I've been following these posts and they've been really helpful, so thanks for writing them up. But when A/B testing your pricing model, what are you supposed to do for the customers that signed up for the now-defunct service prices?
The Pricing Model That Increased Our Free Trial Signups by 358%
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Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#32I'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?
Sometimes you have to read between the lines as well.... how many of the customers wanting to pay per ticket had signed up as a direct result of the first promotion which offered the ability to pay per ticket starting at $1?
Plus a chart that shows you significantly cheaper than three competitors is always a good incentive for some people to get the credit card out.
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#33I'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…
Did you not grandfather your existing customers' plans?
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#34I'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 face…
I think this is an example of the Simulation Heuristic, but I may be misunderstanding it.
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#35Tangential comments:
1. The pirate theme, and the fact that each blog post has it's own well-done image are freaking amazing. I also love the sand effect (on the homepage laptop too). Made me instantly feel good about your brand, and I went to the home page thinking, "Hey we already use Help Scout but maybe we should try this out", even though we are completely happy with Help Scout and I had no real good reason to even think of switching... you still got me.
2. All of that was completely undone by the two screen-invading modal windows with sleazy tricks like not having an obvious "get the fuck out of my way you annoying piece of shit" button. One on the blog itself (which pops up before I even start reading your post) and one on the homepage. I'm even surprised that ESC worked, but thank god it did. Thing is I actually really wanted to read your article, and send it out to the team, but now I feel like I don't really want to help a company that uses slimy tactics. I still will though because the title fits so perfectly with what we're working on.
3. Oh fuck me, while writing this comment another one popped up on a really delayed timer. Never mind, no longer reading.
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#36I've been following these posts and they've been really helpful, so thanks for writing them up. But when A/B testing your pricing model, what are you supposed to do for the customers that signed up for the now-defunct service prices?
Indeed. Do you offer them a (possibly rebated) way to change to the per-agent model, or do you keep supporting the legacy per-ticket mode?
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#37Looks like they jumped from too complex - 6 options - to throwing segmentation (http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...) out with the bathwater
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#38I urge you to purchase and read The Strategy and Tactics of Pricing [0]. You are making a number of mistakes, not the least of which is to use low pricing as a differentiator. Bad idea. You've landed yourself on a potential slippery slope that can be devastating. I doubt your current competitors will follow you down. They are likely not suicidal. However, your position is easily attacked by anyone willing and able to take a dive for the weeds (in terms of pricing). Product being reasonably equal, the lower price wins. Customers nearly always want to pay as close to zero as possible.
I see a lot of "we had this revelation" type posts on HN. Perhaps this is a side effect of a younger, less experienced membership. A lot of these things are nowhere close to revelations. People --many people-- have trenched these paths before you. Anyone with a reasonable amount of business "street" experience could have told you that giving away EVERYTHING for a low price would convert better. What you need to do is optimize profit per unit and segment the market in order to maximize that function. The other thing you are doing is colloquially referred to as "leaving money on the table".
The pricing field is deep, wide and complex. The suggested book is one of many I studied over the years. For a number of years one of the most frustrating aspects of entrepreneurship for me was having to read piles of business books to understand what the hell I was supposed to do. Engineering school does not prepare you for this.
[0] http://www.amazon.com/The-Strategy-Tactics-Pricing-Profitabl...
Re: The Pricing Model That Increased Our Free Trial Signups by 358%
#39I urge you to purchase and read The Strategy and Tactics of Pricing [0]. You are making a number of mistakes, not the least of which is to use low pricing as a differentiator. Bad idea. You've landed yourself on a potential slippery slope that can be devastating. I doubt your current competitors will follow you down. They are likely not suicidal. However, your position is easily attacked by anyone willing and able to take a dive for the weeds (in terms of pricing). Product being reasonably equal, the lower price wins. Customers nearly always want to pay as close to zero as possible.
I see a lot of "we had this revelation" type posts on HN. Perhaps this is a side effect of a younger, less experienced membership. A lot of these things are nowhere close to revelations. People --many people-- have trenched these paths before you. Anyone with a reasonable amount of business "street" experience could have told you that giving away EVERYTHING for a low price would convert better. What you need to do is optimize profit per unit and segment the market in order to maximize that function. The other thing you are doing is colloquially referred to as "leaving money on the table".
The pricing field is deep, wide and complex. The suggested book is one of many I studied over the years. For a number of years one of the most frustrating aspects of entrepreneurship for me was having to read piles of business books to understand what the hell I was supposed to do. Engineering school does not prepare you for this.
[0] http://www.amazon.com/The-Strategy-Tactics-Pricing-Profitabl...