Wanted to share the thought process that went behind our very dramatic price change this week - from middle of the pack to most competitive in the market - thought the journey might be interesting!
This week was an interesting one at Billsby. When we envisaged Billsby, we decided to go with 'just below mid-market' pricing for our subscription billing solution.
We knew we couldn't beat Stripe Billing's $1,000,000 free trial - so we didn't see the need to try for the 0.5% end of the market. Besides, we had far more features - much easier to embed checkout and account management, custom fields, real time usage tracking, automatic tax handling.
So we settled at 0.8% with no monthly fees - making us cost competitive with Chargebee, significantly cheaper than Recurly, Chargify and Zuora, but priced at a premium to Stripe Billing.
And things were looking good. We've been adding about 5 new companies per day on average, who've been developing and integrating Billsby and giving us great feedback and review scores. We were happy with the pace of growth, but knew we had the capacity to accelerate if an opportunity came about to so.
Then, a couple weeks ago, Stripe Billing took away their $1,000,000 free trial. And we took stock. We knew that we were significantly easier to integrate than Stripe Billing, had far more features (like the cool tax stuff!) and thanks to lower than expected cost per acquisition (and the fact we'd avoided loss leaders like lifetime deals, so we weren't relying on cross-customer subsidy), we had the opportunity to compete.
We modelled lots of different prices and scenarios internally. Did we go down to just above Stripe Billing (because we still believed we had the better product?). Did we maintain our margin advantage? Or did we go all the way in?
Ultimately, we decided on the latter. Billsby now costs just 0.4% of revenue. Cheaper than Stripe Billing, Recurly, Zuora, Chargebee... basically everyone we've found, and with significantly more feature richness. There's a bunch of cool roadmap stuff around the corner, and we're still offering a $5,000 free trial and no monthly fees.
Why? Because we realised we didn't want to be mid-market anymore. We want to make billing better and more affordable. And we're banking on the idea that a significant margin hit will deliver significantly more customer growth and we'll come out on top.
Time to find out!