Frustrated by a billing system that requires many FTEs to run? Still not able to provide the pricing you want?
You are not alone!
Many are stuck with Stripe etc. that easily become 3D chess.
@richardkeuntje and I deep-dived in agile billing ->
https://t.co/XmBEzrwVwt
Discounting is a cancer on your growth.
"But our sales team says they can't hit their numbers without them!?"
Lies.
Here's data on how they hurt you more than help (and what to do instead).
A quick 🧵
Organic price points in software are an odd thing
Just renewed a Squarespace site for $250 a year and felt expensive
But it's just as valuable and important as a marketing tool we just renewed for $30,000
Context is a bigger deal in pricing that we sometimes realize
Water is free from the tap $3 at the gym $5 at the cinema and $10 at the airport so next time you think you’re not worth anything just remember you’re at the wrong place
And this is as true with a per seat model as it is with a per API call, but per API call can have significant variance relative to per seat.
we recommend usage tiers with lock-ins shaped around the budget for bigger customers 🤝
Usage based pricing has many incentives aligned and will continue to take share; however, when you move up-market, large enterprise organizations thrive on predictability.
They (ie procurement) are allergic to “unknown” cost structures.
Be very mindful of this.
We just had a game changing Office Hours with @pjdgallagher to improve our pricing strategy for our investor and startup clients.
If your startup is working on pricing - I recommend booking PDG to learn about price leveling, structure, metrics, add-ons, and packaging!
@ej_beehiiv @Mailchimp@HubSpot@beehiiv@sendwithloops@Braze@intercom Thanks for your comment :)
We did not say which value metric was "correct", just which correlates closely to value (i.e. why @Jason does not like "per contact")
there are customer-friendly methods to mitigate unpredictability that have been used for years
Have a good day!
1/ let's talk about value metrics.
the value metric (per seat, per contact, per send, etc.) matters more than the price level or package structure.
a good vm closely aligns with your customer's perception of the value of your product or service.
lazyweb: what's the more affordable version of MailChimp these days. paying $24k a year and not using it all that much (they charge you based on list size, which is insane)
Our Twitter subscriptions plan needs work @elonmusk.
I did a pricing study on 54.3k Twitter users to help you Doge Father.
TLDR:
- Verification should cost much less
- Twitter Blue should cost much more
- Twitter has a unique opportunity to 10x subscribers
Thread time 🧵
1. how to fail at monetization: start with a solution (square peg) and work backward to the problem (round hole)
2. how to succeed at monetization: start with customer segments with a clear problem and determine how to shape usage, features, and price around them.
this is 1.
IMO what Twitter should actually do:
Blue check for $8/month that means you're a real/legit person (ID verified). Get a bit of priority in search/replies and some premium features.
VIP "Gold check" that is free if you're a celebrity or expensive ($1k/month) if you're not.
PSA (Public SaaS Announcement): If you have "unlimited" *insert value metric* in any of your pricing plans, please know that you are capping your own growth relative to the value you are providing your customers.