Pricing Update: Feedback and Lessons

(tl;dr If you just want to check out the feedback we received and our responses, scroll down about halfway)

Pricing SIDEKICK has been an ongoing struggle for the last 18 months. Over the last year and a half we’ve read blog posts, text books and articles, we’ve spoken to advisors, community members and potential customers in an attempt to put a value of what we offer.

Two weeks ago we threw up a pricing test balloon and asked you to help us with your feedback. Here’s a summary of what we’ve learned and how we’ve responded to your input, this stuff may not be groundbreaking (or maybe…) but it is certainly something we all need to remember from time to time.

Cost is nothing. Value is everything.

Customers pay for value. If a widget costs you $1.00 but you can get $5.00 for it, all things being equal and it’s not necessary to sustain life (like say, medical care) charge $5.00. Our biggest mistake when we started discussing price is we were trying to determine what it would cost us to support our platform and each customer not what the value of our platform was to our customers. When you price based on cost, you leave money on the table. When you price based on value, everybody wins. (Side note: The trick is now to find a nash equilibrium where we are maximizing both our revenue and our value, that’s where testing comes in aaaannnddd that’s another blog post)

 

If you can’t explain it in 30 seconds, you don’t have it yet + Pricing shouldn’t make a customer want to punch something

If your pricing model isn’t easily understood in 30 seconds or less, go back and try again. That doesn’t mean it should take less than 30 seconds to read necessarily, you may have a tonne of features to explain but people should understand what your different offerings are quickly.

Which leads us to our final point. People make buying decisions with their emotions. If your pricing doesn’t speak to them, either because your icons are wrong, you’ve called your packages something that doesn’t make sense to your market or worst of all, your model is so convoluted your customer wants to punch something rather than click the Buy button, try again.

The best way to know if your pricing causes people some form of rage is to test. Ask. Involve your customers. You are too involved in your product to see the forest for the trees.  So is your team. 

 

SIDEKICK Pricing Feedback & How We Addressed It

And so, we did and the feedback we got was great. Some of it was obvious to us but we are glad to have it confirmed and some of it was unexpected.

Here’s a summary of the top comments & questions we received and our responses. If you don’t see your question here, please drop us a comment or email and we’ll reply to you directly.

 

“I don’t understand which category I fit into!”

This was a big one. In fact, the only angry message we received related to this issue. We’re sorry about that, please don’t punch anything.

This issue was a symptom of our unwillingness to admit that we need to focus on what’s ready to roll. So, when the new site launches you will notice that we’ve eliminated the WordPress Plugin/Theme pricing as well as the Non-WordPress pricing. When Composer for those purposes is ready, we will release pricing accordingly.

 

“I don’t like the idea of limits on plays, domains or Walkthroughs”

We heard this one quite a bit and we debated how to handle it. In the end we agreed, as we hope you do, that there needs to be some kind of way to scale up because value increases with usage of SIDEKICK but friction needs to be minimized.

So thanks to your feedback we’ve eliminated almost all limits. WordPress Website Developers will see their packages scale based on the number of Walkthroughs they create and that’s pretty much it. Plugin/Theme and Non-WordPress may scale differently based on value but we pledge to keep friction as low as we can. 

 

“Your starting price point is too high” and “The gap between your price points is too wide”

This comment speaks to a common pricing problem. “How do we sell to everybody?” The tough answer is, we don’t. We’ve tried to put our starting price points where we feel we will see the highest revenue for value ratio. We also need to consider how many customers we can support and still be awesome (and sleep). With that in mind, starting price points won’t be changing, however that doesn’t mean they won’t in the future. As for the scaling between price points, again, we think we’ve identified which customers will fall into each category, what our value is to them and what it will cost to support them. Only time and testing will tell though.

 

“You’re under-pricing yourselves, raise your prices”

We actually did get three of these comments so thank you if you were one of the people that thought it or submitted it.

 

“Your pricing is too complicated”

Another common one. Pricing was WAY too complicated. 5 or 6 package points, friction everywhere, it sucked. So again, beginning with our WordPress Website Agency and Freelancer customers, you will see only three packages, simplified to meet your needs, with very little friction. When we release our Theme/Plugin Dev and Non-WordPress pricing we will endeavour to keep the same structure.

 

“Your prices are too high”

What you really meant was “Hey, I don’t see the value here!” and that’s cool. Not everyone is going to be our customer, some will choose to use freeware or open-sourced libraries, some just don’t see the value in saving 10 hours a month on support. Whatever your reasons or thoughts, keep the feedback coming and again, only time and testing will tell for sure.

 

“SaaS has no place in WordPress” and “I will only ever pay a flat fee for a plugin”

I saved this one for last because it really hit home. At least 15% of the messages we received contained a message similar to this one and frankly, those who believe this are wrong.

SIDEKICK is  is more than just a plugin, it’s a SaaS Platform because our content requires constant updates (at least 4 major WP releases per year) and we are always reinvesting to improve and build on what we’ve done. In other words, SIDEKICK is never done. On the other end of that is that fact that you, our customers, are continuously deriving value from our product and expecting said product to work now and in the future. We’re happy to ensure that’s the case but not for free.

Put another way, if we accepted a one-time, flat fee for our work and then provided unlimited updates, three things would happen:

  1. We would never see a return on our investment and our customers would never see the value they’ve paid for
  2. The quality of our product would never really improve because we couldn’t afford to add new features or do much more than bug fix
  3. Our prices would go up exponentially because we would need to make sure we’re covering the lifetime COSTS of a customer. Not a smart way to do business.

To those who believe SaaS and WordPress don’t mix, think again. SaaS ensures the security of an eco-system and an incentive to continue to build awesome stuff. If you’re willing to take advantage of the hard work of WordPress developers, expect updates, support and functioning software but aren’t willing to help cover the bills, kindly exit stage right.

Some developers offer their plugins and theme for free, forever, some even support their free software but these people are doing you a favour, not the other way around.

 

Until next time!