49 ms·

Obviously, the main argument against a $1 per month is the fact that you need to provide a lot of support. From my experience, this depends heavily on the targe

by WA 15y ago

Obviously, the main argument against a $1 per month is the fact that you need to provide a lot of support. From my experience, this depends heavily on the target audience I guess, but I completely disagree. I ran a website for a couple of years without thinking about turning it into a business. Finally, shortly before I graduated, I decided that I need to make money from it, otherwise I can't sustain it any more. Over the years, 30,000 people used my "startup" and in the end, I had a round 5,500 active users. I thought a lot about the pricing model, but turning a free service into a paid one, is not easy and truth is, I'll never find out how it would perform with a different pricing model. So I just made a decision and tried it. I decided against freemium and started charging 1€ at the beginning of this year. The intention was to make it a no-brainer and convert as many users as possible. I converted about 50% of them. People pay either 6 or 12 months in advance (to lower the transaction costs). My greatest fear was that there would be a lot of people who are not satisfied and want their money back or that I'll end up spending a lot of time on support emails. Thruth is, from now 4,000 paying customers. I had exactly 1 person who wanted his money back. I receive about 2-5 emails per day, mostly telling me how great the service is and what kind of features they would like to see. I literally spend 10 minutes per day on customer support. Fact is, it depends on your business and something that doesn't get mentioned in the blog is that people don't care too much about a lousy dollar or euro per month to complain about something (some do, however, but rarely).

albedoa 15y ago
This is great information. Do you care to talk about your subscription and renewal processes and how much you think they factored in to your conversion rate? Aside from the pricing model you chose, I wonder how important the level of convenience was to your users.
- WA 15y ago
  As soon as an account expires, the core functions cannot be used any more and it displays a message asking to prolong the account. People pay via credit card or with their paypal account (I use PayPal as the payment processor). This gets processed immediately and within a couple of minutes, the account is valid for another 6 or 12 months. The other option is wire transfer (which is very common in many European countries unlike in the US). The advantage here is that nobody needs to share any personal information. I just receive the money on a bank account. So far, there was no need to process that money automatically. I just wrote a little script, which greps for the transaction ID and the amount of money and prolongs an account accordingly. I do not have an automated recurring payment system. All payments are "one shot", like a prepaid service. I can imagine that this is something people really appreciate. They feel more in control of their money and manually entering the payment information once every 6 or 12 months isn't too much of a hazzle. Furthermore, I ask for as few personal information as possible. I don't store credit card information on my site. Heck, I don't even store real names in my database (but they are shown in PayPal).
MicahWedemeyer 15y ago
As a counterpoint, on my site (Obsidian Portal), support is a big drain (both timewise and mentally). Further, it has little to do with paid vs free (we're freemium). Both groups demand support, and the freebies are often the most angry. For example, every day I'm dealing with someone who is convinced that the login system is broken. It's always user error, but it requires input from me pretty much every time, to the point of "here is a new temporary password. i've tested it and it works. please copy and paste it in" Yes, we have an automated "forgot password" feature, but no matter how much automation you add there will always be people who avoid all that and demand personal attention.
- sid6376 15y ago
  Would it make sense to have an automated email to the effect of "Thanks for contacting us. Here are the frequently faced problems." ?
  - paganel 15y ago
    > Would it make sense to have an automated email to the effect of "Thanks for contacting us. Here are the frequently faced problems." ? It depends on the target audience. If it consists of geeks/people familiar with computers from an early age, then, yes, they might read that, otherwise you're going to do what MicahWedemeyer does (and what myself I'm doing, for a Groupon-clone website targeted to women): emailing your users predefined passwords, hoping they'll actually change them after the first time they use them.
    - eropple 15y ago
      This is not a good solution. If you're emailing them generated passwords, you should immediately route them into a password-change workflow on login. You shouldn't be "hoping" anything.
      - paganel 15y ago
        I'm not selling diamonds, only spa-coupons, so it's not the end of the world is someone-else somehow cracks other user's account (we don't store or process CC information on our side). > you should immediately route them into a password-change workflow on login We already have that by default (we're using Drupal), but, as I said, most of our target audience finds it too complicated.
wtracy 15y ago
I would point out that elementary school teachers are not likely to be very tech-savvy, and would probably be toward the high-end of amount of support required. YMMV.
- WA 15y ago
  Since you posted this as a reply to my post: My customers aren't elementary school teachers. You probably meant patio's post. I'm not sure whether you would call most women tech-savvy, but my customers are mainly women and they hardly require any technical support.
ahoyhere 15y ago
You made the first move - good job. Now, it's time to consider the extremely likely possibiliy that you could charge 5x the amount and without decreasing conversion by 5x. Which means you could probably be earning 5x than you are now (or more) without any extra work.
- WA 15y ago
  Thank you. Do you have an idea how I could increase the rate without pissing people off? Would you increase the rate for everyone or only for new customers? How do you justify an increase from 1€ to, say, 5€?

