
What I Learned From Increasing My Prices - kanamekun
http://www.extendslogic.com/business/what-i-learned-from-increasing-my-prices/
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j45
Great post, way to walk the walk about the scary thing called making money
with your startup.

An aside, posts like this make me wish hn had a separate section/tag simply
called 'results', separate from opinions.

I enjoy the variety of geek-interested content here, but this kind of a post
for me is real signal.

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orangethirty
Thanks for sharing.

I don't think it was much the raising prices part, but the re-branding your
product to resonate with the market. This is something a lot of people out
there don't get. That is why you don't purchase used BMWs anymore, but
certified pre-owned BMWs. The branding is very important. The awesome thing is
that you went and took a structured approach to it, and then used the data to
re-focus your brand to the market that will buy your focus. The money will
continue to pile on if you keep using such approach. I would suggest looking
into offline marketing tools to broaden your horizons.

Good luck.

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rubeng
I tested increasing prices without touching anything else and it resulted in
significant revenue increase but I hit a local maximum as the segmenting was
off and value communication needed to be improved. The right branding with the
wrong pricing can actually hurt so it's extremely important to get both
pricing and value messaging (including the qualitative stuff) right.

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orangethirty
The brand and the price are not separate entities. The brand is the entity and
the price is a property of the brand. If you change the price you modify the
brand, but if you change the brand you completely change the price.

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thibaut_barrere
I cannot find a clickable link to the author's product on the blog post. I
think you are leaving money on the table right now!

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rubeng
Author here. Thanks for mentioning that; I've gone ahead and added a link.

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yurifury
"Create professional client proposals in minutes" on your front page is very
blurry, and detracts from the otherwise nice design.

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eps
And that's, ladies and gentlemen, how you brag about having a Retina display,
geek style.

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Lockyy
I'm not on a Retina display and it is blurry for me as well.

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codegeek
I really liked reading this. Giving relevant names/titles to pricing tier can
be very effective. I immediately understood the diff. b/w freelancer vs studio
instead of saying Basic vs Premium.

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DeepDuh
I think the naming might have yet another effect: Customers now feel an
association to one of the tiers. For a studio customer to buy the 'freelancer'
tier might feel unprofessional / dishonoring. I'd like to know how much effect
just the naming alone has vs. the price / feature changes.

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rubeng
I had more people signing up for the higher tier plans when I a/b tested the
plan names. Don't remember what the numbers were exactly but it was
interesting to see behavior change because of the plan names.

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KevinUK
I've wanted to a/b test my plan name but don't know of any good alternatives.
I have a free WordPress plugin and have a paid-for version which adds more
features so it's called generically 'Premium version'.

The people who buy it come from different backgrounds and I don't want to
segment the product.

It's a recipe plugin and the premium version adds a nutrition tab to satisfy
the nutritionists and category listing pages for people who want to organise
their recipes more than what the free version allows.

Any thoughts on a name?

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DenisM
Don't take it the wrong way, but you're trying to squeeze your users into the
rigid frame of your preconceived notions about who they are. Changing people
is a very difficult job. I understand you put a lot of effort into your
product and feel entitled to steer it as you see fit, but it's far more
productive to do what the topic post suggests - ask the users who they are and
what they care about. In other words, reconsider your decision not to segment.

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hrabago
I appreciate the insight about naming the segments. It reflects on "benefits,
not features" where you describe what you offer based on the context of the
user, not the context of your application.

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ARobotics
Great post. One thing that wasn't clear to me - how did your pricing changes
affect existing customers?

Did former "basic" accounts get automatically changed to "Freelancer" and
start getting billed the extra $10 the next month? If so, how did you handle
notifying users and was there much complaint about the change?

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rubeng
I grandfathered existing customers in so they still have their existing plans.

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zargon
This is not only the right thing to do, but you may notice higher retention
rates in the grandfathered group. Now they're getting a great deal and may be
reluctant to cancel.

I have a forum membership grandfathered at $8/mo from when I subscribed 7
years ago, which over the years has gone up to $50/mo for new members. Even if
a few months go by where I don't visit the forum, I'm not going to let that
thing lapse. :)

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zumda
A very interesting post! Thanks for sharing that!

I have one question though: Did you grandfather your old customers in? So you
still charge them the old price and give them all features?

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abhaga
Seems like. From the post:

> All I did was change pricing for new customers in the backend and updated
> the marketing site to reflect the new pricing tiers.

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haydin
Honest question: Is sending an e-mail just to show a sample somehow more
efficient? Why not just provide a link to the sample? I tried 6 times to get
an e-mail sent and finally got one on the last try. Almost gave up.

Edit: No, I still don't have an e-mail and no information as to where I can
find a sample

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rubeng
Sorry about that. What happened when you submitted the form? Did you receive a
confirmation message saying that you'll receive an email? If so, you might
want to check your spam folder in case it made its way there for some reason.

Two reasons for the email: 1. Marketing purposes. So I can send additional
educational (and hopefully useful) content. 2. I actually take the name and
email address then dynamically create a PDF proposal using that information on
the cover page.

The execution is a bit sloppy as it was an experiment and quickly put together
so I'll need to work on improving that now that I'll be keeping it.

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DenisM
Interestingly, raising or lowering prices for iPhone apps have not changed my
revenue in the slightest. I wonder if that tells us anything about the iOS app
market?

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zobzu
i think its simple and recurrent:

\- have clear names, not stuff that "sound trendy like blehmium"

\- price by comparing market prices and the targeted customer (hint: its the
basics at business schools). Aka niche market? high prices. Large
distribution? Low price. And there's many middles. Just don't start thinking
you should "ask zillions" or "make it super cheap".

Think first.

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spiredigital
Raising prices a few years ago with my eCommerce site lead to an instant 30%
increase in profits, so it really is powerful and is something that has the
potential to do amazing things for your business. Great post, and
congratulations on all your new dough!

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djt
(off topic but thought others might be interested)

What is the difference between BidSketch and Quoteroller?

I ask because i tried a trial of Quoteroller and it didnt work and had never
heard of your site before now.

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wesbos
getting a timeout when I try send myself a sample.

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rubeng
Sorry, just restarted the service. Thanks! I need to add monitoring to that
service since it's now past the experiment stage (was being tested against a
video at one time).

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Samuel_Michon
Gateway timeout for me as well, but I love how after hitting the submit button
on the form it simply redirects to the page where the samples are at. That way
I don't have to wait for a link to be emailed, saving me a couple of taps. (I
actually felt a little duped — I was expecting some kind of dynamically
created URL; I felt silly for not have simply guessed
'samples.bidsketch.com'.)

The site looks great and the plans are very clear; if the service itself is
anywhere as good, I'll be signing up for sure.

EDIT: page loaded. Turns out that I _do_ have to check my email: "Your
template is on its way! Please check your email for the proposal in a few
minutes." That's too bad.

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bm1362
Seems the sample is timing out- just an fyi.

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rubeng
Should be good now, thanks!

