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You're Pricing It Wrong: Software Pricing Demystified

You're Pricing It Wrong: Software Pricing Demystified
Advertisement Pricing your own product is always a tricky proposition, and the more critical the price is to your product’s success, the more difficult it is to set. It’s easy to look at another product and say how much you would be willing to pay for it, but how can you know how much people would be willing to pay for yours? There are no absolute truths or perfect formulas for finding the best price, assuming that the “best price” even exists. Instead, take a structured approach to finding a good starting point, and improve it through feedback and testing. But first, you need to understand what the best price actually is. Riding the Demand Curve When we price a product, our goal (assuming we’re running a business) is to maximize revenue. Economic theory suggests that as we raise the price, the number of sales will drop. The sweet point is where the intersection forms the largest rectangle. Once you’ve determined what your product is, you need to consider its value to your customers. 1. Related:  SaaS

uk.businessinsider 4 Ways To Design Better Login Screens The login form doesn't immediately come to mind as something that needs better design standards. Once you think about it, though, it's obvious: How many times has a login screen coughed up a nondescript error, then refused to tell you if you got your password or your username wrong? Or how many times have you entered your login details, hit enter, then sat there for a minute, only to discover that you had to click the "submit" button instead? Over on its blog, analytics company GoSquared has posted an enlightening rundown of how it designed a sleek and frictionless login screen. Here are a few of the GoSquared team's takeaways: Logins should be effortless This almost goes without saying, but a login screen is just something people want to get past as quickly as possible. Have a physical login button These days, it's common for sites to allow you to login just by hitting "return" after entering your password. Correct mistakes before they happen Smart placeholder labels

How These 3 Companies Grew 1000% in Days “Growth Hacking” is a hot term these days, because growth is something that all startups need. However, despite the allure of this term, there is no magic “hack” that can universally drive growth, because each company is unique. In practice, growth hacking is simply the process of religiously integrating data analysis, optimization, and automation into your day-to-day marketing. In order to provide some clarity on growth hacking, I’ve analyzed the written experiences of some people who have “hacked”, or more accurately, enabled, staggering growth for their startups. They include: Glamour Sales (a Japanese flash sales fashion site which grew to 500K users in 1.5 years)Roommates (an app by ApartmentList whose marketing campaign received approximately 250K views in less than a week)Groove (A CRM tool that is growing its revenue by about 10% each month, and is nearing the $100K monthly mark) I’ve been able to find many similarities in their strategies and lessons learned. · Journalists Test

Characteristics of B2B unicorn ideas Varying characteristics There are also many non-essential characteristics that vary among the sample group: Market Dynamics: Attacking a new market (or overlooked market)Market Dynamics: Entering a highly competitive marketEnabled by a trend/changeFocusing on tech “invention”Obvious value propositionClear path to marketNo strong buyer powerNo strong supplier powerUnfair advantageMixed models (B2C2B, B2B2C) These characteristics vary between the companies so it seems that none are necessary characteristics. Market Dynamics/Competition In terms of market dynamic, there are two clearly different types of markets: Competitive markets with many trying to solve the same problemNew or overlooked markets Most unicorns are in very competitive markets, but where no-one has been able to create a winning product. Some find non-competitive markets and just understand a need that is not being served at all by current player. Obvious value proposition Unfair advantage Mixed models

Building Codeless Products I met with someone the other week who was looking for advice on breaking into product management. Given my non-technical background, I’m always happy to take those meetings and help more talented people make the transition. When I asked what she’d been doing to learn product, she rattled off the books she’s been reading and the blogs she’s been following — they were all the right ones. As we spoke more, she demonstrated that most essential of product manager traits: technical curiosity. She’d definitely learned enough to be able to talk the talk. Being a maker is the best way to learn product. Hearing this, the aspiring PM was a little rattled. “How can I make my own product? “Well, neither do I.” She equated making with coding, and I wanted her to understand that’s not always true. “But is a newsletter a product?” Sure it is. Codeless products are a great way to test hypotheses and build early traction. Going codeless is not just a great strategy for learning.

We Don’t Sell Saddles Here The memo below was sent to the team at Tiny Speck, the makers of Slack, on July 31st, 2013. It had been a little under seven months since development began and was two weeks before the launch of Slack’s ‘Preview Release’. It is presented verbatim, as written (including original pull-quotes), with two exceptions: the removal of an introductory section discussing launch logistics and replacement of a link which pointed to an internal company resource with the equivalent public link. Build Something People Want We know that we have built something which is genuinely useful: almost any team which adopts Slack as their central application for communication would be significantly better off than they were before. However, almost all of them have no idea that they want Slack. Therefore, “understanding what people think they want and then translating the value of Slack into their terms” is something we all work on. “Marketing from Both Ends” We are right in the middle of that first phase.

Slack is Rewriting the Rules on SaaS Pricing @OpenViewLabs Slack has won a lot of attention over the past few months, mostly for its high valuation and rapid growth, but there is much more to the Slack story than this. Slack is solving the internal communication problem through an elegant use of channels, search, tags and document sharing. But it is doing more than this. It is also rewriting the rules on pricing in a way that will impact everyone who has a subscription revenue model. How so? We use Slack at TeamFit for a variety of things and are planning to integrate, so we have had a paid subscription for quite a while. Now, like most people, I have had trouble with companies that make it hard to change a subscription (‘a commitment is a commitment’ they tell me). Is this an aberration? Evolution of Software Pricing Models (Note: These are representative companies — of course Oracle now has many offers based on subscription models.) Once upon a time people sold software by perpetual license and installed it on the customer’s hardware.

