Hi Tigran! Nice to see you also use @ninalimpi's illustrations. I'm a huge fan and use them in our landing page too!
3
Hi Tigran 👋🏾 love hearing more about Cronhub. These tactical blog posts are great so keep 'em coming.
Our project (Eventbot), just released our first pricing model as well as we found lots of similar conclusions to what you wrote about. One thing that we focused on was our primary goal, which is important enough to clarify early.
The primary goal of the pricing strategy is to maximize your product revenue.
Should this be your primary goal? There's signs that point otherwise. For example, you know the pricing will change again. Plus there's uncertainty about the demographic of the buyer (yes they are devs, but what type? in what country? working for what kind of business, etc)
For Eventbot, we opted to use the primary goal of "how can we learn the most" as a goal of our pricing. The difference is subtle - but I think with smaller projects like ours we can afford to leave some money on the table, knowing that we can and will change the pricing soon.
I think you landed on a pretty great pricing setup, so all that to say well done. Hope it brings you lots of learning and maybe some money ;)
1
Hi and thanks so much for sharing your thoughts. I think pricing is a living feature and you're very likely to iterate on it and make changes based on your learnings.
I like the idea of using your pricing as a learning source but eventually, the reason you want to optimize your pricing is to have better conversion and increase your revenue right?
What I mean is that "how can we learn the most" model works well with " maximize your product revenue". :)
1
eventually, the reason you want to optimize your pricing is to have better conversion and increase your revenue right?
Yup definitely! My only point was that at the start, I think it's worth trying to get more learning even if it means less money. Definitely think that balance shifts as a company/product matures
2
Hi Tigran, great post! There is so much that I'd love to chat more about here. I hope you don't mine the coming wall of text...
There aren’t many articles on side-projects pricing even though the number of revenue-generating side-projects is growing. If you go to Indie Hackers you can see many of them there and many makers in the community wonder and ask questions about pricing as well.
Great point and I'm glad you mentioned there weren't a lot of articles on pricing, though a lot of people in the Indie Hacker community have asked.
This is the most basic pricing model you can think of because it really makes sense. First, you calculate everything that costs money to your project and then add a healthy margin on top of it.
Your example for your approach to cost-plus pricing makes sense, and I think you could go even further.
I think the cost to acquire customers is a largely ignored in cost-plus pricing, and even though most of us Indie Hackers go the self-service route (instead of relationship sales, which adds a huge cost to cost-plus pricing for obvious reasons), we don't add in self-service CAC until later.
In other words, I think it would be useful to think about the time you spend doing support requests for free users a "customer acquisition cost" because you hope that they would pay later.
However, you want to add another dimension based on your customer groups. There is a term called “Pricing Axes” which I first heard from Joel Gascoigne in our company retreat this year in Singapore. These axes represent variables that you can use to better model your pricing.
I like the term "pricing axes". You're using monitors and users right now as your pricing axes--do you think you'll add in SMS alerts, reports, etc. or something like that in the future? It seems like SMS might be a good candidate in the future because some users might use (and find value from) the feature a lot more than others and I imagine you might be paying per text (correct me if I'm wrong). Do you track that usage?
Thanks again for the post. I look forward to following you and Cronhub more on IH and Twitter!
2
Hey Tigran,
thanks for sharing your thoughts and learnings on pricing. Have you considered a region-based pricing? I mean lower prices for countries with lower income. $7 might be not an issue for a dev in Europe or the US, but for a dev in India or the Philippines this is probably more a pain point... - Just an idea.
Cheers,
Peter
1
Hi Peter! I've not considered region-based pricing. I think it's a bit more complex than it sounds. However, the developers from low income countries can use the FREE plan :)
2
Yeah, I was just asking out of curiosity. Not even thinking I'll do it myself.
2
Very useful article for indie hackers. Thanks for sharing.
1
Thanks for reading.
2
Hey Tigran. Thanks for this write up and I especially like the monthly reports that you've been doing on the cronhub blog. I am very satisfied by the hands-on insights that I can learn from those. Great work!
Hi Tigran! Nice to see you also use @ninalimpi's illustrations. I'm a huge fan and use them in our landing page too!
Hi Tigran 👋🏾 love hearing more about Cronhub. These tactical blog posts are great so keep 'em coming.
Our project (Eventbot), just released our first pricing model as well as we found lots of similar conclusions to what you wrote about. One thing that we focused on was our primary goal, which is important enough to clarify early.
Should this be your primary goal? There's signs that point otherwise. For example, you know the pricing will change again. Plus there's uncertainty about the demographic of the buyer (yes they are devs, but what type? in what country? working for what kind of business, etc)
For Eventbot, we opted to use the primary goal of "how can we learn the most" as a goal of our pricing. The difference is subtle - but I think with smaller projects like ours we can afford to leave some money on the table, knowing that we can and will change the pricing soon.
I think you landed on a pretty great pricing setup, so all that to say well done. Hope it brings you lots of learning and maybe some money ;)
Hi and thanks so much for sharing your thoughts. I think pricing is a living feature and you're very likely to iterate on it and make changes based on your learnings.
I like the idea of using your pricing as a learning source but eventually, the reason you want to optimize your pricing is to have better conversion and increase your revenue right?
What I mean is that "how can we learn the most" model works well with " maximize your product revenue". :)
Yup definitely! My only point was that at the start, I think it's worth trying to get more learning even if it means less money. Definitely think that balance shifts as a company/product matures
Hi Tigran, great post! There is so much that I'd love to chat more about here. I hope you don't mine the coming wall of text...
Great point and I'm glad you mentioned there weren't a lot of articles on pricing, though a lot of people in the Indie Hacker community have asked.
Your example for your approach to cost-plus pricing makes sense, and I think you could go even further.
I think the cost to acquire customers is a largely ignored in cost-plus pricing, and even though most of us Indie Hackers go the self-service route (instead of relationship sales, which adds a huge cost to cost-plus pricing for obvious reasons), we don't add in self-service CAC until later.
In other words, I think it would be useful to think about the time you spend doing support requests for free users a "customer acquisition cost" because you hope that they would pay later.
I like the term "pricing axes". You're using monitors and users right now as your pricing axes--do you think you'll add in SMS alerts, reports, etc. or something like that in the future? It seems like SMS might be a good candidate in the future because some users might use (and find value from) the feature a lot more than others and I imagine you might be paying per text (correct me if I'm wrong). Do you track that usage?
Thanks again for the post. I look forward to following you and Cronhub more on IH and Twitter!
Hey Tigran,
thanks for sharing your thoughts and learnings on pricing. Have you considered a region-based pricing? I mean lower prices for countries with lower income. $7 might be not an issue for a dev in Europe or the US, but for a dev in India or the Philippines this is probably more a pain point... - Just an idea.
Cheers,
Peter
Hi Peter! I've not considered region-based pricing. I think it's a bit more complex than it sounds. However, the developers from low income countries can use the FREE plan :)
Yeah, I was just asking out of curiosity. Not even thinking I'll do it myself.
Very useful article for indie hackers. Thanks for sharing.
Thanks for reading.
Hey Tigran. Thanks for this write up and I especially like the monthly reports that you've been doing on the cronhub blog. I am very satisfied by the hands-on insights that I can learn from those. Great work!
Thank you, means a lot to me!