

KISSmetrics' bizarre pricing decision - hopeless
http://jamie.ideasasylum.com/2010/07/kissmetrics-bizarre-pricing/

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patio11
I was in the KISSMetrics beta and will probably pay for it, without complaint.
It is a pretty simple decision: am I likely to get 5% or more lift out of
them? (Assuming a baseline of somewhere near $3,000 in sales a month.) Answer:
yeah, based on my experience with funnel optimization, I think that is likely.
I will also continue to recommend them to clients.

I yield to no one in empathizing with cash-strapped startups. However, the
broader economy has many companies which do business on the Internet and which
have actual money. Not "whine about the difference between $10/mo and $20/mo
at their particular size" money, which the CrazyEgg team has probably seen
more than I care to speculate. Not even "replace low-paying day job with
sales" money. I'm talking "Have (teams of) full-time employees whose only job
is to do analytics" money and "Pay $150 a day for the hotel room that their
high-priced consultant stays at without batting an eye" money.

It makes a lot of sense, especially for a product which you're going to sell
in a high touch fashion, to say "We're going to focus on that sort of
customer. Folks who perceive $20 or so of value a month from their funnel
optimization are welcome to check out our competitors."

~~~
DirtyAndy
I think the point of the guys blog post / rant is not so much the price in
general, but that he felt the product targetted at the start-up community. Not
that I have taken too much notice but I was under the impression that is where
they were targetting it and I wouldn't be surprised if most of their beta
testers were from that community and expecting the $10 per month pricing that
they are more familiar with.

Personally I would never create a business that targetted other businesses
that really have no money, it has never seemed a great business plan, but I
would not do a beta marketing of "hey you, try this, you'll love it" to then
offer a product they cannot afford.

I'm sure they will have no problems finding customers, but more of a problem
finding beta testers for their next product.

~~~
tptacek
You realize you're responding to a solo founder of a standalone startup that
sells _bingo card creation_ software, right? I have mad respect for Patrick
(he's sitting right next to me at the moment), but if you were under the
impression that being a Bingo Card Mogul meant Cristal and Rolex watches, uh,
no.

How much more credible a testimonial can you get than "I built my business in
5 hours a week, I sell bingo cards to school teachers, and I easily expect to
recoup the investment I'm making in KISSmetrics"?

For what it's worth: I sell enterprise software at a price point several
orders of magnitude higher than Patrick's, at a company with more employees
than most established YC companies, and KISSmetrics isn't worth it for me
right now, because I'm simply not prepared to feed it the data it needs or to
make the decisions it's expecting me to make.

I don't take it personally that KISSmetrics is pricing me away from paying for
it. In fact, I appreciate it; it's preventing me from wasting time.

~~~
AmberShah
I don't think they can't charge that, nor find customers happily willing to
pay it. The issue is that if you're going to break from the norm in your
industry (and analytics for startup companies, oh yes, they did) then it would
be nice to give people a heads up before reeling them in for a free beta. In
this example, the guy actually invested time writing code to integrate with
it. There's a learning curve associated with beta testing a product and
without giving any indication of price ahead of time, it's a reasonable
assumption that it will be ballpark what it's competitors are, not 10X that.
This is not a complaint about the price they chose, it's a complaint about
spending a great deal of time and money marketing to startups (god, did I see
them everywhere) and then flipping to a point where they could not afford
them. I do believe that someone who has made his money not off a disruptive
product or social media network, but carefully analyzing metrics and
conversions (like Patrick) could benefit from it, and perhaps that's who it's
for, but that's not how it was marketed. In his case, he clearly feels he can
make > $200 a month by using it. But what if it cost $1000 or $1M? The point
is you have no idea and they clearly aren't concerned with ballparking where
there competitors are. I've always been nervous about signing up for a "free"
beta that my business can become dependent on without knowing the price. This
just convinces me to continue doing that.

~~~
tptacek
I actually don't have a lot of opinions about funnel tracking, so I'll keep
this simple and limit it to what I do have an opinion about:

If $200/mo is a lot of money to you, you either shouldn't be spending a lot of
time on funnel tracking, or you don't have a business. $200/mo is below the
noise floor in company with just four people at ramen wages in the Bay Area.

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calvarez
Cindy here - if you were a beta user or ever asked a KISSmetrics question, you
probably talked to me.

We at KISSmetrics did not come to our pricing decision lightly. After over 6
months in beta, we looked at the data and identified our happiest, most
engaged customers - the people who were asking questions, making suggestions,
and generally getting the most value out of the product, and priced it in
accordance with the amount of value they were getting.

We did have some very dedicated early-stage startup customers in our beta, and
we have worked with them to make sure they can continue to use us. (It's
amazing what asking nicely will get you!) We will be publicly announcing
startup programs in the future, but we wanted to focus on our existing beta
customers first - the product wouldn't be here without them.

