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If pricing your product is so complicated that you need an entire separate product to manage it, you are probably indulging some MBAs in their own make-work pro

If pricing your product is so complicated that you need an entire separate product to manage it, you are probably indulging some MBAs in their own make-work projects too much. Non-transparent pricing is a huge red flag to potential customers.

danenania 3y ago
The problem is not so much complicated pricing as grandfathering existing customers every time pricing changes (generally considered a best practice to avoid pissing off your customers). Then you end up with lots of gnarly conditional logic around anything that touches billing because you have to support a bunch of different pricing/billing versions, different upgrade/downgrade paths, etc. It gets even worse if your pricing model changes, like you go from tiers to per seat or usage-based. You could just never change your pricing, but you’ll almost certainly be leaving significant money on the table as you’re highly unlikely to get it right on the first try. It could even kill your business, since the right product with the wrong pricing can be as much of a non-starter as the wrong product. Iterating on price can be as important as iterating on the product.
- phantom784 3y ago
  I've worked on pricing. There's a lot of complexity, even with a fairly simple product. Our product was a monthly subscription with 4 different tiers. Complications included: - Annual plans that include a discount vs paying month to month. - Introductory pricing (and how long that lasts) - Promo codes - Dealing with multiple currencies - Pricing on iOS, where you have to pick on of their "pricing tiers"
haizhung 3y ago
Hmm, I don’t know, what about products that have very thin margins? I suppose you would like to mirror the market price of that product as closely as possible, and that seems like it’s better to automate it.
- jmacd 3y ago
  That definitely is top of mind for any startups heavly relying on OpenAI or other hosted LLMs.
jmacd 3y ago
We don't advocate complex pricing models. KISS is often the best approach, although some complexity does have its place. The real complexity comes from when you need to make changes to your pricing and have to manage grandparenting, upsells, etc. Another vector of complexity comes from the need to make different pricing and packaging offers for different markets, geographies, etc. You can have a very simple pricing model, but that doesn't mean that there isn't complexity that emerges pretty quickly.
deleted 3y ago
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slyall 3y ago
A previous job was working at a supermarket's online store. Supermarket's have all sorts of weird specials eg "4 pies for $5" or "a pie and a coke for $3". We were running into problems when we had large test baskets ( $500 always, $200 sometimes ) that there would be so many combinations of specials that calculating the best way to apply them was causing CPU load and timeouts. Fix was somebody sat down, remembered their CS classes and applied a more scalable algorithm. Problem fixed.

danenania 3y ago

The problem is not so much complicated pricing as grandfathering existing customers every time pricing changes (generally considered a best practice to avoid pissing off your customers). Then you end up with lots of gnarly conditional logic around anything that touches billing because you have to support a bunch of different pricing/billing versions, different upgrade/downgrade paths, etc. It gets even worse if your pricing model changes, like you go from tiers to per seat or usage-based. You could just never change your pricing, but you’ll almost certainly be leaving significant money on the table as you’re highly unlikely to get it right on the first try. It could even kill your business, since the right product with the wrong pricing can be as much of a non-starter as the wrong product. Iterating on price can be as important as iterating on the product.

phantom784 3y ago
I've worked on pricing. There's a lot of complexity, even with a fairly simple product. Our product was a monthly subscription with 4 different tiers. Complications included: - Annual plans that include a discount vs paying month to month. - Introductory pricing (and how long that lasts) - Promo codes - Dealing with multiple currencies - Pricing on iOS, where you have to pick on of their "pricing tiers"

haizhung 3y ago

Hmm, I don’t know, what about products that have very thin margins? I suppose you would like to mirror the market price of that product as closely as possible, and that seems like it’s better to automate it.

jmacd 3y ago
That definitely is top of mind for any startups heavly relying on OpenAI or other hosted LLMs.

jmacd 3y ago

We don't advocate complex pricing models. KISS is often the best approach, although some complexity does have its place. The real complexity comes from when you need to make changes to your pricing and have to manage grandparenting, upsells, etc. Another vector of complexity comes from the need to make different pricing and packaging offers for different markets, geographies, etc. You can have a very simple pricing model, but that doesn't mean that there isn't complexity that emerges pretty quickly.

deleted 3y ago

[deleted]

slyall 3y ago

A previous job was working at a supermarket's online store. Supermarket's have all sorts of weird specials eg "4 pies for $5" or "a pie and a coke for $3". We were running into problems when we had large test baskets ( $500 always, $200 sometimes ) that there would be so many combinations of specials that calculating the best way to apply them was causing CPU load and timeouts. Fix was somebody sat down, remembered their CS classes and applied a more scalable algorithm. Problem fixed.