Robin Blandford [ ByteSurgery.com ]

15/10/08 Finding That Price Point

DUBLIN, IRELAND - Today I’m looking at pricing Decisions For Heroes. I wrote this post about the beauty of unlimited during the summer. Time to dive deeper now and project figures from our beta period.

My investigation is based on my belief that…

• Free = Good
• Fixed Price Cap = Good
• Paying Less When You Use Less = Good
• Unlimited User Licenses = Good
• Charging By Tangible Costs (Storage etc.) = Good
• Charges Do Not Discourage Usage = Good

Chatting to users, it seems people like to work things out on a per user basis. i.e. “Ahhh, €60/Team/Month for us that’s only €2/User/Month”, that’s cheap. But I don’t like limiting users - users are free walking talking advertisements.

I exported anonymous data from the database to look at average member count vs. average rescue/training activities per month.

Yes! It seems there’s correlation, more team members, more activity. I’m now going through the process of calculating free, lower, and upper price-plans. I’m using a Google Docs spreadsheet and set a cut off for free and upper priced plans based on activity volume.

I then compared a set price per user (red line) that would fluctuate with number of members in a team (unaffected by activity volume) against a price per team (blue line) that would fluctuate across 3 price plans based on activity volume. You can see the 2 cliffs, you can also see where I’m missing out vs gaining money using bundles rather than charging directly per item.

Interesting stuff. More next week.

-Robin.

Tags: app, pricing, web app, web application

1 Comment

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01/05/09 Fred Herrera

Interesting as it’s pricing models wreck my head. You mind sharing formula spreadsheet without your numbers?

Thanks, Fred

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