Rethinking product pricing.

27 Aug 2024

or Why traditional SaaS pricing models fail and what I’m going to do about it

Selling stuff is super hard. You need people to take a punt on what you’ve made, usually by lowering the sense of risk for them. You need their feedback to improve your design and also to advocate for your item.

But then you need to make some actual cash so you hike the prices and don’t worry about letting your early advocates churn because new customers will make up for it. It’s rough but it’s the system we’ve got.

Well I’m going to do something new.

Firstly, the product

It’ll be announced soon over at Deltastring.com but basically further to the book launch will be some software bringing additional capability to your Zendesk admin life. If you work in the Zendesk world, keep an eye out, but if you don’t, the answer is basically “business software” okay?

The Zendesk Cookbook, coming soon from Nico

Let’s not get bogged down in the detail there for now.

Alrighty what is the magic?

You’ve probably got a bunch of subscription direct debits for various things. I’ve got Tidal, Disney, Xbox, a couple others. Isn’t it exhausting each month to see which one has hiked the price this time? It doesn’t feel fair.

In the world of business applications, just ten months after you finally get that purchase approved to get the tool you’ve been needing, you have to haggle again with the provider. Their costs have increased, they have new features. Great, but your budget doesn’t automatically grow! You might have to drop the thing you are now used to using. Why?

At the same time, the software company providing the tool have to remember to come back ten months after each deal is done so that they can try and squeeze more cash out of customers. A reliably consistent percentage of the time the customer will cancel and this will feel bad for everyone. Also someone has to pay for the weeks of work in haggling the new contract and all this nonsense.

I’m not really interested in doing any of that.

Here’s how it’s going to work. I’m going to put my software on sale. It’s a subscription, because it will need to be updated regularly. Paying a subscription means I can commit to doing that.

It’s going to go on sale at a simply crazy £1 per month, then the price increases by £1 for every new subscriber. The hundredth buyer will pay £100 per month. If there’s a thousand, they will pay £1000 per month for the tool.

As long as your subscription remains active, your price will never change.

There isn’t enough value placed on loyalty in this world. You stick with me and I’ll stick with you. I don’t want to waste time, money, energy, and goodwill by haggling with my customers every year.

The early purchasers may have to deal with a product which isn’t fully realised. It’ll be missing features they would want. It’s not going to be perfect version one. They will be the people to help me make this the best it can be. They deserve reward for that.

Here are some questions and answers

If you have a question which isn’t answered here you can email me and I’ll get back to you and update this page.

Won’t this eventually price out any sales?

It sure will. I’m not looking to be Amazon where everyone has an account. I’d rather support a sensible number of users than let it grow unchecked. Of course, I’m not looking to deny anyone who wants this tool regardless of cost.

What if some competitor goes crazy and buys all the early subscriptions and then cancels it and then the price is too expensive for other buyers?

I’m not in any way tied in to doing this. I’ll just take their money and then reset the pricing.

Could someone skip a month and keep the same pricing?

Nope, every price is a one time deal. I need reliable and predictable income! I have a family.

Will you be doing free trials? This sounds interesting but we’d need a month to evaluate.

No. You can buy a month. If you can’t buy a month to try it out then you were never going to be able to raise the budget to pay for the tool in the first place. Free trials are bad for everyone. Plus, you get the price earlier, therefore cheaper.

Enough already, show me the thing

Be patient!