by WA 15y ago

albedoa 15y ago

This is great information. Do you care to talk about your subscription and renewal processes and how much you think they factored in to your conversion rate? Aside from the pricing model you chose, I wonder how important the level of convenience was to your users.

WA 15y ago
As soon as an account expires, the core functions cannot be used any more and it displays a message asking to prolong the account. People pay via credit card or with their paypal account (I use PayPal as the payment processor). This gets processed immediately and within a couple of minutes, the account is valid for another 6 or 12 months. The other option is wire transfer (which is very common in many European countries unlike in the US). The advantage here is that nobody needs to share any personal information. I just receive the money on a bank account. So far, there was no need to process that money automatically. I just wrote a little script, which greps for the transaction ID and the amount of money and prolongs an account accordingly. I do not have an automated recurring payment system. All payments are "one shot", like a prepaid service. I can imagine that this is something people really appreciate. They feel more in control of their money and manually entering the payment information once every 6 or 12 months isn't too much of a hazzle. Furthermore, I ask for as few personal information as possible. I don't store credit card information on my site. Heck, I don't even store real names in my database (but they are shown in PayPal).

MicahWedemeyer 15y ago

As a counterpoint, on my site (Obsidian Portal), support is a big drain (both timewise and mentally). Further, it has little to do with paid vs free (we're freemium). Both groups demand support, and the freebies are often the most angry. For example, every day I'm dealing with someone who is convinced that the login system is broken. It's always user error, but it requires input from me pretty much every time, to the point of "here is a new temporary password. i've tested it and it works. please copy and paste it in" Yes, we have an automated "forgot password" feature, but no matter how much automation you add there will always be people who avoid all that and demand personal attention.

sid6376 15y ago
Would it make sense to have an automated email to the effect of "Thanks for contacting us. Here are the frequently faced problems." ?
- paganel 15y ago
  > Would it make sense to have an automated email to the effect of "Thanks for contacting us. Here are the frequently faced problems." ? It depends on the target audience. If it consists of geeks/people familiar with computers from an early age, then, yes, they might read that, otherwise you're going to do what MicahWedemeyer does (and what myself I'm doing, for a Groupon-clone website targeted to women): emailing your users predefined passwords, hoping they'll actually change them after the first time they use them.
  - eropple 15y ago
    This is not a good solution. If you're emailing them generated passwords, you should immediately route them into a password-change workflow on login. You shouldn't be "hoping" anything.
    - paganel 15y ago
      I'm not selling diamonds, only spa-coupons, so it's not the end of the world is someone-else somehow cracks other user's account (we don't store or process CC information on our side). > you should immediately route them into a password-change workflow on login We already have that by default (we're using Drupal), but, as I said, most of our target audience finds it too complicated.

wtracy 15y ago

I would point out that elementary school teachers are not likely to be very tech-savvy, and would probably be toward the high-end of amount of support required. YMMV.

WA 15y ago
Since you posted this as a reply to my post: My customers aren't elementary school teachers. You probably meant patio's post. I'm not sure whether you would call most women tech-savvy, but my customers are mainly women and they hardly require any technical support.

ahoyhere 15y ago

You made the first move - good job. Now, it's time to consider the extremely likely possibiliy that you could charge 5x the amount and without decreasing conversion by 5x. Which means you could probably be earning 5x than you are now (or more) without any extra work.

WA 15y ago
Thank you. Do you have an idea how I could increase the rate without pissing people off? Would you increase the rate for everyone or only for new customers? How do you justify an increase from 1€ to, say, 5€?