategy. Do you want to get a detailed post on how we attract leads for our clients using the Obsession Attraction Strategy? Let me know in the comments. #digitalmarketing #saas #linkedingrowth #saastool

If you've only worked at venture backed startups or large companies with a wildly profitable core business, you should totally read The SaaS Playbook by Rob Walling. While it's written primarily for the founders of bootstrapped SaaS businesses (i.e. those that don't raise external capital), I think it might be EVEN MORE USEFUL for the VC-backed crowd. And it really made me rethink some of the things I believed while building Timeful and working on Gmail. When you have capital available, either from VCs or from the profitable core business (e.g. Search Ads at Google), it's easy to come up with intellectual arguments for why your product doesn't need to make money. Here are things that I've actually said in the past: "We should have a completely free product because engagement growth is the only thing that matters at the moment." "We need to keep a permanent free tier because it will give us so much word of mouth and top of funnel awareness." "We shouldn't charge users more for a subscription or add more ad load because those would damage our precious brand." "We don't need to monetize Gmail directly because it provides so many other indirect benefits to Google, like signed in users for Search" While all of these have a kernel of truth to them and may have been right strategically, it's also possible that these were just "luxury beliefs" that we could get away with in an environment of plenty. When I read stories from bootstrappers like Rob, it's a helpful reminder that making payroll is the first priority and usually that happens best when a customer buys a useful tool at a fair price. There are ton of stories in the book about free tiers, pricing changes, marketing channels, and more, and I'm guessing they'll make you think twice, so definitely check it out. #founders #bootstrapping #venturecapital #saas

In fact, most of SaaS startup fail or will fail due to their marketing "strategy". Don't even call it strategy when: - You're doing random actions because you saw someone doing it. . - Focusing on yourself and not your potential clients. - Focusing on the benefits and not the problems. - You have a brief idea of a plan in your head without details (It's like saying "yeah today, i have to breath") Your SaaS might be good but your marketing is not and you'll end up like the titanic. Having a movie about how a disaster your startup was hehe. #Saas #DigitalMarketing #Acquisition

We paused sales in our start-up so we could systemise... here's the result. This probably isn't the best way to build a software business that scale fast but this made the most sense to me! Backstory: Tiny Rockets is a website development service for small / new businesses that we did a soft launch of last week. Before doing any huge development work on making it a company that has the potential to scale fast, I wanted to test some assumptions. A lot of developers (me included), like to jump in and build the solution before properly understanding the problem. This is exactly what I didn't want to do! Stage 1: Testing assumptions We wanted to test 3 main theories we had. a. Will people buy this thing? b. Will customers find this solution valuable? c. How much time will it take to manually serve these customers? Stage 2: Breaking point We automated the key things = payments right off the bat. Everything else was manually handled by me. Build, content upload, deployment and all the bits in between. We set up some auto-responders to get content from clients, which mostly went OK. But when this process failed.... my god things got hard! At this point we paused sales and started development. Stage 3: Development Anyone who has ever built a website knows how hard it can be to get content from a client. This was our main issue too. We needed a system that would let customers input the content we need them to upload without our involvement. Before, content would come over in drips and drabs, greatly lengthening the time it would take us to build and launch a site. We designed a platform that helps our customers upload their content in a convenient way, putting them in the mindset of attracting their customers while they do it. For us, the platform handles the entire content collection process until the website is ready to build, allowing us to launch a new website for a customer in under 24 hours. Stage 4: Scale (Hopefully) + Listen So now we're able to focus on scaling a bit faster. At some point we'll automate more of the process but for now we can be confident of serving new customers at speed. Before automating anything else, we'll listen to customer feedback and observe our own processes to see what problems pop up! #websites #saas #startups #customerdevelopment

99% of SaaS Startups I see don't produce their value-add services and create additional revenue streams. They "give it away" Here is how one of my teams made too much money (according to our analysts): - Find something that your post-sale team does over and over again - This could be a best practice or application - Create a low-cost, medium-cost, high-cost offering - Make it easy to sell and deploy - Get high-quality partners to deliver the low-cost offerings -Your team can deliver the new fun stuff to your high ARR customers --> Real-life example: At Brightcove, in the early days of video, we noticed that a large majority of our customers wanted a video portal. After building the same experience a few times, we created a template application that we sold and deployed at a pretty good margin. We created 3 price points (for example, 30, 60, 90k). We had marketing put together 1-page sheets for the sales team We made sure that anyone on our team could be brought into a presales conversation to talk about its ease of use We had so much demand for each version that we found 3-4 partners that were fully trained in how to build and deploy them. This was because our services revenue was too high a percentage for a SaaS company. From the numbers, it looked like the product was too complex to launch and needed services. The reality was that we created a services product that filled an area of high demand. This eventually was folded into the actual core product as an offering. The core PS team would then work on the super custom experiences (catchup TV that is integrated with cable permissions, apps, etc.) #startups #sales #professionalservices #saas #technology