KISSmetrics' bizarre pricing decision | Hacker News Reader

KISSmetrics' bizarre pricing decision

jamie.ideasasylum.com

61 pointshopeless47 comments

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."

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.

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.

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.

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.

Thanks Patrick, I'm sure it was one of your blog posts that put me on to KISSmetrics so I'm interested/glad to hear that you're going to stick with them. Perhaps you'd do a review in 6 months time to see if their pricing plans vs the effect to your conversion ratios really has balanced out? (I'm not being snide, I'd be genuinely interested how it works out)

I agree with how market positioning is so important to a startup, and yeah I kinda respect KISSmetrics for having the guts to do this. My anger really came because I felt they'd cut off the bottom of the ladder where those of us who can't justify $150/month on analytics where standing. And this was a surprise because nothing until the pricing announcement indicated that this was the direction they were going to take.

Feel free to ask me about that in six months. I'm always grateful for blog post topics.

It is intrinsically hard to attribute improvements in conversion rate to a single cause, except in an A/B test. It will be sensitive to changes in the traffic mix, seasonality, strategic decisions, etc etc.

I'd love to read a blog post about bingo cards' seasonality. For real.

5% would only be the break-even point, though (for 3000$). At that point, you still haven't made any extra money, but invested time into adapting their solution.

Also, if you make 3000$/month, you are already rich (if it comes from automatic sales), so your attitude to spending might differ from somebody who is just starting out.

Thanks, that was kinda the point I was making when I said KISSmetrics needed to make you $200 on the $149 plan... you'll have invested your own time into this tool so that needs to be accounted for.

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

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.

Hi Cindy,

I'm a subscriber to your blog and I love your work. I was late to the beta test run so I missed out. I've been waiting on the sidelines for the big launch and whilst I think the pricing is pretty decent and fair (after all, it is pretty close to our pricing at Trafficspaces - http://www.trafficspaces.com/plans/), I instinctively predicted this sort of backlash, especially because there was no free entry plan, however limited.

Having said that, I'm sure your decision was well thought out. After all, you are in the funnel optimization business.

A quick shout out to Neil Patel - a very smart chap.

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?

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.

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

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.

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.

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.

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.

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 :)

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

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

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).

Except that Mixpanel have both a free and basic plan ($50) to cater to smaller sites. Thanks for pointing that out to me though... I'll have to investigate

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.

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.

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.

I don't find it strange. $10 accounts won't have 1/10th the support burden as $149 accounts. Setting a high minimum pricing bar for customers vastly improves the support a company can provide.

$150/mo isn't that much, really, I doubt many of their customers require a face to face meeting. I suspect many never even call. I wouldn't.

$149 is still well below the phone call level. As a rule of thumb if it can be put on a corporate credit card without pre-approval it doesn't need a human contact to sell it.

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

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

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.

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.

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?

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

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

Look here: https://www.kissmetrics.com/signup

This is about http://www.kissmetrics.com/

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

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.

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.

Nothing. I looked at KISSMetrics ages ago when the private beta was first leaked. Similar to crazyegg it focuses on a single aspect of analytics, in this case conversion funnels. So it is simple to setup funnels for every possible conversion point (which if your website is effective should be almost every page). However, you can do this on GA too, which is also a hugely more powerful and integrated tool. Someone mentioned previously how expensive enterprise analytics is... this is _not_ enterprise analytics. I'm really not sure who they're aiming this product at.

You should give it another look. It's come a long way-- for companies that have new/changing funnels (a LOT of web companies), this is a GREAT freakin' product.

We (nearlyweds.com) are a beta customer of Kiss. We use GA and Kiss right now. As much as I love GA, they do a crappy crappy job at tracking via conversion funnels, in fact it's almost useless for our business. The real story is that Kiss tracks people, not just visits. This gives us clarity and insight into our conversion funnels, which paths convert the best, which referral sources convert the best, and then on the back-end, because they track people, which sources produce the subscribers that last the longest, etc. We can set up funnels for just about anything.

There is also a psychological element at play here that has been interesting for us. When the product was free, we didn't prioritize optimizing our funnel aggressively. Now that monthly fees are looming, we are having to fish or cut bait and get real serious about which funnel projects to pursue or not to pursue. It's a very healthy restriction on our business (a la 37signals).

It was purely the simplicity of the user interface for visualising the steps in the sales funnel and seeing exactly where you were losing conversions. I think you can construct something similar in Google Analytics but KISSmetrics is a much more focused tool (but not worth the difference between free and $149/month!)

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

30 day free trial, whats the big deal?

edit: people don't like free trials?

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