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9 Comments

Ask IH: [Pricing] Pay what you want vs. clear Free & Premium tiers

Hi fellow entrepreneurs,

I launched a service with "Pay what you want" pricing. There are no conversions :( and I can't tell why.

Once piece of feedback from a friend was that this pricing isn't clear. And it also shouldn't be free.

What do you think? Should I go instead with

  1. 4

    Definitely get rid of this pay what you want stuff. There is a concept called the paradox of choice. When presented with too many choices (e.g. infinite prices) a person will freeze.

    your product and registration flow are not very clear either. Are you spending any money on advertising?

    1. 1

      Thanks so much, Brian! That makes sense. I've updated the pricing.

      your product and registration flow are not very clear either.
      Would you have any suggestions of places that aren't clear?

      Are you spending any money on advertising?
      No. Since I feel there's value in the Free tier, I'll keep trying spreading the word. If people won't use the Free tier, I don't think ads will work.

  2. 2

    Another way of offering "pay what you want" is by providing a suggested amount with it.

    For example, Everlane does that with their "pay what you want" sale items. They tell you what costs go into it too so you have an idea in your head of what it's worth.

    1. 1

      Thanks Megan, that's an excellent take on "Pay what you want"!

  3. 2

    flip it.

    select and present one flat price for the product. if you feel whatever number you come up with is too high and people wont pay that much (literally thats the unfounded fear of all founders, especially here), then offer a button that says we offer special consideration for X type of founders. email here.

    other than that, make it super clear what the price is, for which features etc.

    do not make people decide or think about something like that.

    @mariusih

    1. 1

      Thanks ddx, appreciate your feedback! I've changed pricing to follow your advice.

  4. 1

    Pricing is about how people perceive your product. I ain't no expert on pricing but I found this article from Sequoia helpful: https://www.sequoiacap.com/article/pricing-your-product

  5. 1

    Interesting. I am literally about to sell a guide using samcart and "pay what you want" as a trial run to a particular community and ad platform from which most things are free. If I decide to stick with trying the "pay what you want" I'll come back and let you know the results.

  6. 1

    Agree with @brianbreslin. I think you should set pricing that reflects a fair price for the value your service provides users.

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