

The Data Behind Purchasing Behavior at UserVoice – Part 2 - philippb
http://500.co/2013/07/19/the-data-behind-purchasing-behavior-at-uservoice-pricing-for-conversion-part-ii/

======
saturdayplace
Two points stuck out at me here:

> We formalized a process to enable our customer team (account reps & support)
> to give anyone trial extensions if they had a real need... folks that
> received a trial extension were 2.5X more likely to convert and 5X more
> likely to upgrade at some future point.

I'm glad there's data (at least for one company) to support what was always my
intuition. Many companies are hesitant to offer a trial extension, but the
cost of doing so in most cases seems absolutely trivial. Now that at least
some data is out there, perhaps more people will adopt this pattern.

> Another successful change was to change how we handled existing paid
> accounts that had a billing issue and were to be downgraded. In the past we
> would just downgrade those accounts to a Free plan, send an email and that
> was it. From talking to some customers we realized that some people would
> get downgraded and not notice that their functionality had changed.

I wonder, isn't there some way you could know ahead of time that the account
might experience billing issues and send them a warning email _before_ their
account is downgraded? Assuming you have their credit card information, at
least one issue you could anticipate is their card's expiration. As a
customer, I'd prefer the heads-up notice as opposed to something after-the-
fact. My takeway instead of "make it obvious when people are auto-downgraded"
would be, "prevent people from being auto-downgraded at all," if you can.

~~~
qeorge
"Many companies are hesitant to offer a trial extension, but the cost of doing
so in most cases seems absolutely trivial."

I totally agree with you that this is crazy. Not only is the cost trivial, but
you've potentially spent a ton of money to get them using your app! Recovering
this sale is unspeakably cheaper than acquiring a totally new customer.

The counterpoint could be that by asking for a trial extension, they've
clearly signaled that they value the product. Perhaps with a nudge they will
get out their credit cards.

But if the app is doing its job, they'll be more engaged at the end of 2
months, so it should be an easier sale and one month's revenue will come out
in the wash. This seems to match UserVoice's experience, where conversions
from this group were 2.5x higher.

------
pbreit
I feel like almost all SaaS pricing misses the golden rule of pricing: price
what the market will bear.

What I believe this implies is roughly 3 tiers: \+ $0 (maybe up to $10 or
$20/month) for bootstrappers & micro businesses \+ $10-500/month for companies
with a little bit of funding or a marginally profitable small business \+ big
bucks for well-funded or highly profitable companies

Then you design the packages based specifically on what those customer types
need. Try to avoid stopping out a user based on usage. Keep general features
available to all. The obvious features to vary in the tiers are those having
to do with administration which are a natural for larger companies.

