I just want to say thank you to Alex Turnbull for writing about all the things they've learned at Groove. It's incredibly helpful and insightful to read.
Thanks for the kind words :) Glad you're digging the series!
The Pricing Model That Increased Our Free Trial Signups by 358%
21–30 of 39 posts
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#22I'm sorry if I am not seeing this clearly, but did you change the pricing model? All I am seeing between Test #2 and Test #3 (the succesful one) is that you drop from $150 to $15. The $150 was the Unlimited Plan, and now you have all that for $15. All I see is price lowering instead a diff price model. I apologize if I am wrong.
$150 was for unlimited everything including agents. New pricing is $15/agent.
Oops, sorry. Makes sense now. Thank you.
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#23I'd be a little careful here. I've personally dealt with the situation of creating a "customer-pleasing" revenue model, only to have to change it a year later because it was leaving way too much money on the table. It was a horrible process that resulted in losing a lot of customers. While we did eventually successfully make the transition, I think all of us wished we hadn't just said "oh if this takes off that will be a great problem to have". You don't want to A/B test your core business model unless you are very confident it is going to work long term.
Obviously, it is important to pick a business model that people will pay for, but it is also important to make sure that business model is going to support your business properly long-term.
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#24I'm confused. Your customers wanted to pay per ticket, but you wound up going back to the industry-standard of paying per agent. What gives?
I've been through this same exact price confusion with customers. They told us they wanted to pay a la carte, but when we tested it they very much did not.
I think the psychology makes sense. When they told us they wanted to pay on a pay per use basis they based that completely on the past. They did the basic math. Last month I did 16 tickets. At $.25 a piece I would have paid $4! That's what I want to pay!
When faced with a future purchase decision, however, the mindset immediately changed. Now the decision was unbound. What if in three months I get to the point I have 1,000 tickets?!??! My god, now it's $250/month. That's crazy expensive! That fear caused a lot of issues.
So we tried the logical next step. $.25 per use, capped at a certain dollar amount ($25/month). That was too complicated to understand.
So we just started charging a flat $25/month (sales-leads fwiw). That worked really well.
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#25I would really like to see a comparison between this flat fee per "unit" (in this case users) model vs tiered pricing based on the number of these same "units", where the "unit" is one that will be predefined and remain mostly static.
So in this case, something like "$15 per user" vs "$39 for Can anybody share such a study?
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#26Good lessons:
* Make pricing easy to understand
* Don't make customers guess how many widgets they'll need
* Don't make customers afraid they'll run out of widgets or need to pay a different amount later
* Convince customers that tier X has everything they'll need and is cheap and easy
In other words, make the checkout funnel as smooth and frictionless as possible.
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#27This is content marketing done right.
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#28Cool writeup. I don't know much about this market, but the Competitor Pricing Comparison Chart shows them undercutting the others on price so much that I'm wondering how much money they're leaving on the table. Hopefully as time goes on they'll have enough differentiation that they don't feel the need to compete on price any more.
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#29This doesn't sound like the complete set of metrics that should be measured. Surely, the key thing is how much money each model made? What is the average revenue per user in either case for those users converted? Later on the average lifetime value of a user in each model is needed (plus the cost to get and convert them). Yes, conversion is part of the equation, but this feels like a vanity metric on its own. Just so…
I'm OK with optimizing this single step in the process. Things can change so much elsewhere that it's rarely all that prudent to perform a more complete analysis as you suggest, especially for a young, high growth service/company.
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#30Have you considered freemium (or close to freemium, like Zendesk)? That would be interesting. My sense is there are three audiences: those who want to pay nothing or close to nothing, those who will pay a little and those who will pay a lot.
And this is based primarily on their financial situation, not needs or aspirations.