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> Think of it as $13.25 per user per month. They really should advertise it as such.

by kamkha 15y ago

gabaix 15y ago
I think their reasoning is they want people to commit to a full year rather than one month. I agree it's not a good way, really. They should start with $15/month and suggest $795 yearly for discount.
mechanical_fish 15y ago
So, I just saw several nice talks about A/B testing, one of which was by our very own patio11. And the way A/B testing works is that you have to take the data. Hypotheses are just hypotheses. They can be wrong! They can be really wrong! The data will surprise you sooner or later. Here's a hypothesis: If you put up this chart instead of the one that is there: 2GB: $9.95 per month 100GB: $19.95 per month 200GB plus Teams: $13.25 per month per user, min 5 users Here is what might happen: A. On the margin, people with very small companies will tend to buy more Teams subscriptions. B. However, that effect may be partially canceled out by the large companies that are subliminally turned off by a page that mentions only monthly pricing, not other kinds of pricing. Monthly pricing is great for individuals with credit cards, but company purchasing departments can work... differently. It might in fact be much easier to buy a year at a time than a month at a time just because of the administrative overhead and the culture of purchasing departments, and you'll absolutely have to use purchase orders and invoicing and get approvals, and if the vendor isn't set up for such a thing the whole process will be a huge ball of red tape, and gosh look at the time let's go out for lunch and talk about Dropbox tomorrow, or maybe next month... C. Meanwhile, some of your potential 100GB customers will be furious that they are being charged so much money! They will stomp their feet and emit furious tweets and threaten to hold their breaths until they turn blue unless they get the $13.25 price. D. And other potential 100GB customers will look at this and say "hey, bulk discount!". And they'll figure out how to band together with four trusted friends, and pull together a year's worth of cash at once, and buy a Teams account instead, and whoops now Dropbox is making less money on one Teams account than five 100GB accounts. ...and thus I wouldn't be too surprised if the results of A/B testing say: Leave the pricing page as it is. ...or, maybe Dropbox didn't actually test this page, and the more-straightforward hypothesis is actually the one that is right, and they could make even more money by switching to all-monthly pricing. ;)
- w1ntermute 15y ago
  > D. And other potential 100GB customers will look at this and say "hey, bulk discount!". And they'll figure out how to band together with four trusted friends, and pull together a year's worth of cash at once, and buy a Teams account instead, and whoops now Dropbox is making less money on one Teams account than five 100GB accounts. Wow, this is actually a great idea. I should do this with my friends.
- robryan 15y ago
  Having a seemingly higher price might actually also make big businesses take a look at it more seriously. At something like $13 a month it's easy to overlook and aim for something that appears seemingly more big business ready.
Duff 15y ago
I was thinking the same thing. I work for a services organization in a huge IT environment, and we do everything by the month. But in this case, Dropbox is competing with people who are going to buy a Windows server to host files. And $795 is cheaper than a server+windows+vpn+...
inopinatus 15y ago
It is much easier for most companies to pay $600 annually via an invoice than $50 monthly via a credit card. Failure to support traditional accounts payable is a blunder that half the cloud makes.

> Think of it as $13.25 per user per month. They really should advertise it as such.

by kamkha 15y ago

> Think of it as $13.25 per user per month. They really should advertise it as such.

I think their reasoning is they want people to commit to a full year rather than one month. I agree it's not a good way, really. They should start with $15/month and suggest $795 yearly for discount.

mechanical_fish 15y ago

So, I just saw several nice talks about A/B testing, one of which was by our very own patio11. And the way A/B testing works is that you have to take the data. Hypotheses are just hypotheses. They can be wrong! They can be really wrong! The data will surprise you sooner or later. Here's a hypothesis: If you put up this chart instead of the one that is there: 2GB: $9.95 per month 100GB: $19.95 per month 200GB plus Teams: $13.25 per month per user, min 5 users Here is what might happen: A. On the margin, people with very small companies will tend to buy more Teams subscriptions. B. However, that effect may be partially canceled out by the large companies that are subliminally turned off by a page that mentions only monthly pricing, not other kinds of pricing. Monthly pricing is great for individuals with credit cards, but company purchasing departments can work... differently. It might in fact be much easier to buy a year at a time than a month at a time just because of the administrative overhead and the culture of purchasing departments, and you'll absolutely have to use purchase orders and invoicing and get approvals, and if the vendor isn't set up for such a thing the whole process will be a huge ball of red tape, and gosh look at the time let's go out for lunch and talk about Dropbox tomorrow, or maybe next month... C. Meanwhile, some of your potential 100GB customers will be furious that they are being charged so much money! They will stomp their feet and emit furious tweets and threaten to hold their breaths until they turn blue unless they get the $13.25 price. D. And other potential 100GB customers will look at this and say "hey, bulk discount!". And they'll figure out how to band together with four trusted friends, and pull together a year's worth of cash at once, and buy a Teams account instead, and whoops now Dropbox is making less money on one Teams account than five 100GB accounts. ...and thus I wouldn't be too surprised if the results of A/B testing say: Leave the pricing page as it is. ...or, maybe Dropbox didn't actually test this page, and the more-straightforward hypothesis is actually the one that is right, and they could make even more money by switching to all-monthly pricing. ;)

w1ntermute 15y ago
> D. And other potential 100GB customers will look at this and say "hey, bulk discount!". And they'll figure out how to band together with four trusted friends, and pull together a year's worth of cash at once, and buy a Teams account instead, and whoops now Dropbox is making less money on one Teams account than five 100GB accounts. Wow, this is actually a great idea. I should do this with my friends.
robryan 15y ago
Having a seemingly higher price might actually also make big businesses take a look at it more seriously. At something like $13 a month it's easy to overlook and aim for something that appears seemingly more big business ready.

Duff 15y ago

I was thinking the same thing. I work for a services organization in a huge IT environment, and we do everything by the month. But in this case, Dropbox is competing with people who are going to buy a Windows server to host files. And $795 is cheaper than a server+windows+vpn+...

inopinatus 15y ago

It is much easier for most companies to pay $600 annually via an invoice than $50 monthly via a credit card. Failure to support traditional accounts payable is a blunder that half the cloud makes.