4 B2B SaaS Growth Hacks That Helped Bizible Raise $8M There are a few pipeline marketing growth hacks we used to grow Bizible significantly in the past year. It ultimately helped us raise $8M in new funding this August. We love helping others, so we decided to share what we learned while implementing our pipeline marketing strategy. First of all, what is pipeline marketing? Now, on to a few of the growth hacks... Proactive Live Chat Any company can improve their lead generation by finding new ways to communicate value early in the sales cycle. Like many SaaS companies, we use live chat on our website to connect visitors with sales. Use proactive chat. Having an effective proactive chat prompt is key. It is simply, “Welcome back! Bizible tracks all the marketing touches for visitors, so this is both a way to showcase a personalized view of the value of Bizible as well as create a lead for us. Create new reasons to ask for email information. Warming Leads Using Social For high-value prospects Bizible uses targeted ads on LinkedIn. Conclusion

Pop-Up Forms Suck! ...and Double Conversions. Share this article 152Share5 The fact is: an average Web surfer utterly loathes pop-ups. Imaging you are reading a cool post or want to click onto a website that looks inviting and – BOOM! A big-ass pop-up overlays the underlying page and impudently asks you for an email address. The natural reaction to such an in-your-face massage is to remove it as soon as possible. At the same time, multiple case studies show that pop-ups can significantly increase sign-up rates and improve conversion and sales. using pop-up forms and hover ads doubled sales and increased signups pop-ups forms helped to build an extensive list of prospective customers and enhance conversions These 2 mutually exclusive facts bring up a big question: “How pop-ups can be that effective while being one of the most hated form of Web advertising?” As usual, the devil is in the details. Why Do People Hate Pop-Ups and How to Change This? “People have a more positive attitude toward the least interruptive ads. Know Your Audience

Google Just Released Hundreds of Cool Icons That You Can Use For Free The Power of a Good Strategy When Mark Zuckerburg started Facebook in 2004, he wasn’t the first building a social networking platform. There were dozens of other social networking platforms before his – many with millions of dollars in funding and millions of users. Yet, he still managed to build the largest social networking platform on the planet. How did Facebook manage to win against bigger and better funded competitors who had a huge head-start over them? What is Strategy? Ask a dozen people what strategy means to them and you’ll probably get a dozen different emotionally charged answers such as this one: Strategy without tactics is the slowest route to victory. The term “strategy” first appeared in modern day management theory only in the 1960s but its roots date back to ancient eastern and western military philosophy. 1. as a plan, 2. as a pattern, 3. as a perspective, 4. as positioning, and 5. as a ploy. Strategy as How Strategy as Patterns Science is built upon the collective knowledge of many. 1. 2. 3. 4. 5.

How side projects saved our startup - Quartz We had no money. We changed our business model and had three months worth of cash left to turn things around. If we didn’t we were toast. We needed to find customers. A marketing budget? This was our situation a year and half ago at Crew. Things like blogging work but can take months before they have a big impact. Building a great product to generate word-of-mouth is a must but that takes time too. Even though we were working on these things, we needed to find a way to accelerate “normal” growth if we were going to survive. Around this time, we were creating the homepage of our website. Instead, we hired a photographer and took a bunch of photos at a coffee shop. A $19 Tumblr theme and three hours later, we had a site called Unsplash, with 10 of our best extra photos and a link back to our homepage. Here’s a screenshot of an early version of Unsplash: What happened next floored me. “Dude, happy you enjoyed the photos! I went back to HackerNews to check what might be going on. 20,000 visitors.

43 lessons growing from $0 to $1+ million in revenue, twice I realized the other day that we’ve grown from $0 to $1 million with two separate products (HelloSign and HelloFax). This happened a long time ago, but I was recently reflecting on the lessons. I found a lot of growth truisms to be false. We’ve learned a lot. Here are our lessons: 1. Every founder I talk to has a good reason for not charging for their product and it’s usually a bad reason. 2. Charging is a powerful indicator that you’re building something people want. 3. YC and Paul Buchheit often say find one user and make her happy. 4. After one board meeting, our investor said, ‘you have a distribution problem, not a product problem.’ 5. Cheaper and better is another truism I found mostly false. In fact, I met one CEO who deliberately priced his product higher than his competitors, just to get them to ask, ‘why’. 6. It turns out that distributing to businesses takes money and effort. Being ‘cheaper’ and ‘better’ really just makes it so you can access less people. 7. 8. 9. 11. 12. 13.

How to Sell to SMBs And Still Get to $100m in ARR There’s a certain type of SaaS company I run from. This type of company has great customers, a great product, and decent customer acquisition costs, in an interesting space. A true winner if you stop there. But … It sells to SMBs for anywhere from $5 to $199 a month. I sort of run at those price points. Why? If you are doing true self-service freemium at say $5 a month, that can work at DropBox scale. And if you have a sales-driven model, selling to SMBs, at $199 or $299 a month … well … if you really work hard, you can still make the math work even with an inside sales team. So what do you if you find yourself in either of these scenarios? You just gotta raise prices. First, Just do it. Sell team-based and larger deals. Upgrade the team. Anyhow $5-$10 a month for self-service and $199-$299 a month for inside sales to SMBs may be a fine place to start. But after just a few million in ARR, you’re probably gonna need a new longer term plan. So at least try some things right now.