4 ms·

Managing Pricing

88 points by pvh 12y ago

nakodari 12y ago
Kudos to HeavyBit for including the transcript. As a hearing impaired individual, it really helps. I hope it becomes a standard across the industry to include transcripts (or subtitles) with every video.
pvh 12y ago
Pricing is super hard - I love this framing of the problem but there are so many other good references. I'm also a big fan of Neil Davidson's very brief book "Don't just roll the dice": http://neildavidson.com/download/dont-just-roll-the-dice/ http://neildavidson.com/download/dont-just-roll-the-dice/
yurylifshits 12y ago
Notes from another pricing workshop by Michael Dearing http://yurylifshits.com/post/52854299110/8-pricing-strategies-for-startups http://yurylifshits.com/post/52854299110/8-pricing-strategie...
suzyperplexus 12y ago
There are also a few quick videos on the Harrison Metal site itself: http://www.harrisonmetal.com/pricing_1/ http://www.harrisonmetal.com/pricing_1/
brokentone 12y ago
Unrelated... this video player and transcript integration is really, really nice. Did HeavyBit build some or all of it? I see the player is video.js
- suzyperplexus 12y ago
  Heavybit did build it. It was a team effort from Tim Nguyen, Tom Drummond, Dom Damian and Jason Harper.
- timtdnguyen 12y ago
  Tim here - Thanks brokentone! Glad you like it. We built a lot of it ourselves with some great tools. The player is video.js and we use popcorn.js to sync the transcripts, outline and player timecode. The video is transcribed and timecoded with Zencaptions and the transcoding is done via Zencoder. Let me know if you've got any other questions. Happy to help. Or better yet, shoot me an email: tim[at]heavybit.com. Right now we're working out some kinks with V1, but we're hard at work for the next version. Suggestions welcome. :)
  - lambtron 12y ago
    Great work! Always wondered what the vibe masters were up to ;)
- ameister14 12y ago
  See, I immediately went to read it because the video was an overlay and I associate those with navigation tools, but was frustrated when the overlay turned out to be so large; I then deleted it without thinking about it and read the first paragraph before realizing it was a video. So, I think you should shift it down the screen, below the bio, and keep the effect you currently have where it moves with me as I read the transcript.
  - timtdnguyen 12y ago
    Solid feedback. Something like this: http://cl.ly/image/333k431K233o http://cl.ly/image/333k431K233o
gyardley 12y ago
As an aside, I've got the Dualit toaster he talks so much about, and it's worth every penny. Attractively designed, built like a tank, lifetime warranty, easy to clean, and makes perfect toast.
- dmourati 12y ago
  Kudos for owning up to that. I think he may have been joking about owning it himself but then again maybe not.
j_s 12y ago
Rob Walling of Startups for the Rest of Us discussed the first of a two-part article on SaaS pricing¹ by Richard White of UserVoice in episode 153². The podcast also covered collecting billing info in episode 179³ and briefly discussed handling credit card expirations in episode 184⁴. ¹ http://500.co/2013/07/18/the-data-behind-purchasing-behavior-at-uservoice-pricing-for-conversion-part-i/ http://500.co/2013/07/18/the-data-behind-purchasing-behavior... ² http://www.startupsfortherestofus.com/episodes/episode-153-saas-pricing-tactics http://www.startupsfortherestofus.com/episodes/episode-153-s... ³ http://www.startupsfortherestofus.com/episodes/episode-179-when-to-ask-your-customers-for-credit-cards http://www.startupsfortherestofus.com/episodes/episode-179-w... ⁴ http://www.startupsfortherestofus.com/episodes/episode-184 http://www.startupsfortherestofus.com/episodes/episode-184
n00b101 12y ago
I think the following approach is more appropriate, at least for big business: http://www.rti.com/whitepapers/Dirty_Little_Secret.pdf http://www.rti.com/whitepapers/Dirty_Little_Secret.pdf
nodesocket 12y ago
So many great points and takeaways, but I think the following is key: "What matters is not so much the distance between the cost to produce something and the price to sell it. Focus on, the difference between the price and the perceived value to the end user. The perceived value has to be greater than the price! Don't build a business around cost + margin, build businesses around perceived value." Focus on the incentive to buy, not the incentive to sell for your business.
deleted 12y ago
[deleted]
Mz 12y ago
Okay, having managed to read most of it (I think -- my eyesight is crap and giving me fits today), for me, I think the important pieces are the bits about psychology -- about intuition and analysis (which I was already familiar with but not in this business related form) and the piece about loss aversion. I think those are really helpful for me, but more from a marketing or audience relationship point of view. For me, I am pretty clear that monetization will be indirect (like ad income, that kind of thing) so this is not so much about pricing for me. But my challenge is that initial intuition piece -- that piece I know of as a concept of "in the blink of an eye" what people think, as their first reaction -- tends to be pretty negative. And I have done a lot of retrenching to back out of that negative relationship as much as I can and I currently have a single person with positive interest and relatively little harassment (compared to what it once was). So, for me and the problems I am contemplating, these seem more like marketing ideas. Which is fine. But I am wondering now how I can apply those concepts to that angle and not pricing per se. But excellent piece. I forwarded it to a couple of people. Thanks for writing it (ugh -- video is a problem for me and the formatting of the transcript is kind of frustrating, FYI).
spitfire 12y ago
I'm in the process of figuring out a pricing model for a SaaS service right now and I watched this video in full. There's lots of interesting stuff in this, but in the end I am left no better off. For someone who is actually building a pricing structure now, it has nearly no actual value. I still do not know how to price my service, do I price per seat, per year based on a random number, per $FROBIT used, or a one time sale? I know I should price based on value, and my price should be less than the perceived value to my user. But I learnt that in my 10th grade business class. However, that said it was a very well done presentation, and once someone has a working pricing structure then these tools will be useful improve business outcomes.
- patio11 12y ago
  Hum a few bars about what your SaaS does for whom and I will happily napkin out a pricing structure for you. If you have no clue, for B2B SaaS sold on a low-touch model with the assumption you're not shooting for the VC->IPO track, just copy paste $49/$99/$249 into the bog-standard Three Column SaaS Pricing Page and offer 1 month free with an annual pre-pay.
  - spitfire 12y ago
    Hi Patrick, wasn't expecting you to respond. But here it goes. I have a service which identifies which accounts will pay for accounts receivable. IE: collections agencies. Numbers show it can move the needle double to triple digits depending on the account mix. Right now, I'm planning on a per seat monthly subscription. Customers know how much they'll be charged each month, and I think it lets me focus on the value rather than community unit costs. EDIT: Just a note, unfortunately, this is a very high touch environment. The upshot being that once a customer chooses you, they never leave. Even if they're being outright abused. (I have stories!)
    - berberich 12y ago
      I recommend taking a look at this post, along with the rest of the site. Lots of great insights: http://blog.priceintelligently.com/blog/bid/198499/Stop-Per-User-SaaS-pricing-You-re-Killing-Growth http://blog.priceintelligently.com/blog/bid/198499/Stop-Per-... I believe it was Patrick who recommended that on Twitter the other week.

