Have you considered bumping up the free tier to absorb any of this market? I've never thought of what my $/subscriber value might be as someone running a mailing list, but that's probably because I'm just small fry.
Totally reasonable question, and you'll get a very candid answer!
I wrote more about the pricing strategy here (https://buttondown.email/blog/pricing-page-driven-developmen...) but — when Buttondown first launched I _had_ a souped-up free tier (up to 1K subscribers!) and it certainly helped with early adoption, but hurt almost every other part of the business — in particular unit economics and customer service. Curtailing the free tier felt like ripping off a bandaid, but it also solved two of my biggest problems at once:
1. Conversion rates nearly doubled. People who found Buttondown valuable suddenly had an avenue and reason to pay for it!
2. _Margins_ went up. It costs money to send emails; a user who sends, say, one newsletter a week to five hundred subscribers costs around two or three bucks a year just in email alone. Supporting _thousands_ of these users (who are very nice people!) hurt my bottom line.
3. Customer service got way easier. This might not apply to all cases, but the _majority_ of my time answering emails and helping folks was spent on people who weren't spending a dime. While I genuinely want to help all people regardless of how much they are (or are not) paying, it was not sustainable for me to run a bootstrapped business where I spent 4+ hours every day helping people who did not find my service valuable enough to pay $9/month.
Having that free tier I think was a useful wedge to get initial customers and users onto the platform (and I am grateful for those initial users, who I've kept on their free tier!) but I think something significant would need to change for me to consider going back to that set-up.
Thank you, again, for such a warm and thoughtful reply!
I'm working on bootstrapping a software business right now, and I spend a decent chunk of my stewing minutes stewing on what pricing and free trials should look like, so I especially appreciate the candid remarks on those three factors. The conversions fact surprised me, though makes sense once you explain it.
The tricky thing I'm working to balance---for both my own finances and software pricing---is subscription fatigue and subscription inflation.
It's fascinating to now look at things from a "business" angle, because monthly costs I hardly blink at for my business ($10 or $20 / month) feel like hard blockers for my personal life.
If I try to tease apart why this is, I think there's a couple categorical differences going on, plus one quantitative. The categorical ones are (1) my personal life is in the category of "cost only," whereas my business is "revenue minus cost". (2) something I'm not used to paying for, I'm reluctant to pay for. And then the quantitative (ish) one is about the value of $10 / month when it feels like every service has that as their target price. There's a slippery slope feeling, where if I'm willing to spend $10 / month on this slice of my life, there are twenty-eight other places that will happily take that as well. I wonder whether $2 or $3 / month subscriptions will emerge, or whether that just doesn't make sense economically.
Anyway, thank you for reading along as I poorly rediscover the difference between consumer and B2B apps from first principles ;-)
(Delayed, but...) Yeah, a lot of the pricing guidance here varies wildly depending on if you're thinking about things from a B2C vs. a B2B context. I think the hard part about hitting something in the sub-$5/mo price point is the amount of money you're giving to Stripe et al starts ratcheting way up, which is also why you see so many iOS apps be very aggressive with annual pricing.
Have you considered bumping up the free tier to absorb any of this market? I've never thought of what my $/subscriber value might be as someone running a mailing list, but that's probably because I'm just small fry.