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I'm seeing this behavior especially for addons. When customers are paying a recurring fee for the main app and the costs of addons add up, they seem to prefer a
by sandeepshetty 14y ago
I'm seeing this behavior especially for addons. When customers are paying a recurring fee for the main app and the costs of addons add up, they seem to prefer a fixed one-time fee (not necessarily equal to the CLV).
- noahc 14y agoYou're doing pricing wrong then. If product A creates $300/month in value and you charge $50/month for it, and the user needs addon a for $15 and creates $8 in value and addon b for $35 a month but creates $20 in a value a month you're better off charging $150 a month for the package that has those addon features.
- SatvikBeri 14y agoGood data, thanks. That said, there was a recent blog post about how one HNer dramatically increased his revenue by changing his pricing model. Rather than charge for features, he adopted a few tiers of service, each one targeted at one type of customer's use case.[1] I don't know your exact situation, but that might be worth trying as opposed to configurable add-ons. In general, speaking in the language of use cases resonates with the buyer more, and is more likely to result in a purchase. [1]: http://www.extendslogic.com/business/what-i-learned-from-increasing-my-prices/ http://www.extendslogic.com/business/what-i-learned-from-inc...