88 points by pvh 12y ago

Kudos to HeavyBit for including the transcript. As a hearing impaired individual, it really helps. I hope it becomes a standard across the industry to include transcripts (or subtitles) with every video.

pvh 12y ago

Pricing is super hard - I love this framing of the problem but there are so many other good references. I'm also a big fan of Neil Davidson's very brief book "Don't just roll the dice": http://neildavidson.com/download/dont-just-roll-the-dice/ http://neildavidson.com/download/dont-just-roll-the-dice/

yurylifshits 12y ago

Notes from another pricing workshop by Michael Dearing http://yurylifshits.com/post/52854299110/8-pricing-strategies-for-startups http://yurylifshits.com/post/52854299110/8-pricing-strategie...

suzyperplexus 12y ago

There are also a few quick videos on the Harrison Metal site itself: http://www.harrisonmetal.com/pricing_1/ http://www.harrisonmetal.com/pricing_1/

brokentone 12y ago

Unrelated... this video player and transcript integration is really, really nice. Did HeavyBit build some or all of it? I see the player is video.js

suzyperplexus 12y ago
Heavybit did build it. It was a team effort from Tim Nguyen, Tom Drummond, Dom Damian and Jason Harper.
timtdnguyen 12y ago
Tim here - Thanks brokentone! Glad you like it. We built a lot of it ourselves with some great tools. The player is video.js and we use popcorn.js to sync the transcripts, outline and player timecode. The video is transcribed and timecoded with Zencaptions and the transcoding is done via Zencoder. Let me know if you've got any other questions. Happy to help. Or better yet, shoot me an email: tim[at]heavybit.com. Right now we're working out some kinks with V1, but we're hard at work for the next version. Suggestions welcome. :)
- lambtron 12y ago
  Great work! Always wondered what the vibe masters were up to ;)
ameister14 12y ago
See, I immediately went to read it because the video was an overlay and I associate those with navigation tools, but was frustrated when the overlay turned out to be so large; I then deleted it without thinking about it and read the first paragraph before realizing it was a video. So, I think you should shift it down the screen, below the bio, and keep the effect you currently have where it moves with me as I read the transcript.
- timtdnguyen 12y ago
  Solid feedback. Something like this: http://cl.ly/image/333k431K233o http://cl.ly/image/333k431K233o

gyardley 12y ago

As an aside, I've got the Dualit toaster he talks so much about, and it's worth every penny. Attractively designed, built like a tank, lifetime warranty, easy to clean, and makes perfect toast.

