Most SaaS (and businesses) is a price race to the bottom. This is bad because:

  • Lower margins = must cut quality
  • Cutting quality = must charge lower price
  • Competitors all copy each other, so everyone is lowering price to be “competitive,” and the quality exponentially decays
  • In the end, the customers suffer.

Instead of cutting quality to lower price, one could increase efficiency. But to be “competitive,” you have to do something novel and increase it by 10X compared to your competitor. This isn’t easy nor probable as it runs into some physical constraints for any field that isn’t completely new.

Assuming you aren’t a “pioneer” and just focusing on something completely new and not proven in the market, the other way to make money is to charge an insane premium. This is good because it does the reverse of a price race to the bottom:

  • Higher margins = more money to invest in quality
  • Better quality = charge even higher prices
  • Hard for competitors to copy
  • In the end, the customer gets value.

Price is what you pay. Value is what you get.

—Warren Buffett

Customers don’t pay money based on absolute cost.

They pay based on the value they get vs. the price. The price does not matter. Consider:

  • People are unlikely to pay $100 for a cup of coffee.
  • People will be very likely to pay $100 to buy a luxury apartment overlooking Central Park.

Same price. What’s the difference? Value to the customer.

Increase Value

A few ways to increase SaaS value and what I think of them:

  • More features: Yes, but takes a long time to develop and each feature is speculative. High risk.
  • More service: Yes, but can be harder to scale. Though you can just charge more and have fewer customers. Completely legit and a good way to go.
  • Bonus stack: One of the best ways. See below.

The Bonus Stack

If your SaaS serves X niche, one of the lowest-cost things you can do to provide max value to the customer is add bonuses related to their niche. Direct response landing pages do this all the time. As a refresher, they look something like this:

FREE Bonuses!
- HOW TO GENERATE 239487987 LEADS IN 3 MINUTES (\\$3997 VALUE)
- THE SCALING SUPER WIDGET (\\$1997 VALUE)
- HOW TO SCAM YOUR AUDIENCE BY PRETENDING TO BE RICH (\\$9997 VALUE)
TOTAL VALUE: \\$15991
YOUR COST: FREE.

(with each bonus having a lengthy section to justify its value, of course).

If your SaaS is some CRM tool, you can have a checklist on all the things they should do to follow up, or a reference PDF for email templates. Or both. Inflate its value and slap it as your offering.

As an example, Wraith Scribe had 2 bonuses:

  1. Telling people how to do SEO strategically with AI
  2. Telling people how to land freelance writing gigs and fulfill orders quickly with AI.

These cost me a few hours to put together each. But provides tremendous additional value to the audiences that’ll use my AI content generator (bloggers and freelance writers).

Per my new content strategy, I need to have free guides for my social media audience to attract them to my brand. So, I’ve removed the bonuses from Wraith Scribe and instead will give it away for free.

But I will keep pursuing the “bonus stack” and add bonuses back as I:

  • Create new products where I can play nepotism and give subscribers a discount to my other SaaS’s (where relevant).
  • Add a lot more PDFs and guides so that some can be free, and some can be used as a bonus behind a SaaS paywall.

But Why Is It Missing?

SaaS websites look “cool” but miss a lot of direct response elements.

Direct response sells well. And bonuses helps sell. This is fact.

So why is it missing from SaaS? Am I missing something where the SaaS audience has no use for bonuses or direct response, somehow? Is the SaaS audience’s buying psychology fundamentally different from all other products/services on Earth?

Genuine question, because I don’t want a blind spot where I invest blindly into bonuses and have it not increase my conversion at all.

Some Stats

  • Of my past 20 subscribers, 8 have downloaded the free bonuses.
  • This is with the pretense of if they download the bonus, they aren’t eligible for a refund.

A sample size of 20 doesn’t mean anything. But at least it isn’t 0 or 1 out of 20 that’s downloaded it. So maybe at least the sales pitch for the bonuses increases the perceived value of the product?