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Comment by WadeWilliams | Hacker News Reader

It's a website subscription service that I'm trying to pack as much value as possible into.

I think it's worth $50.

My question is what are the best resources on this topic?

I suppose i need 2.5 as many times the members at the $20 rate to make generate the same revenue. I've got 100 users @ $50, but will I get 250 @ $20 ? If I did get 250 at $20, the revenue hasn't gone up.

$50 seems like the better plan to me. Ofcourse, if I ask the users who haven't subscribed and still use the free model, they think $50 is too much and they would be more likely to pay $20.

I'm sure there's lots of discussion on this topic out there, but as soon as you type in "membership subscription" at google you get garbage like pay pal and netflix, and not any nerdy discussion on the topic.

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So you gave them two offers and they chose the cheaper one? Of course they did.

Here's what you should do. Find more prospective users. Tell them that you're considering $50/year and $100/year (Btw, these would sound cheaper if they were $5/mo and $10/mo, plus it wouldn't require as much of a commitment.) and ask which they prefer.

If they all say that they wouldn't pay for either, you know that $50/year is actually too expensive. If they say that they prefer $50/year and that $100/year is too expensive, you know that $50/year is probably ok.

Then again, remember that your users will lie to you about what they want and what they're willing to pay for. So you don't really know until they're actually paying for it.

$50 seems like the better plan to me. Ofcourse, if I ask the users who haven't subscribed and still use the free model, they think $50 is too much and they would be more likely to pay $20

Of course they would rather pay less! But you also have to consider that when people start paying, they usually expect a higher level of service. If you can keep the number of people with high expectations to a minimum and still turn a profit, you'll be in better shape.

Start with the higher price, and see how it goes. If you aren't getting enough customers, you can always offer limited-time discounts (e.g. "Regularly $50/yr, but sign up during December and get your account at $40/yr for life!").

wicked good idea on the limited time discount. Thanks.

Danger: This has been the polar opposite of Patrick McKenzie's experience. Charge people one shiny nickel and they'll come to you with high expectations. In fact, lowering your prices pessimizes your customer base with the most high-drama customers.

I meant that when they start paying vs being free customers they start to have expectations. You're right, when they pay less, they seem to expect more. The lower price just attracts that kind of customer. I saw this at Kaplan Test Prep. The most demanding students were the NCLEX students who only paid $400-600, while the USMLE students who paid $6000-10000 never asked for anything.

If you think it's worth $50/y, you could price it there, and then offer a $5/m package as well. If the $50/y scares them off and they go with the $5/m package, then you're making an extra $10/y off them. If it doesn't scare them off, then you're making your $50/y.

I would hesitate to pay $50/y, but not so much $5/m.

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