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Thank you for sharing your story > I’m taking my own advice to charge more, and re-aligning those numbers with actual customer behavior rather than the numbers

by chrisan 12y ago

Thank you for sharing your story > I’m taking my own advice to charge more, and re-aligning those numbers with actual customer behavior rather than the numbers I guessed four years ago. How do people normally handle this? 1) Take it or leave it price hike 2) Give a X month grace period before new price 3) Grandfathered in and price only changes if they need to upgrade 4) ??

unreal37 12y ago
Actually, I'm always disappointed to see useful software priced out of the reach of small businesses - and low priced plans disappear in 1-3 years after a cool tool launches. Visual Website Optimizer, Hubspot, Leadpages, etc all get priced out of the reach of people making less than $10K per month online because its more profitable to go after lawyers and accountants.
- siddharthdeswal 12y ago
  Visual Website Optimizer just introduced a $9 plan (I work there). I agree with your point in general, but the truth is most SaaS tools make far more profit when serving bigger customers.
  - unreal37 12y ago
    I didn't know that, and I'm happy to hear that. And I agree that it's more profitable to serve the bigger customers, but it's a shame nonetheless that I see things that I would love to try to use myself, and would pay for, just not worth $99 a month to me.
- ssharp 12y ago
  Optimizely just changed their pricing and only have free and enterprise tiers now. Their free tier is much nicer than you'd expect, as well.
- robryan 12y ago
  I think this has a lot to do with the 'do things that don't scale early on' mantra. Early on when these companies need to get some traction they will be more than happy to support the smaller customers. Later when they need to make many hires to support customers it is much better value to chase those bigger customers. That is assuming there is significant support cost.
saturdayplace 12y ago
While I'm not certain, I think most people go with option 3, and I'd put money down that's what Patrick's planning on.
patio11 12y ago
There's an easy answer in most cases: pre-announce the coming price increase and say "Anyone who signs up before then gets grandfathered in at that level for life." Boosts signups temporarily, avoids any blowback to customers who supported you early on, and has virtually no long-term impact to your pricing structure since, to a first approximation, as time approaches infinity all revenue for a SaaS company comes from people who are not currently customers.

by chrisan 12y ago

unreal37 12y ago

Actually, I'm always disappointed to see useful software priced out of the reach of small businesses - and low priced plans disappear in 1-3 years after a cool tool launches. Visual Website Optimizer, Hubspot, Leadpages, etc all get priced out of the reach of people making less than $10K per month online because its more profitable to go after lawyers and accountants.

siddharthdeswal 12y ago
Visual Website Optimizer just introduced a $9 plan (I work there). I agree with your point in general, but the truth is most SaaS tools make far more profit when serving bigger customers.
- unreal37 12y ago
  I didn't know that, and I'm happy to hear that. And I agree that it's more profitable to serve the bigger customers, but it's a shame nonetheless that I see things that I would love to try to use myself, and would pay for, just not worth $99 a month to me.
ssharp 12y ago
Optimizely just changed their pricing and only have free and enterprise tiers now. Their free tier is much nicer than you'd expect, as well.
robryan 12y ago
I think this has a lot to do with the 'do things that don't scale early on' mantra. Early on when these companies need to get some traction they will be more than happy to support the smaller customers. Later when they need to make many hires to support customers it is much better value to chase those bigger customers. That is assuming there is significant support cost.

saturdayplace 12y ago

While I'm not certain, I think most people go with option 3, and I'd put money down that's what Patrick's planning on.

patio11 12y ago

There's an easy answer in most cases: pre-announce the coming price increase and say "Anyone who signs up before then gets grandfathered in at that level for life." Boosts signups temporarily, avoids any blowback to customers who supported you early on, and has virtually no long-term impact to your pricing structure since, to a first approximation, as time approaches infinity all revenue for a SaaS company comes from people who are not currently customers.