Comment by WA | Hacker News Reader

Comment by WA | Hacker News Reader

Parent Full thread

I heard that before and my sibling-poster is correct: You have no idea what my product is, so you can't say anything about the price. If my product were MP3s, 5 bucks per MP3 wouldn't work.

Anyways, your point is not totally invalid. I did a mistake when I changed from free to paid. I started with 99 Cent per month. The goal was to convert as many users as possible. This worked well. Only about 10-20% stopped using my service. However, it made future price increases harder.

Some people would pay more. For some people the service delivers a a lot of value and they'd probably pay 10 bucks a month. However, there are also quite a few people for whom 2 euro is the limit, especially since the long-term costs would explode for them.

And I can't experiment with pricing. The niche is too small to have this go unnoticed. I know, because I tried. Either I increase it globally for everybody or not. To be honest, maybe I didn't find the perfect pricing point yet, I don't know. But it's okay, because I can live quite comfortably.

Couldn't you make different levels of subscriptions? So find a new idea to improve you product, and have only those with Gold membership be able to use it. This way you don't make and enemies with the old subscription, but you can still convert more to the more expansive price tag.

I thought about that as well but I have a luxury problem:

There is not much to improve. In the space I'm operating in, the software, as it is, can be considered more or less complete. I mean, I can always add features, but the core mechanics, the way it works, the way it delivers value and the value people expect from the software is more or less complete. There's not much to add that improves the perceived value for people in such a way that they'd be willing to pay more for it.

But the fundamental idea is right: There must be some additional thing that's good for people, that people want. There's also related products, added benefit, whatnot. I won't do Gold membership, but I might be able to sell different things that complete the offering for some people.

Compare this to Microsoft Office. Word is for writing stuff. It's more or less feature-complete. Sure, you could add some stuff, but most people are happy with how it is in its basic edition. So Microsoft offers also Excel and PowerPoint. They are for very similar people, they complete the offering, but they're totally different. A "Word Gold" wouldn't make any sense.

One more thing: Whatever I add and whatever pricing change I introduce comes at a cost. Introducing tiered-pricing (3 wiggles for 2 euros, 7 wiggles for 4 euros etc.) for example has benefits, but it also increases complexity and decision making. I'd do this for my next project, but for the current business, I'm also a bit stuck in the current userbase with decisions I made in the past.

I might offer my service in English as well next year. That's going to be an opportunity to experiment a little bit and a way to grow the business.

An interesting tactic that I see repeated by successful bootstrapped internet businesses is to really dig into the pain of their current audience. You've got this group of thousands that have proven to pay for things on the internet. You are in a position of trust, since you provide them value already.

What are their other pain points?

That is the question I'd be studying them to answer.

Thanks for your advice. I probably didn't dig deep enough into the pain points. But I know what you mean. I gonna try something and go from pain points to product ideas. I mean, I talk to people and ask for feedback, but maybe I'm asking the wrong questions.

Is your product of use to companies as well as individuals? If so you may be able to produce a "company" account at a much higher price point, offering the same functionality but with extras such as multiple logins, Google Apps integration (which provides SSO for free for companies that use Google Apps) more logging, usage reports and more.

Also consider patio11's favourite trick of offering people a 10% discount if they pay for 12 months up front - this can massively increase your cash flow.

Nope, it is consumer-oriented only. There's not even a remote chance a company want to use it :)

Cash flow is not an issue. While not everybody pays for 12 months in advance, I do offer that option and some people use it. The disadvantage would be that there are legitimate reasons to NOT use my service a couple months per year and come back later. So by offering a discount for 12 months up front, it might lead to more people asking for refunds or general customer dissatisfaction. I could think about a service-branch that fills these couple months off, but generally speaking, it also increases perceived complexity.

You got me thinking, but I'm reluctant, because it's not as easy as writing that email patio11 recommends :)

I think it's very mature to respect users like you do and don't experiment on them with new pricing/structuring ideas. That's one thing I don't like about Google - they keep reinventing their services (basic consumer stuff like gmail, youtube) and they put all those irritating notifications about it (some of which require actions/decisions), which are a cognitive burden.

Reply on news.ycombinator.com