

Ask HN: What and how would you pay for our service? - madflojo

Hello HN,<p>Over at Runbook.io we are looking at changing our pricing model and could use the communities advice.<p>We are an open source project built via https:&#x2F;&#x2F;assembly.com; which means that after costs of doing business, any profit made is paid to the community that contributes code&#x2F;design&#x2F;everything.<p>Financials: https:&#x2F;&#x2F;assembly.com&#x2F;runbook&#x2F;financials<p>While we have a few paying users the $1 per monitor price tag doesn&#x27;t seem to be enough to cover our costs long term, let alone enable royalties to be paid out to the contributing community.<p>So the question for the HN community is this, if we raised our price per monitor how much should we increase it too? The highest we have discussed is $9.99 per monitor per month. Would you pay that for our service? If not what would you pay?<p>We are also considering moving from a per monitor pricing structure to a tier based structure. Where you get x amount of monitors for y price.<p>So the second question regarding how to pay is this, should we keep it per monitor or move to a standard tiered based model?<p>Related links:
https:&#x2F;&#x2F;runbook.io
https:&#x2F;&#x2F;runbook.io&#x2F;pages&#x2F;pricing&#x2F;
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darbelo
My off-the-cuff assessment is that tiered pricing will probably give you the
most bang. This usually works better if you do it based on actual data of what
your users do, rather than random comments from HN, but my guess is that
you'll probably be able to segment into Hobbyists vs Small Businesses vs Big
Fish without too much problem.

Following up with a number out thin air, I would say that $9.99 is sounds like
a good ballpark for the lowest tier. Businesses should be willing to pay a
large multiple of that (Think 10x and up) for any solution that solves a real
problem for them, as long as you make the segmentation clear and market
accordingly.

OTOH, If you are really married to "unit" pricing you can kind of keep it by
giving each tier a fixed number of monitors/reactions plus the option of
purchasing extra monitors/reactions at a fixed unit price (different per
plan), but you should really look at actual usage data to figure out whether
it's worth it. In my experience, simple tiered pricing works better.

Also. Completely unrelated to pricing but it made me cringe when I saw it: If
I hit the call to action on the landing page I get to a form with a lot of
empty space around it and no indication of what follows. You should take
advantage of that empty space to make clear what will happen to me if I fill
out the form and hit the button. For bonus points you can point out some more
benefits, or a testimonial that takes down a common objection to signing up,
or whatever, but a simple bit of text saying "The next step will be like this"
should make a measurable difference in conversions.

My email is in my profile if you want me to spout some more random unsolicited
advice at you.

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taprun
Here are a few things which come to mind when looking at your pricing:

* Your pro package is too cheap. If you're in the DevOps market space, I'm willing to bet that 99.99% of your potential customers would be as willing to spend $10 per month as $1 per month. If you can demonstrate a savings of one man-hour of labor per month, you could probably charge $100/month without too much difficulty. * Your pro package is too expensive. As a recent guest to your site, the free and the pro plans look very similar in terms of benefits. Why should I go to the trouble of whipping out a credit card when I can be lazy and just use the free plan that looks almost as good? My guess is that you have a bunch of freeloaders who will never convert to paid either because they are cheap or they don't need any additional service. * It's not clear what the benefit of your system is to your users. On the front page of your site, you should have a clear explanation of how a customer's life would be better if they gave money to you. You're assuming that your entire audience not only knows what IFTTT is, but you're also creating a dependency on IFTTT to explain the benefits of your own product.

As a first shot, I'd try to think of the types of users who would benefit from
using your product.

You could tier by many different characteristics - response time, monitors,
types of reactions, monitoring intervals - even access to https. If you can
break down your potential customer groups by willingness and ability to pay,
you'll have a better idea as to which characteristic(s) should change from
tier to tier.

