1. When selling software to companies, don't price it like a consumer service.
For a company of any size, paying $10 and paying $100 for a tool require the same amount of work for someone to process and it is essentially the same cost to the company. The money itself is negligible, and a $10 price makes the company assume you either won't stay in business or won't be able to run a secure company. Charge a price that makes them take you seriously.
2. People really, really hate it when you "change the deal."
If you offer a free tier, offer it on a time-limited or user-limited basis up front such that your ideal customer would have to pay to keep using the product. Otherwise, you'll find yourself changing the deal and pulling the rug out from users. Changing the deal ruins your reputation. Charging more upfront can actually give you a reputation for quality.
1) I generally agree with the first argument, but I think context matters a lot. There’s always a market price depending on what the product does and what competitors offer. If your pricing is far below or far above that range, it usually won’t work out well. Our add-on was mostly for 1-3 ppl team.
2) As for the second point that’s definitely a lesson I keep bumping into and somehow never fully learn. No matter how clearly you communicate and give advance notice, users still perceive it negatively. And yet, as a user myself, I regularly get emails from services I pay for about price increases or plan changes. Very few companies offer true grandfathering forever.
Comments
There are two lessons here:
1. When selling software to companies, don't price it like a consumer service.
For a company of any size, paying $10 and paying $100 for a tool require the same amount of work for someone to process and it is essentially the same cost to the company. The money itself is negligible, and a $10 price makes the company assume you either won't stay in business or won't be able to run a secure company. Charge a price that makes them take you seriously.
2. People really, really hate it when you "change the deal."
If you offer a free tier, offer it on a time-limited or user-limited basis up front such that your ideal customer would have to pay to keep using the product. Otherwise, you'll find yourself changing the deal and pulling the rug out from users. Changing the deal ruins your reputation. Charging more upfront can actually give you a reputation for quality.
1) I generally agree with the first argument, but I think context matters a lot. There’s always a market price depending on what the product does and what competitors offer. If your pricing is far below or far above that range, it usually won’t work out well. Our add-on was mostly for 1-3 ppl team.
2) As for the second point that’s definitely a lesson I keep bumping into and somehow never fully learn. No matter how clearly you communicate and give advance notice, users still perceive it negatively. And yet, as a user myself, I regularly get emails from services I pay for about price increases or plan changes. Very few companies offer true grandfathering forever.