Do you have experience with country-based pricing?
Hi there,
Does anyone here have experience with country-based pricing (for digital products)?
To be more specific: my digital products are quite expensive and hence I mostly see people from affluent countries purchase them. However, I think that reducing the price in regions (for example with a lower GDP) I could increase the overall revenue.
What do you think? What are your experiences and best practices?
Looking forward to your answers.
In 2 companies (b2b saas, paid plan @ ~30 usd per month) that I worked at we attempted it and it was pretty much a waste of time. The impact was close to nothing and our conclusion was that ppl in Brazil, India,latam don't buy online not because they don't have income to spend but out of habit.
But I could be very wrong. Steam does local pricing and that's how I get games for cheap :) I believe due to the competition: in BR if a game is too expensive people will just go and buy a pirated one.
I guess it really depends on your industry and users
I don't represent Brazil so I will only speak about India. It has nothing to do with habit (maybe in some cases habit matters but not always) but it's all about purchasing power. The purchasing power is not good as compared to first world countries.
I used to choose to spend money on online shopping instead of buying offline but this was only in clothing section. Later I started started earning more as compared to other citizens and stopped minding spending money on other stuff like paying for Spotify, purchasing SaaS app subscriptions, paying for Ad free version of apps. Even in some case spending just to try SaaS app which was not necessary. Only thing this happened because of increase in my personal purchasing power. And same change I have seen in my colleagues.
For Indian, the thing that matters is trust level and support when needed. If they believe that a software company is legit and popular then they don't mind paying for that software.
I'm sorry man, but you're literally generalizing your personal behavior to +1B people.
Income for sure contributes to you spending more (it enables it) but the fact that a large part of the population in these countries doesn't spend online is not explained by income alone, thus the assumption that dropping prices will cause more sales is very iffy.
I maybe be wrong but ecommerce and other SaaS sector is really doing well as per my knowledge and experience. Walmart is no fool that it spent 16b USD to buy Indian ecom site Flipkart.
That is exactly my point.
The two Saas companies I worked for, saw no difference, just waste of time.
some companies do see benefit in doing so. See steam
Conclusion: depends on your vertical and users.
Yeah I agree with you on that. I didn't mean majority of population have good purchasing power but still even if 5% of Indian population have good purchasing power that mean 5% itself higher population than some of first world countries. So you can target cities like Mumbai, Bangalore, Delhi for good sales.
This "habit" is somewhat true. I live in a country where people still don't trust in credit cards not to mention buying things online.
I've concluded that people might buy online from famous companies (eBay, Steam, Amazon) but almost never from a random site they've stumbled upon.
Tech companies spend money online more easily but I don't know ONE brick-and-mortar business that spent a cent online.
Oh wow, I thought it was merely a function of purchasing power. Interesting. Is there a specific value signalling (e.g. banners, certificates) that would increase the perceived trust of a website in your country?
Of course. Are you a multi-billion dollar company that has been in business for years 😅 ? In that case, I can trust you with my card info.
I'm not going to give out my card info to a company that has been started a couple of months ago. It's a bit sad but true.
But if you opt-in to allow users to pay with PayPal, it's a different story. The downside is that PayPal takes a bigger cut of your transaction than something like Stripe.
Thank you very much. Interesting feedback! I guess I will need to run my own tests then to really see an actual difference.
It's definitely a fragile topic for B2C products. Some people will probably go great distances to get the cheap pricing. Some people will be upset about the difference.
You will also have issues to determine the users' locations even when they are not doing anything malicious. For example: I live in an Aegean Sea coast city (Izmir, Turkey) and I did see some geo location APIs mistaking me for being in Greece.
It will be way too easier with B2B, though. You can simply decide what to charge with their business address.
Oh, good point and indeed not that easy to solve I guess for B2C. Will keep this in mind going forward.
I tried a few plugins for WordPress. WPML, another paid option, but in then I use a free plugin called 'WooCommerce Price Based on Country (Basic)'. Simple and reliable, and free.
And how did this turn out for you? Did you get considerably better conversion rates / revenue in affected countries?
In all honesty, for this specific product, ( which is health related) , it made no real difference at all. But it was originally a GBP site being opened up to USD. I am trying it with EUR next. Sorry I can't offer you any insights.
No worries. Still cool to see that other people have the same thought / experiment with it too.
Many companies do this all the time and localize price without negative consequences. It's important to localize your offering too though. One important thing to consider is the competitive landscape in that country. You can price competitively depending on your value proposition and where you stand. Good luck!
You could get some inspiration from the big ones. If you compare the same model of Apple computers on its different country shop you will see Apple applies a coefficient appart from the different value added taxes.
On a personal level I discovered that some country are going to use different means of payment online appart from credit cards.
True, thanks for your feedback! Would you have statistics on the latter? Where should I prioritize Paypal over credit cards for example?
https://www.vapulus.com/en/online-payment-statistics-2019/
It's going to be easier with a focus on continent
Great, thanks! Much appreciated
I disagree with the other poster, I think you should go for it if it can be done in different currencies, but not if you have to show dollar amounts for everyone. Then I would agree with the other poster and say it will be too obvious. However, I have seen pricing pages where you click on different currencies and get different prices calculated automatically. That would work, and usually, you will find only people who have that currency will be paying in that currency.
Interesting. Your arguments steered my focus a bit away from the actual price difference though, and on a currency adjustment for UX purposes. I didn't think of that type of (minor) adjustment yet, but will try it! Thanks. Might be less invasive - compared to adjusting the price too already.
Here is an example of how Hubspot does it on their pricing page: https://www.hubspot.com/pricing/marketing?term=annual&edition=starter
The currency conversion appears on the left and floats as you scroll. They clearly charge different prices, but I haven't done the calculations to see if it's different or just a conversion rate from the regular price.
I'm curious how Hubspot handles the currency conversion.
Today, $40 USD = €35.58 EUR
But on their website, the EUR price is €36.80.
I'm sure it would be strange to offer their plans at differing prices based on the current currency conversions of the day, so they must take a snap-shot in time, and just leave it that price regardless of the fluctuating currency conversion.
In Hubspot's case, it doesn't look like they do a straight conversion.
Their COP price is COP120K (which is roughly equivalent to $33 USD), so they are definitely charging less in Columbia.
Ah, great example. Thank you.
This is a dangerous practice that will potentially expose you to negative criticism. It may feel extreme to point out, but imagine the following situation:
A user from a location where you charge lower prices is now located in a region where your pricing is the highest. They connect with a colleague back home, learn of the pricing difference, and go public with this information. You now run the risk of hordes of users using VPNs to get the cheapest pricing, and potentially being falsely accused of favoriting users due to nationality or race.
It's simply not worth the risk in my opinion.
Thank you very much for your perspective. Interesting thoughts!