I have a free chapter up on customer value that you might help -
[http://taprun.com/pricing](http://taprun.com/pricing)

~~~
madflojo
Thats good advice though one part confused me. Are you saying our pro package
is too cheap or too expensive?

Right now the main difference between our pro and free accounts is the number
of monitors available. With free you can only have 2 whereas with pro there is
no limit except that each monitor costs.

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phantom_oracle
Firstly, I disagree with the _Assembly model_ , but that is another discussion
for another day.

Salesman rule for product pricing (something I need to adopt myself): price
your product at a cost that is similar or cheaper to your competitors.

Go cheaper if you have less features, but keep adding more and you can
possibly steal away customers from your more expensive competitors.

If you have no competitors, your client-base and their usage should've given
you an indication of where to start pricing.

Companies pay ridiculous amounts for things as trivial as chatrooms, so if
you're automating away DevOps/System-Administration, you can charge a decent
chunk of change that will come cheaper than say $4,000 per month for a senior
system administrator.

I've also heard of a theory where if a product is _too cheap_ , some companies
feel that it is a weaker/inferior product.

For any startup/side-project type person, create a special tier where you reel
them in and hook them onto your services. Paying $25 per month to monitor
servers 24/7 and avoid downtime[1] is an asset for 2/3-man teams.

I also agree with taprun about the free tier. Would you run RunBook on that
free shared-webhosting site?

There's tons of people who would like things that aren't free to be given for
free. This is called "free-riding" in economics and you are basically
swallowing their costs. IMO, giving the source-code away for free is good
enough.

Create a trial period and have a pay-only service.

You'll end up on-boarding shitty customers (which are probably at +10 to 1 of
your paying ones).

[1]: Like everyone else, I don't actually know what your service provides
(clearly). To me it seems like an automatic server-monitoring service that
detects and tries to fix errors.

~~~
madflojo
Thanks for the thoughts, I'll have to think pretty heavily on the pay-only
service. There are many companies out there that have done well with a try
before you buy model.

You make a valid point with the fact that we have already open sourced our
product so a free tier is giving away even more.

> Companies pay ridiculous amounts for things as trivial as chatrooms, so if
> you're automating away DevOps/System-Administration, you can charge a decent
> chunk of change that will come cheaper than say $4,000 per month for a
> senior system administrator.

So very true. I guess when you put it that way $1 per monitor is a pretty low
price and I think you're right we may just be going too cheap and labeling
ourselves wrong.

> To me it seems like an automatic server-monitoring service that detects and
> tries to fix errors.

Yup, that is exactly what it is.

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dangrossman
Somewhere in the range of $99-199 per month per server/host, with unlimited
monitors on each server. This kind of tool is in a similar place market/value-
wise as NewRelic, IMO, which has that kind of pricing.

~~~
madflojo
Thanks, that helps a ton with a future direction where our monitors are server
based. What we have right now is all external monitors. Think along the lines
of Pingdom but a lot more types of monitors.

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iqonik
This reminds me of the discussions between Tarsnap and Patio11 - basically,
charge more and create tiered pricing. Even if the only difference between one
of the tiers is having your phone number.

I will need 4 monitors when my project is complete and I would happily pay $49
per month for that peace of mind.

~~~
madflojo
Ok so you would be fine with 9.99 a monitor but more likely to buy if it was
in a tiered package. Thanks!

~~~
iqonik
Honestly, if it was 9.99 a monitor, i'd try and make do with one / fine a way
around paying for more. Just the hacker in me I guess ;)

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arsalanb
Okay, wow. Where can I see some screenshots/demo? I'd like to pay for this
right now.

~~~
madflojo
Right now we don't have any demo, but you can sign up and if you like it you
can choose to upgrade. Upgrade gives you more monitors and more intervals but
everything else is the same between free and non-free accounts.

~~~
jlgaddis
I'd like to see it as well (screenshots would be fine, a demo better, of
course) but I'm not going to bother taking the time and trouble to sign up
just to be able to see if I might like it.

I realize I'm only a single person but I would think many others are the same
way so it would seem that you're unnecessarily putting up roadblocks to
acquiring customers.

~~~
madflojo
Thats fair, I'll make sure we add at least screenshots in the future.