(We also have no problem with it if several startups want to split a
KISSmetrics account - 1MM events could easily support a dozen early-stage
startups.)

Feel free to email, ask questions, rant - calvarez at kissmetrics.com

~~~
hopeless
Thanks for the reply Cindy (yeah, I think we corresponded once or twice). I'm
relieved to hear this decision was based on some hard data and I can see how
the pricing model might be good for KISSmetrics. Obviously, it's not quite so
good for me and the rant really came out of my surprise about the pricing.

I think some sort of "startup" plan would not only be good for a sizable-
percentage of your beta testers but also good for KISSmetrics. After all, if a
company isn't profitable enough to justify $149/month on analytics but wants
to improve their conversion ratios (and hence profits) they will likely go to,
and stay with, a competitor.

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fookyong
Here's something that I don't get.

Is funnel analysis even suitable for a monthly subscription service? Unless
you're mucking around with your checkout funnel constantly (why?) this seems
more like the kind of tool that I'd use once. Or at least very, very
infrequently.

Discover what's wrong, fix it, _the end_.

The weird thing is, psychologically I would have no problem paying a couple of
hundred bucks for a one-off experiment if it shows me results that I can make
clear decisions from. But I balk at the idea of subscribing for $XXX per month
to do experiments over and over.

Perhaps KISSMetrics needs a one-time experiment pricing option?

~~~
pchristensen
Funnels are never done because a) the market changes as you become more
popular, have new competitors, the economy tanks, etc and b) there's no
_perfect_ funnel - you might see diminishing returns but you never know what
will make a big difference.

~~~
DJN
Good point but over a long term, markets simply aren't that volatile.

@fookyong's comment contains a lot of truth. If using Kissmetrics on a
"Kissmetrics-optimized" site generates diminishing returns, surely that is a
cause for concern. The original author's change rapidly enough to suggest that
your experiments will yield increases in ROI

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martinkallstrom
OP says you need to make a new decision worth $200 every month for KISSmetrics
to be worthwile.

This isn't true, it suffices to at one point make a single decision that on
average will make you $200 per month for the tool to have paid itself for ever
thereafter. Or more likely, keep generating revenue. For many businesses (like
retailers) this could entail improving the funnel by just a few conversions
per month.

If you don't have a business with the potential to improve cashflow (or other
business value) by $200+ per month from analytics, of course you're not within
their target group.

The lesson KISSmetrics obviously have learned and are appliying is that if you
are bootstrapping your company or project, you must identify and be brave
enough to stay within a very specific customer demographic in order to
succeed.

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jasonjohnson
I recently met Neil at a conference in SC, and I've known and done prototyping
work for Hiten for a little over a year. I was also one of the original alpha
testers for this product.

I am 100% confident the pricing decision was founded in hard data and
experience. One of their other products, CrazyEgg, aimed for and delivered
incredibly heavy functionality. However, it resulted in disproportionate load
on their people and infrastructure - and it's obvious they've learned their
lesson.

People will pay these prices. More to the point, the people who are very
serious about this sort of funnel honing will pay these prices.

Also, if you're bootstrapping... bootstrap. Hack together something to track
your highest priority funnel. Don't harsh on a product so obviously unintended
for you.

~~~
hopeless
I can see the support point of view: reduce the number of customers = reduced
support burden. But a "Starter" plan could come with lower (or no) support
commitments. There could also be disproportionately less events (i.e., $10 for
20k events vs $149 for 1m)

"a product so obviously unintended for you" I guess this is the part which
_really_ annoyed me: until the pricing was announced, KISSmetrics was
_exactly_ what I needed and there was _no_ indication that it wasn't being
targeted at me (or any other small business). Most of the buzz I've read, and
recommendations I've seen, were from other small businesses so I don't think I
was alone in being surprised by their positioning.

~~~
patio11
_But a "Starter" plan could come with lower (or no) support commitments._

I wrote a piece of OSS A/B testing software, which is rather similar to funnel
analysis in application, what type of businesses it appeals to, and who will
likely be implementing it. My software is used in some small places and some
big places. It has _not_ been my experience that big places tend to take up
more of my time than small places.

Integration is hard. Educating users is hard. ("You seem to be under the
impression that A/B testing software includes genetic algorithms to write copy
for you. This is not in scope for this project, but you're welcome to patch it
in...") These don't get less hard just because you're firing the API less than
Employee #4602 at BigCorp. (If the user can do 100 API accesses without
incident they can probably do a hundred million. Scaling is just a matter of
getting the architecture right, and you don't have to redo that on a per-user
basis.) Also, BigCorp has internal engineering resources that they will likely
fall back on prior to emailing you, where one-man shops might be more inclined
to mail you first.

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paraschopra
If you look at one of their main competitors (MixPanel), the prices they
decided are actually half.

Here is the MixPanel page for comparison: <http://mixpanel.com/pricing/>

And here is KissMetrics: <https://www.kissmetrics.com/signup>

Moreover, with service such as KISSMetrics the support load will be quite high
(since there will be all kinds of integration issues, why don't numbers match
with GA, etc). Anything below $100 does not make a lot of sense because even
with just 2 hours of support per month (which I think is reasonable for such a
service), they will probably not be able to make a profit (assuming $50/hour
consulting).

Ask me about the support load, I run a service in a complementary (a/b
testing) industry :)

