Category Archives for "Pricing Experiments"

Pricing Formulas 101: Everything You Need to Know

Choosing a pricing formula is one of the first — and most important — steps when creating a pricing plan. If you’re a new subscription business owner, it’s easy to assume you need to use something like “$X a month for Y product.” It’s simple, intuitive, and it works well in a spreadsheet. However, there are other options that may fit your business model better and result in a healthier bottom line. In addition to understanding the basic pricing formulas available, you need to know how to combine those into a value-based pricing structure for your subscription business. The most common pricing formulas are: Fixed fee Flat rate Volume Stairstep Tiered Fixed fee Fixed fee pricing is probably the pricing […]

How to Optimize Your Prices to Increase Subscription Revenues

Many subscription companies simply set a price and start selling their products ASAP. That’s great when it comes to getting an MVP out the door — but it can also leave a lot of money on the table. Whether it’s price plans that let you charge more for more features or lower-priced plans that can prevent voluntary churn, there’s a lot to experiment with. Along with reducing involuntary churn, tweaking your pricing is another area that can produce tremendous returns. Successful companies like Buffer have taken seemingly-drastic steps towards price optimization in the past. At the 2016 SaaStr Conference, Buffer co-founder Leo Widrich spoke of their decision to double Buffer’s pricing. They had no idea what would happen, but they […]

The Biggest Pricing Table Mistake

The pricing table is arguably the most important element of your pricing page — but many businesses are making a key mistake when it comes to theirs. What is it and how can you address it? The value isn’t clear Your pricing table needs to do two things at once: Convey the price (and subscription schedule) of your product Communicate the value of your product If your pricing table isn’t clearly communicating the value to your customer, you’re not going to sell as many subscriptions. Customers might even wind up signing up for the wrong product or plan, because they’re confused about what features are offered in each. In turn, that customer confusion can lead to buyer’s remorse (which can, in […]