A Rule of Thumb: Pricing Should Be Simple
daringfireball.net
A Rule of Thumb: Pricing Should Be Simple
1–10 of 28 posts
Re: A Rule of Thumb: Pricing Should Be Simple
#2I definitely agree that pricing should be simple, but it isn't everything. It's also important that the pricing reflects the value of the options.
I worked on a project for a large SW company, and even though they had a simple pricing plan, one of their products wasn't taking off. But when we did some shopping and called in to their reps, none of them could clearly articulate why I would want to buy the higher tier product compared to the middle tier, and they even seemed the same on the website. The pricing was simple, but I had no idea what I would be getting in addition if I spent more money.
Contrast this to the iPad example, where I know exactly what I'm paying for. Every $100 increases my storage, and another $130 gets me 3G. It's very clear. I think cell phone plans are a great example of pricing that's complex, but easy to understand because the value is clearly communicated (every $X gets me X minutes). It's easier to make these decisions if I know what I'm paying for.
Re: A Rule of Thumb: Pricing Should Be Simple
#3I definitely agree that pricing should be simple, but it isn't everything. It's also important that the pricing reflects the value of the options. I worked on a project for a large SW company, and even though they had a simple pricing plan, one of their products wasn't taking off. But when we did some shopping and called in to their reps, none of them could clearly articulate why I would want to buy the higher tier p…
You really think that your cell phone plan is "easy to understand"? What's your monthly bill going to be this month? I'll bet if you guessed each month in advance you'd never get it right. My bill's usually within about 10% of what I expect... until it's not and I get the pleasure of spending an hour on hold trying to figure out what changed without my say-so. This fuzziness means I'll never be comfortable buying anything from a cell provider, and so I'll never sign up for the $3 roadside assistance, or the $10 replacement warranty, or whatever.
OTOH, when I click "buy" on that 99¢ app I know I'll be billed exactly $1.07 (sales tax), not a cent more or less. A
Apple's completely nailed making me comfortable buying stuff from them. AT&T and Verizon haven't. Guess who gets my disposable income and who doesn't?
Re: A Rule of Thumb: Pricing Should Be Simple
#4I definitely agree that pricing should be simple, but it isn't everything. It's also important that the pricing reflects the value of the options. I worked on a project for a large SW company, and even though they had a simple pricing plan, one of their products wasn't taking off. But when we did some shopping and called in to their reps, none of them could clearly articulate why I would want to buy the higher tier p…
You really think that your cell phone plan is "easy to understand"? What's your monthly bill going to be this month? I'll bet if you guessed each month in advance you'd never get it right. My bill's usually within about 10% of what I expect... until it's not and I get the pleasure of spending an hour on hold trying to figure out what changed without my say-so. This fuzziness means I'll never be comfortable buying any…
No I don't. As mentioned above, I think cellphone plans are incredibly complex. But typically it is clear what the difference is between the $40 plan and the $50 plan (usually some amount of minutes). I know I pay $30 for data. I know I pay $15 for texts. At least I know what I'm getting, and I can decide if I want to spend the money. And even when they're wrong they typically have some sort of basis for what they're incorrectly charging. In the software company example I gave above, even their own sales people could not articulate why I should pay for the higher product / what I would get.
And for what it's worth, my monthly bill is usually the same with Verizon. I did however have those same headaches when I was on AT&T.
Re: A Rule of Thumb: Pricing Should Be Simple
#5Although the point about simple pricing might have been an overwrought Apple-specific intro, the real point is: dayum, what was NYT thinking with this weird, expensive pricing structure? And not even a discount for getting both subplans together?
Re: A Rule of Thumb: Pricing Should Be Simple
#6Although the point about simple pricing might have been an overwrought Apple-specific intro, the real point is: dayum, what was NYT thinking with this weird, expensive pricing structure? And not even a discount for getting both subplans together?
Wait... You're complaining that Gruber is putting an Apple angle on one of his articles? Do you also complain that water is wet darnit?
Re: A Rule of Thumb: Pricing Should Be Simple
#7I definitely agree that pricing should be simple, but it isn't everything. It's also important that the pricing reflects the value of the options. I worked on a project for a large SW company, and even though they had a simple pricing plan, one of their products wasn't taking off. But when we did some shopping and called in to their reps, none of them could clearly articulate why I would want to buy the higher tier p…
You really think that your cell phone plan is "easy to understand"? What's your monthly bill going to be this month? I'll bet if you guessed each month in advance you'd never get it right. My bill's usually within about 10% of what I expect... until it's not and I get the pleasure of spending an hour on hold trying to figure out what changed without my say-so. This fuzziness means I'll never be comfortable buying any…
I have a simple cell phone plan. It's called Ben (http://www.ben.nl) and it's a subsidiary of T-mobile in the Netherlands that's historically (since the 90s) been the simple cell phone plan provider.
Here's what I pay: €3/month for 50 minutes or texts and €9.95 for unlimited data. If I go over, I pay a premium of €0.25 for each minute/text I go over. Simple.
It can be done!
Re: A Rule of Thumb: Pricing Should Be Simple
#8So, first he talks about how simplicity of pricing is key. Then he describes how an Apple Ipad, with about a dozen different prices depending on what you want, is simply priced. Then he describes how the New York Times, which has only one price that most people will ever care about ($15 for unlimited web access), is unsimply priced.
True brilliance.
Re: A Rule of Thumb: Pricing Should Be Simple
#9So, first he talks about how simplicity of pricing is key. Then he describes how an Apple Ipad, with about a dozen different prices depending on what you want, is simply priced. Then he describes how the New York Times, which has only one price that most people will ever care about ($15 for unlimited web access), is unsimply priced. True brilliance.
There are 6 prices for iPads. 16/32/64 Wifi. 16/32/64 3g.
I would say people would care about the other NY Times plans. I would personally much rather use a NY times App on my iPad (Which would mean the $20.00 plan) versus using it on my iPhone. But if I wanted to use both apps, it would cost $35.00. It's cheaper just to get the physical paper delivered to your house.
Re: A Rule of Thumb: Pricing Should Be Simple
#10So, first he talks about how simplicity of pricing is key. Then he describes how an Apple Ipad, with about a dozen different prices depending on what you want, is simply priced. Then he describes how the New York Times, which has only one price that most people will ever care about ($15 for unlimited web access), is unsimply priced. True brilliance.
Well, the iPad's pricing is relatively simple to figure out: $499, plus $100 for every storage increase after that. If you want 3G, that's $130 extra.
The New York Times, on the other hand, seems less logical. The website+smartphone app is $15/4 weeks, the website+tablet app is $20, all three is $35, so the website is worth... nothing? Or, you could go with the home delivery option, which would cost you $455 (all digital access) -$304.20 (daily delivery in NY) = $150.80 less per year, even though they have to print all that paper.