This approach is fascinating - and I would love to hear more about it later on...
Specifically, the selection of the value metric as time spent in-app (eg. per user hour). This is value metric/pricing strategy that seems like its available to many companies. And yet very pick it as far as I can tell...
"the amount you pay is proportional to the value you receive from the product"
...but is it proportional to the amount of time a user spends in the product? Timely example: I just switched from a legacy bank with a bad UI to one of these neo-banks, which has a slick UI. I spend way less time with the new bank - and its not because i am getting less value...
It seems like this could create a bunch of suboptimal incentives.
For instance, in my last company, as the we optimized our product, user session time went down - not up (and yes, retention/NPS/satisfaction went up). B2B Users want to do their job quickly - not spend all day in a product. Setting OKRs with this pricing metric would lead to some interesting conversations internally...On the other side of the coin, customers will be incentivized to push time-consuming workflows outside of the product.
If you are trying to differentiate from competitors with more favorable pricing for cost-conscious customers, seems like something like Slacks fair billing policy that auto-downgrades dormant users could be an alternative direction.
I am also very open I am utterly wrong... like I said, I am honestly curious to hear how this goes. Good luck!
I just switched from a legacy bank with a bad UI to one of these neo-banks, which has a slick UI. I spend way less time with the new bank - and its not because i am getting less value...
Pricing doesn't necessarily need to incentivize all good behavior. As you're aware, having a product with a bad UI is an incentive for your users to switch to alternative services.
Comments
This approach is fascinating - and I would love to hear more about it later on...
Specifically, the selection of the value metric as time spent in-app (eg. per user hour). This is value metric/pricing strategy that seems like its available to many companies. And yet very pick it as far as I can tell...
"the amount you pay is proportional to the value you receive from the product"
...but is it proportional to the amount of time a user spends in the product? Timely example: I just switched from a legacy bank with a bad UI to one of these neo-banks, which has a slick UI. I spend way less time with the new bank - and its not because i am getting less value...
It seems like this could create a bunch of suboptimal incentives.
For instance, in my last company, as the we optimized our product, user session time went down - not up (and yes, retention/NPS/satisfaction went up). B2B Users want to do their job quickly - not spend all day in a product. Setting OKRs with this pricing metric would lead to some interesting conversations internally...On the other side of the coin, customers will be incentivized to push time-consuming workflows outside of the product.
If you are trying to differentiate from competitors with more favorable pricing for cost-conscious customers, seems like something like Slacks fair billing policy that auto-downgrades dormant users could be an alternative direction.
I am also very open I am utterly wrong... like I said, I am honestly curious to hear how this goes. Good luck!
Pricing doesn't necessarily need to incentivize all good behavior. As you're aware, having a product with a bad UI is an incentive for your users to switch to alternative services.