It's strange that pricing is only available to customers (for now?). There are three plans, starter, pro and elite and they all include Basecamp, Highrise, Backpack, Campfire, unlimited employees (users) and e-mail support.
There's no mention that I can see whether Basecamp includes time tracking (available only on the $49 and higher Basecamp plans) or how much, if any, conference call minutes are included with Campfire.
Please do so sooner than later as something like the limit of simultaneous chatters in Campfire has been an issue for us in the past. I've got our HR guy looking into upgrading but we've got little in terms of comparisons to go on.
Basecamp has one major limitation for me and that is only people within your company can track time against projects. I work with a lot of independent contracts and I wanted to put them in separate companies, but still have them track their time in Basecamp. I have talked with support and this is a "feature" which they are sticking with, very frustrating.
Curious wording: "Can I sign up for the Suite if I don't already own a 37signals product?
Currently the 37signals Suite is only available for people who already own Basecamp, Highrise, Backpack, or Campfire accounts."
If you pay to use a webapp, do you "own" it? Maybe they're trying to make 37signals' "apps" seem more like App store apps.
A large amount of their customers must just use one app, seems like a good way to get them paying double whether they need it or not. Deals like these get people paying for things they don't need because of the perceived amount of extra value having the whole suite of products gives.
In economics this is referred to as "bundling". By selling multiple products together you can extract more surplus from customers with diversified tastes.
Say, Customer 1 is willing to pay $100 per month for Basecamp and $60 per month for Highrise.
And, Customer 2 is willing to pay $60 per month for Basecamp and $100 per month for Highrise.
If you know this, and you charge for the products individually, the profit maximizing price is $60 for each good and total revenue is $240.
However, if you charge for the products as a bundle the profit-maximizing price is $160 per bundle and the total revenue is $320.
It's a smart move to charge using bundles when your marginal cost is low and there is a lot of variety in demand.
It's a great way to increase the amount of money they're extracting from their best customers while simultaneously giving them an increased perception of value. Seriously, they're going to print money hats.
Surely their best customers will already be paying separately for the products individually? How does charging them less for the same increase the amount of money they are going to get from these customers?
This is actually the tactic that Microsoft used to own the Office market, I believe... they first released a "Microsoft Office" that included Word, Excel and so on, all in one, for less than two of those products sold separately.
That, of course, completely wiped out single-products that couldn't be sold in a suite, e.g. WordPerfect. Once the market was clear of competitors, they then proceeded to slowly but surely increase the price of the suite (and the price of the standalone products along with it).
Of course, they can, er, manage the price point of the suite in the future. It's a per-month charge, after all.
To me it's clear that it's about the total lifetime customer revenue rather than adding up monthly prices. Especially since they are trying to get people to use Highrise and Campfire, which are much stickier apps.
But there's also the factor that if users do bump into any of the limitations at lower levels, they upgrade the whole suite.
Plus, their winning price points would seem to be $20-$50 a month (where managers and showrunners will be okay paying out of their own pocket as a productivity tool) and $150-$250 a month (which can be expensed to a company account without big hoopla if you know your people actively use it). And they want to get accounts pushed from the former category to the latter (it especially helps to be offering a good deal at this time).
And finally, nobody likes to see multiple charges from 37s on their card. That's definitely a real issue.
Good move for both customers and 37signals, I think.
I bet they calculated the amount they'd lose if every customer who can go cheaper by choosing the suite did so. That number must have been small enough to take this step.
Technically I imagine it was easier to add it as just an upgrade path. Besides, it's a hard sell to sell a bundle of unknowns in one go. So they solve 80% of a problem with 20% of the effort, as it were.