dmourati 12y ago
Kudos for owning up to that. I think he may have been joking about owning it himself but then again maybe not.

j_s 12y ago

Rob Walling of Startups for the Rest of Us discussed the first of a two-part article on SaaS pricing¹ by Richard White of UserVoice in episode 153². The podcast also covered collecting billing info in episode 179³ and briefly discussed handling credit card expirations in episode 184⁴. ¹ http://500.co/2013/07/18/the-data-behind-purchasing-behavior-at-uservoice-pricing-for-conversion-part-i/ http://500.co/2013/07/18/the-data-behind-purchasing-behavior... ² http://www.startupsfortherestofus.com/episodes/episode-153-saas-pricing-tactics http://www.startupsfortherestofus.com/episodes/episode-153-s... ³ http://www.startupsfortherestofus.com/episodes/episode-179-when-to-ask-your-customers-for-credit-cards http://www.startupsfortherestofus.com/episodes/episode-179-w... ⁴ http://www.startupsfortherestofus.com/episodes/episode-184 http://www.startupsfortherestofus.com/episodes/episode-184

n00b101 12y ago

I think the following approach is more appropriate, at least for big business: http://www.rti.com/whitepapers/Dirty_Little_Secret.pdf http://www.rti.com/whitepapers/Dirty_Little_Secret.pdf

nodesocket 12y ago

So many great points and takeaways, but I think the following is key: "What matters is not so much the distance between the cost to produce something and the price to sell it. Focus on, the difference between the price and the perceived value to the end user. The perceived value has to be greater than the price! Don't build a business around cost + margin, build businesses around perceived value." Focus on the incentive to buy, not the incentive to sell for your business.

deleted 12y ago

[deleted]

Mz 12y ago

Okay, having managed to read most of it (I think -- my eyesight is crap and giving me fits today), for me, I think the important pieces are the bits about psychology -- about intuition and analysis (which I was already familiar with but not in this business related form) and the piece about loss aversion. I think those are really helpful for me, but more from a marketing or audience relationship point of view. For me, I am pretty clear that monetization will be indirect (like ad income, that kind of thing) so this is not so much about pricing for me. But my challenge is that initial intuition piece -- that piece I know of as a concept of "in the blink of an eye" what people think, as their first reaction -- tends to be pretty negative. And I have done a lot of retrenching to back out of that negative relationship as much as I can and I currently have a single person with positive interest and relatively little harassment (compared to what it once was). So, for me and the problems I am contemplating, these seem more like marketing ideas. Which is fine. But I am wondering now how I can apply those concepts to that angle and not pricing per se. But excellent piece. I forwarded it to a couple of people. Thanks for writing it (ugh -- video is a problem for me and the formatting of the transcript is kind of frustrating, FYI).

spitfire 12y ago

I'm in the process of figuring out a pricing model for a SaaS service right now and I watched this video in full. There's lots of interesting stuff in this, but in the end I am left no better off. For someone who is actually building a pricing structure now, it has nearly no actual value. I still do not know how to price my service, do I price per seat, per year based on a random number, per $FROBIT used, or a one time sale? I know I should price based on value, and my price should be less than the perceived value to my user. But I learnt that in my 10th grade business class. However, that said it was a very well done presentation, and once someone has a working pricing structure then these tools will be useful improve business outcomes.

patio11 12y ago
Hum a few bars about what your SaaS does for whom and I will happily napkin out a pricing structure for you. If you have no clue, for B2B SaaS sold on a low-touch model with the assumption you're not shooting for the VC->IPO track, just copy paste $49/$99/$249 into the bog-standard Three Column SaaS Pricing Page and offer 1 month free with an annual pre-pay.
- spitfire 12y ago
  Hi Patrick, wasn't expecting you to respond. But here it goes. I have a service which identifies which accounts will pay for accounts receivable. IE: collections agencies. Numbers show it can move the needle double to triple digits depending on the account mix. Right now, I'm planning on a per seat monthly subscription. Customers know how much they'll be charged each month, and I think it lets me focus on the value rather than community unit costs. EDIT: Just a note, unfortunately, this is a very high touch environment. The upshot being that once a customer chooses you, they never leave. Even if they're being outright abused. (I have stories!)
  - berberich 12y ago
    I recommend taking a look at this post, along with the rest of the site. Lots of great insights: http://blog.priceintelligently.com/blog/bid/198499/Stop-Per-User-SaaS-pricing-You-re-Killing-Growth http://blog.priceintelligently.com/blog/bid/198499/Stop-Per-... I believe it was Patrick who recommended that on Twitter the other week.