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24 Comments

How to test willingness-to-pay? Advice needed

Hey Hackers.

I'm building an app for designers and product managers called Klues.

It's going pretty great so far. I managed to get around 100 emails in just a couple of days, mostly engaging with communities on Slack, Discord and Reddit. I'm still planning to do a proper launch on PH, Hacker news, Designer news and a couple of FB groups.

So, right now, I have a landing page with an email form for people to sign up for early access. While collecting emails is great, I don't think it really validates the product. I'm thinking about taking the next step and test willingness-to-pay. My question is:

Do you think I should add fake pricing to the landing page and start measuring how many people go through the funnel? Or, should I continue collecting emails, then test the pricing through the user interviews.

I'd love to hear your thoughts.

  1. 5

    I am working on a product in similar space.

    https://saasmomo.com - Design inspiration for saas product builders, designers. I am concentrating on saas niche. So, everything in the product will be related purely to saas.

    With a decent success with my earlier product, I am validating this in parallel while I build the product. Note that I am also building the product here while I validate.

    The easiest way would be to show a pricing page and ask to subscribe people which plan they would go with. This is better than just showing a normal signup page. But the important things to note is to keep your leads warm by initiating a discussion with them and see why they joined on your signup form.

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      Why are you building product and validating it in the same time?
      Why isn't validation done before building?

      1. 1

        Part of the reason is I am using my own designs from https://content.siteoly.com/card-designs and the code base is pretty much ready for me as most of it relies on my other product Siteoly. Also, when I started building Siteoly, I gathered lot of data and designs and I have some content ready as well.

        While the best bet would be to validate it first and then start building. That is what I suggest too.

        This product has been an exception for me as I trying a new mechanism where I spend equal amount of time validating and building so that users get to see something.

        Validate -> Build -> Validate some more -> Build some more -> Validate more -> Build more.

    2. 2

      Ooh, great to hear, landing page is looking good. Let's stay in touch, maybe we can learn from each other.

      Good point about asking people to select a plan before subscribing, that's a great idea. You're not only collecting emails but also get some data and learn. However, I'm leaning more towards building the pricing page and try to get people through the funnel.

      When you mentioned keeping the leads warm by engaging. How do you usually do that? Just reach out through email and try to have a discussion or?

      1. 1

        Well yes. That is what I have done for my earlier product https://siteoly.com
        We have hit $1K ARR recently with Siteoly. So, I believe that process works.

  2. 3

    Hey Luka - advice from a sales guy here. Reach out to any one of those 100 emails. Include that video about 3/4 down your page. Say:

    Subject; their name/luke from klues
    Hey X,

    Excited to get your hands on Klues (you signed up after seeing my post on X, or something similar). To refresh your memory, it's 800 user-flow recordings to help you nail onboardings.

    Before I open up general access, I'm opening for my initial ten spots. I'm looking for people who want to shape the project with their feedback, and are ok at the $19/m price point. Of course, if you wish, I can always refund the presale.

    Thanks,
    Luka

    --

    Test it out on 10 people. Any responses? No? Adjust from there. Maybe pitch a call.

    But I highly, highly, highly advocate being up front here. Capture your value. I wrote a big post in Ideas and Validation on this last night. Good luck and trust yourself that it's ok to ask folks to pay you money.

    1. 2

      This reply is filled with value, thanks.

      Most likely, I think I'll do user interviews, instead of an email. Besides figuring out the ideal price point, I'd also like to learn more about the pain points so I can better my USPs and how I talk about them.

      Btw I read your post, thanks for sharing. I used a similar technique you mentioned when getting 100 emails for Klues, the rule of 100. Learned about it in the book by Russel Bronson - Traffic secrets. Highly recommended book for every Indie Hacker.

  3. 3

    Simple, put a BUY button on that website right now and start taking money.

  4. 2

    You should leverage the 100 emails you’ve collected and try to get a sense from people you trust.

    But before you reach out and ask for their pricing preference. Try to compile an alternative analysis as well. See how’s the price range within the same product category.

  5. 2

    I think showing a product pricing page is a very good idea as well. In terms of what price to put on those pages for validation, I'm a big proponent of value-based pricing... as long as it doesn't go too over the top. I'd look at how much time (or better yet, money) PMs or designers are wasting in coming up with initial designs, getting buying, and running tests on audiences. It might lead to two different personas to target (and hence, two different price points). PMs might be willing to pay a lot more if you can help them get internal buy-in faster.

    1. 1

      Thanks @sapsonic

      I'm planning to do user interviews with the people that signed up for early access, and my goal is to get to know how much of a pain I'm solving with my product, and how valuable it is in their eyes - how much would they pay for it.

      Then, equipped with this data, I'll build a pricing page and start either measuring the funnel or collect prepayments.

      1. 1

        That sounds like a plan!

  6. 2

    Hi Luka,

    At bundl.com, I have done more 'commercial validations' (as we would call it) than I can count.

    One thing we've consistently found is that what people say they'll do, and what they'll actually do, are two worlds apart.

    Hence, I would either go with a 'smoke test' (fake checkout) or a pre-order (at a major discount, with early access). You can limit the initial cohort to create exclusivity too.

