

Pricing is hard.  We need your help. - dorkitude
http://blog.keen.io/post/32269955563/pricing-is-hard-we-need-your-help

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ljd
Because your customers are going to be more technical I would do the utility
pricing. Pay per unit of usage.

If you need help with pricing, email me. Our company does algorithmic pricing
via a REST API, I'll give Keen access for free.

To address your listed cons to utility style pricing:

1) Products aren't turned into a commodity because of how they are priced.
They are commoditized when many perfect substitutions exist in the market.

2) I'm not sure if "not predictable" will go over well with your audience.
Maybe you could use your own product to help people predict their bill with
you. It would be a neat application of your software.

~~~
akavi
You _vastly_ underestimate the value of predictability in billing to a
business's "Chief Fretting Officer".

If you asked companies if they'd rather pay a random amount between 100$ and
500$, or always pay 500$, 9 out of 10 would opt for the latter. And if you
don't understand why, then you've never spent any amount of time pondering a
business's cash flow.

~~~
codegeek
"pay a random amount between 100$ and 500$, or always pay 500$, 9 out of 10
would opt for the latter"

Why so ? You are perhaps referring to a business's ability to project/forecast
cashflows which is critical but even then, if the number is always going to be
less than or equal to 500, I would rather choose the first option.

~~~
patio11
At my old day job, my boss _literally_ instructed me to pay $200 rather than
rand(10..40) because otherwise he would have been committing to a minute of
work every month updating an ERP entry. Plus, not _his_ money, but certainly
his minute...

~~~
grueful
New pricing strategy: the low-end tier is metered.

That's also a big argument in favor of formulating seat-based pricing models
as blocks as opposed to per seat. It reduces the update frequency.

~~~
ovi256
Metered low-end looks similar to what AWS does, doesn't it ? Spot prices are
metered, but if you want to get a flat fee per month, no worries, you can get
the reserved instances. Which also have a better bang per buck.

~~~
rmc
reserved instances aren't totally flat fee. Reserved instances allow you to
pay a fixed cost up front for a reduction for the rest of the month.

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le_isms
It would be nice to have an explanation of what Keen.io does in the article.
Actually, even after browsing your site I still don't have any idea what you
guys do, besides collect data and visualize it. There also doesn't seem to be
any indication of -how- you guys do visualization. It's hard for me to think
about pricing for your service when I have no idea what you offer.

~~~
dorkitude
Good point. We're not released yet, and there are probably < 100 people who
have a good enough idea of what we're doing to really dig in and give us
feedback

We'll edit the blog post to add a bit more background

update:

here's the working copy:

\--

We make three kinds of APIs:

    
    
      -data collection APIs
      -data analysis APIs
      -data visualization APIs
    

For instance, if you had a social-local-mobile shopping app for the iPhone,
you'd probably want to insert a rich event into Keen every time a user does
one of the following actions: opens the app, does Facebook connect,
likes/comments/shares an item, adds an item to their shopping cart, and
completes a checkout. You send us this data using the _collection APIs_
([https://keen.io/static/docs/data_collection/data_collection....](https://keen.io/static/docs/data_collection/data_collection.html))

Once your app is sending us stuff, your product manager may ask you to make
her a little analytics dashboard, so she can agonize over it every morning.
For instance, this dashboard could have answers to questions like "How many
people opened the app each day over the course of the last week?" That
question (and many way more advanced ones) can be answered using one of our
_analysis APIs_ (in this case, the Series API
<https://keen.io/static/docs/data_analysis/series.html>)

Finally, suppose a few weeks later she's tired of staring at numbers and wants
to see this information graphed visually in a line graph. That can be done
using our visualization APIs (not yet released).

~~~
rgraham
I think the what here might be less important than why for pricing. It's easy
to get a sense of your platform from your website, but who is your target
customer and why are they paying you? Does this save them time? Money? Make
them money? Got any scenarios or customer sketches?

~~~
kirkers
(Disclosure: I wrote the post)

These are all great questions. Thinking long-term, the answer should be yes to
all of those questions. We should save time (and therefore money) and be a
vehicle for increased revenue. And, we intend to do a lot more writing about
how folks are using/could use/should use our product. At the same time, in the
long run, we’re all dead. So, in the present, we’re looking to work with
Series-A type companies who are in the midst of early product development. We
want to work alongside them to understand their analytics needs and tweak our
roadmap accordingly.

Those customer sketches/white papers are extremely important to us. We’re
still learning (and probably always will be). It’s my hope that we will be in
a position to blog about customer experiences soon. Dominos are certainly
lining up for that.

~~~
michelleclsun
_who is your target customer and why are they paying you? Does this save them
time? Money? Make them money? Got any scenarios or customer sketches?_

In addition to these questions, I'd also think about how to reach a point
where customer feels a high switching costs. It seems that a service like
yours can be offered by many, but the important competitive advantage is that
the more customers have stored data on your service, the more 'expensive' for
them to switch.

What part of your service increases in value the longer someone uses it? Is it
the historical data of the customer's own app, or is it the cross-sectional
data of apps in other categories? As mentioned above, mixpanel is a good
example, so is new relic.

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JoshTriplett
Whether you price by usage or have tiers, always do value pricing, not cost-
plus pricing.

~~~
eldavido
Agree; it's most in line with what the customer wants, facilitates
segmentation in a way that's fair to both parties involved, and allows
upselling when material changes in product or service take place.

Even if you use utility pricing, it's still best to frame it in terms of
something meaningful to your customers.

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reubenswartz
I've helped a number of companies put together pricing plans, and the first
thing I usually say is "talk to your customers", so it's great that you are
already doing that. However, the real question is not "how should I price
this?" but "why is this awesome to you? (what is the value?)" You should
absolutely price based on value-- if your value is greater than your cost, you
can win. If not, you need to fix something. If you don't know what that value
is, spend your time there, and the pricing will flow from that. As mentioned
by others, you can always grandfather existing customers if you decide to
change.

(That said, I'm guessing that simple tiers + custom enterprise plans if needed
will be the way to go. The trick is figuring out how to set them up.)

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jlarocco
I think the description of what you do is just too vague to give any feedback
on how to price it. "collect, analyze, and visualize" data could mean almost
anything. I even browsed through the docs and couldn't figure it out.

Do you have a full blown example use case of how a customer would use keen.io?

The getting started page shows an example of inserting an "event" and counting
it, but I'm not sure what that means, or what the end goal is, exactly.

~~~
dorkitude
We updated our description to make more sense and include an example

What do you think of it?

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waterside81
Our pricing at Repustate.com is fixed fee for a fixed quota of API calls.
Usage-based billing sucks because of the unpredictability on both sides, plus
it makes invoices much easier for us. Like others have mentioned here,
predictable costs are good.

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jcampbell1
Keen looks to be another Mixpanel. I looked at mixpanel's pricing, and it sis
nicely structured into tiers so one can estimate quickly how much it will cost
based on the size of the business.

Mixpanel's pricing is utility based under the hood (they automatically pro-
rate or upgrade the plan based on what is cheaper), but the marketing copy is
tier based. That looks to be a good approach.

