opportunity__cost

Do Not Piss Off Your Customers

The Chargify Twitter account has been responding to complaints all day, and the change has sparked a popular thread on Hacker News. Chargify has responded to the negative feedback by announcing the addition of a ‘Bootstrapping’ plan, which runs $39/month for up to 100 customers and will only be available to Chargify users who signed up before today. But anyone relying on a free plan is out of luck, and it’s not trivial to make the jump from one payment system to another.

...

Chargify isn’t the only company in this space that’s had to change its pricing model. In March Recurly, which launched with pricing based on per-transaction fees rather than a monthly rate, moved to a flat-rate model. And, as you’d expect, some of its customers weren’t pleased.

via techcrunch.com

My take on this is simple. You should keep your customers happy. You should find the right words or right customers, either one is okay. However, do not take an existing mass and throw it against the wall.

In this specific case, they had to run a long enough campaign to keep early adopters happy, and make the transition smooth. If the new customers who are unhappy but never bothered to take any steps during that campaign to secure their discount or free spot - well, shit happens, move on - however, do not screw up legitimate and loyal users ever.

Experiments in lean pricing

I strongly feel that, especially for SaaS products, starting with free and figuring out premium later (all too common) is backwards. If you know you are going to be charging for your product, start by validating if anyone will pay first. There is no better success metric and it leads to less waste in the long run. Focusing on the premium part of freemium first lets you really learn about your unique value proposition — the stuff that will get you paid. You can then come back and intelligently offer a free plan (if you still want to) with more intelligence and the right success metrics clearly defined. Even if you think you have a one-dimensional pricing plan like I did (e.g. number of projects), you’d be better served testing it with paying users because pricing experiments take a much bigger toll than other types of experiments

via venturehacks.com

Great guest article by Ash Maurya, who went thru and telling about his experience with pricing experiments and how valuable can they be. Although I'm not very agree that free-to-paid approach is backwards most of the time, he's still very right that putting out your original intentions to charge is a great way to start working on your pricing scheme.

Do Not Piss Off Your Customers

Experiments in lean pricing

About Olexandr Prokhorenko

Search Blog

Tags