Monthly subscription vs pay-as-you-go pricing - how to test them?
Monthly subscription vs pay-as-you-go pricing - how to test them?
I launched the beta about 1 month ago and now I'm thinking about charging users. But I'm torn between monthly subscription vs pay-as-you-go pricing models.
How can I effectively test these 2 models? Send survey to current beta users? Select a subset of users and send a fake "We have come out of beta! Here are your options to upgrade." email to them?
I know the least I can do is to just pick one model and launch with it. Won't be the end of the world even if I pick the suboptimal one. But I'm trying to minimize the chance that I have to change pricing model later on. Will really appreciate it if you can suggest an effective way to test user's reaction to each model.
My product is a SaaS service with an open-source option. Users can run their own server using our code. Similar to the model Sentry uses. The product itself is a Machine Learning algorithm that automatically detects 3D print failures using webcam feed.
A bit more details:
On my website the proposed pricing (after beta) is:
HOBBY tier: $2/month/printer. limited function and time of use < 20hours/month
PRO: $10/month/printer. unlimited everything
I'm tossing around the idea of pay-as-you-go rate at the rate of $0.1/hour.
There are 2 hesitations around pay-as-you-go:
Thank you! this is incredibly helpful. It is hard to be transparent with pay-as-you-go.
What do you competitors do? Might be worth copying them.
Have you tried asking in forums in your niche to test the reaction?
Try adding a questionnaire into your service about pricing. I got decent feedback doing this but take it with a pinch of salt as you're never sure what people are going to do until they actually decide to give you money. You'll at least know what creates a strong reaction.
Try posting a more detailed post here about the specific pricing options. Maybe there's something obvious you're missing. Pricing is really specific the product details though.
All competitors are doing subscription.
By adding questionnaire do you mean adding a link right below the pricing section to let people fill out a quick survey? It should be fairly quick to implement.
@kennethjiang Why not offer both options for users to choose from?
I listed some of the reasons why I am hesitating to list both options in the additional details I just added.
@kennethjiang, Got it. I saw it now. Essentially, the two pricing options relate to two distinct segments of users and it might make sense in focussing on one of them for now. Which one of the two segments seem to have easy and quick access for you to test out - start with that segment. An additional option that can be thought of like this - while you test one pricing option and the related segment, you could always include "Write to know more" for the other pricing option, so you might get to gauge if some people show interest for the other combination.