~~~
suhail
This is true however we offer much more then just funnel analysis =)

We also do offer a "free" type plan: <http://mixpanel.com/free>

~~~
paraschopra
Yes, I realize the comparison is not a spot-on head-to-head comparison but you
wouldn't disagree that Mixpanel's main feature is funnel analysis :) To be
fair, many people _will_ compare Mixpanel with KISSMetrics (or it at least how
I see the services).

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ig1
The startup market is a relatively small market, the market for corporate
websites, retailers, etc. is much bigger and for that audience the pricing
seems perfectly viable.

~~~
hopeless
But it seems strange that they are completely ignoring the small business
market altogether. I'm pretty sure it would be easier to sell 15x$10
subscriptions rather than 1 $149 subscription, which is probably going to
involve at least a phone call if not a face-to-face meeting.

~~~
webwright
There is SMALL business and NEW business.

SMALL (web-centric) businesses might have a staff of 5 and a $50,000 or more
in monthly obligations (payroll, rent, etc).

NEW businesses have no payroll and hope someday to make meaningful revenue
with a web site. 90%+ of them will die.

It's not oozing with charity, but I don't blame them for punting the new
business sector, even though it might earn some wrath from neophytes on Hacker
News.

------
eli
Uh, have you seen how much big companies are paying for "enterprise"
analytics?

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tbrooks
I have a feeling this is one of Neil Patel's marketing ploys to create buzz
for KISSmetrics.

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andrewingram
Honestly I don't think they're putting themselves out of the reaches of a
startup. It's more than possible to justify the cost if the service is going
to be genuinely valuable.

The problem is that the 30 day free trial probably isn't enough time to
evaluate it, and the people who are being left out are the hobbyists who like
to blog about all the cool things they've managed to do with stuff.

An ecosystem of hobbyists is useful for me when evaluating products, it's a
shame KISSMetrics is going to miss out on this. A free account for under 100k
events and a noncommercial license would be far more useful than a 30 day
trial.

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patrickk
Hey Jamie...great to see you pulled the trigger! Great call. I'm really
disappointed in KISSmetrics too, as they seemed really smart and clued-in.
Shame indeed.

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jedc
Am I missing something? Just went to <https://www.kissinsights.com/plans> and
they list:

Premium - $29/month - 1k responses/month

Unlimited - $25/month billed annually - no limit of responses

Or has the OP gotten news/information of an upcoming price change?

~~~
subbu
Those prices were for KISSmetrics while you are looking at KISSinsights.

~~~
jedc
Ah, thanks for that. (I had just followed the OP's link, and hadn't known the
distinction between metrics/insights.)

------
skm
Seems really bizarre to me. What do they offer that, in your experience, is so
much better than google analytics?

~~~
patio11
Retrospective, arbitrary construction of funnels. If you need it and you know
you need it, their implementation is jawdropping.

If you are tracking a single funnel which doesn't change much, that probably
isn't that spiffy for you. For example, you configure Opens Trial Page, Trial
Signup, Opens Plan Page, Signs Up For Plan as a funnel once and you're done.

However, if you're doing more sophisticated things, it can be a lifesaver to
not have to tell the engineering team "Yo, we're reconceptualizing our
funnels: you guys now have to do annoying modifications all over the site."
Lets say you have a Facebook game with a Valentine's Day promotion and you
want to see whether people who sent their bonnie lass a cow to show their
affection are better or worse customers two months later. No problem, with a
few clicks on the interface you can whip up a funnel that tracks purchasing
the pink cow as a stage and then watch conversions after that. You don't have
to tell engineering about it, since they already fired the "bought a pink cow"
event. You don't have to wait a few weeks after the experiment to collect data
(most funnel analysis software I've used requires a do-over any time you
create a new funnel or alter an existing one except by concatenation) -- you
have the data, you're just slicing it a new way.

The notion of preventing a turf war between the analytics side and the
engineering side is really popular with some companies. They also typically
have lots and lots of money to spend.

~~~
paraschopra
They also claim to track people, not so called visitors (via cookies). In
fact, I was reading that if a person visits your page from home and then from
office (from completely different browsers), they still count him as 1
visitor.

Sounds a really exciting claim. Wish they prove/demonstrate it to be true.

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nphase
At those prices, I'll just continue to use use Google Analytics' convoluted
goals/funnels.

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pclark
30 day free trial, whats the big deal?

edit: people don't like free trials?

