Which of these 2 pricing plans in most sensible?
So recently I made a post about an upcoming product and one indie hacker pointed out that my pricing was too low. I've been a little conflicted, I don't want to price too low and give the impression that the service is of low value, but I don't want to price too high and scare off customers either. I've done some brief reading on pricing and come up with two potential pricing plans and would like to get your opinions in it.
The product is https://www.booklyapp.com, a crowd-sourced library for your office in Slack (but can also be a normal office library system).
Pricing #1
- Tier1: Free trial for 30 days, after that it costs $10 per office location per month
Pricing #2
Tier 1: Free for all locations, 0-10 books per location
Tier 2: 0-50 books per location, $10 per location per month
Tier 3: Unlimited books per location, $25 per location per month
#2 seems more appealing to me - I think you'll find that companies who love the product will hit that 10 book limit pretty quickly and you'll be able to get paid faster. Getting money earlier on can make a huge difference with your cash balance and business overall.
$10/location seems fairly cheap too, so I like the 3 Tier concept as well
Thank you, I'm leaning towards this one too :)
If you ever want to upsell, the tiered approach is the way to go. Just by adding an unrealistic tier 4, you will see that tier 3 sales increase. Add to that the user's feeling of being in control of costs and I'll expect the second approach to be the favourable one. Whether the numbers make sense (up to 10 books free could be 3 books) is a matter of testing. I wouldn't be surprise that if you add an element of scarcity (subscribe now before prices go up) drives interest up further.
Yes been reading a lot about price anchoring lately. Feel like additional tiers give me more leverage. Thank you!
pricing #1 is simpler to understand, but suspect if you aren't sticky enough you'll have a ton of people dropping off.... may be better to hit them with 30 day MBG
pricing #2 makes a customer have to think a bit too much IMO.... so what if I have a location that needs 100 books and another location that only needs 8, I don't necessarily want to pay 25$ for each location when some are under utilizing.
also, what happens if one location wants to cross share books with another one? makes me think that charging per seat / employee, instead of locations could be a big win as well (although that may change how your app even works if it's all built around locations)
Hmm good points, I'm leaning towards option 2 as money back guarantees are a bit messy too. I like the idea of a free tier rather than a cutoff as books can be loaned over months until value in the product is seen. I think I need to encourage as many people to use the product as possible to increase my number of advocates pushing the credit card holder to pay. I get how messy multiple locations can be though, need to think more about how many companies will push for multiple locations.
Thank you!