    If you don't want to monetise yet, but still want to check willingness-to-pay, do so qualitatively. For instance: you can measure 'effort' as a proxy for 'payment'.

    The way this works is: Create extra barriers for sign up. Ask for referrals after, etc. The more effort people are willing to invest, the higher they estimate the value of your product, and the more likely they will be to pay.

    Price optimisation comes after validating willingness-to-pay. Do not worry about that for now.

    If you want to explore more validation options, I've created a free database of 52+ validation experiments here: https://airtable.com/shr46mds2fzr3ylWz

    Good luck! Let me know if you have any further questions.

    1. 1

      Thanks for your reply, Jelmer.

      I'm leaning towards a fake checkout, as you made a great point, there's a difference between what people say and what they do. Measuring their behavior is more accurate, and I'd definitely like to monetize asap. I think that's the ultimate validation.

      What are your thoughts on collecting prepayments? Would you advise I do that? Should I offer a full price or a discount for prepayments?

      BTW: I've been following you guys at bundl for a while now, and your business model was one of the examples we looked up to when we creating cloverlabs.io with my friends. Keep it up!

      1. 1

        You're welcome!

        Pre-orders aren't typical for tools like Klues. It is more common for info-products or physical products. Software, people often want to try out before they make a buying decision.

        I can see it work IF you make customers a great offer. I always try to reward people for being early. So maybe 'early-birds' can get a one-time-payment, lifetime subscription for a really good price.

        If you're unsure you can always A/B test it ;)

        Also, Cool to hear you've been following us!
        Cloverlabs looks cool.

  7. 2

    Hey @LukaMlakar

    Great stuff! I'm working on an inspiration tool for designers as well, I think your product is great!

    I am looking to test this soon as well one thing I had in mind which you can try as well is use Gumroad and use their Pre-Order feature, this will test their willingness to pay as one needs to input their credit card details, which shows the 'will'.

    So instead of the Early Access call to action, it will be a Pre Order Now call to action.

    You just have to set a release date from your Gumroad account for when you will release the product and once that date reaches their cards will be charged automatically and if successful payment is made you send them the resources via email, that will be automated by Gumroad as well.

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      Exciting, what's your product about?

      Great suggestion about using Gumroad, I wasn't aware of this feature. What happens if the product isn't launched, an automatic refund?

      Do you plan on charging the full price for the pre-orders of your product?

      1. 1

        It basically allows designers to browse through web apps with great UI/UX and get inspiration with them which will be available in Figma, and making a tool that allows you to convert html elements into Figma components. https://scantofigma.com

        For the release date, you would basically be in control of it, you can change it up until you are ready, it notifies the individuals as well so they won't get charged until then, it's not a permanent thing per say once it's set.

        I plan on giving a discount for pre orders then charging full price once launched.

  8. 2

    I'm building a freemium product so I am planning on acquiring users on the free tier before releasing a paid tier. Will probably do interviews and surveys of my users while crafting the paid tier.

    For apps that can't do the freemium thing, the Startups for the Rest of Us podcast has talked about getting users to prepay for features. Nothing validates someone's willingness to pay than having them actually pay.

    1. 1

      Thanks for your input.

      Freemium is a great way to build and acquire users from the start, but it can also be a trap. I don't want to write a line of code before I'm confident enough I validated the product and the pricing.

      Looks like I need to build a pricing page, and as @VictorKaranja suggested, try to get users to prepay for the product using Gumroad or something similar.

  9. 2

    Reach out to the users. Frame your ask as "I want to provide as much value as possible, how much would you pay?" List the features you plan to provide and see what they think it's worth.

    Alternatively, if you have ideas on what you want to price at, you can ask if $x is a reasonable price for x features. If just a fraction of them say you could charge more, you've priced too low. If you priced too high, they'll say something.

    Unrelated idea: Weekly (or daily) breakdowns. You walk users through one of the flows with reasons why it's great. This leaves you open to finding the actual UX designers, or unrelated prominent UXers, and having them do the breakdown for you (while Klues benefits from the extra exposure).

    1. 1

      Thank you for your reply, Randolph.

      So, you're suggesting, I should continue collecting emails and then reach out to users? I do have some ideas on how do I want to price Klues, and it's based mainly on how much competitors charge. The problem I have is how to test that pricing, through the landing page or later through email with user interviews or surveys.

      PS: Your unrelated idea is good, actually. It got me thinking I could be doing so much more before I launch the product.

      1. 2

        Continue collecting emails while you get everything settled. Ask the current cohort of 100 about pricing and features as soon as possible; you'll be surprised at how willing people are to help, and how much they appreciate their feedback making a difference.

        As @jch stated, get the next visitors in front of some dollar signs. Far too often, people push their product with no mention of cost. When your users don't see pricing, they assume it's free — when they see an added cost, they're gone with the wind.

        Since you have an idea of what you want to charge, I would go ahead and put said pricing on your landing page. Pricing around your competitors is good — adding features around your competitors is better. You can find their gaps when you look at reviews and comments about their product, users will often say why something costs too much, or why they love the price point.

        PS: Get the minimum launched, then iterate, iterate, iterate. Even if you just launch with 30 UX examples for free, you'll get your price and feature validation, you'll get more signups, and you'll likely come up with better ideas.

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