I've been giving this talk for a few years now and decided to put it up on SlideShare. For some additional context you might want to reference two blog posts of mine: Pricing models, the freemium myth and why you may not be charging enough for your product http://bit.ly/1QYDYsO AND The Freemium Myth- more data http://bit.ly/22lvdjI

1. Pricing Thoughts
Seth Levine
@sether

2. These slides are available on
SlideShare
at bit.ly/sethonpricing

3. ADMIT IT …

4. ADMIT IT … YOU DON’T KNOW SHIT
ABOUT PRICING

5. SADLY, NEITHER DO I

6. The truth about pricing models
• There IS no truth
• For every “rule” there’s an example of
someone who did the opposite and was
successful
• You may think you are, but you’re not different

7. That said, here are some thoughts…

8. Beware too many pricing tiers
• Less is more
• 3 is ideal
• I can sometimes be convinced 4 is ok
• If you have more than that you’re making it
too complicated

9. Clear diff between pricing tiers
• Tiers generally aren’t about more they’re
about different/better
– Add discrete features with each tier (i.e., analytics,
or a workflow module)
• Don’t overestimate your customer’s ability to
understand your product features – MAKE
THEM OBVIOUS
• Use these higher tier features to promote
upsell in the product itself

10. If you do offer more with each level
• Make sure whatever feature you’re offering in
increments is extremely obvious (and it’s clear
to your users how much they’ll need)
• Consider an overlay model where tiers have
different features but allow one “by the drink”
feature to be purchased across tiers

11. Beware what you tariff
• This is a tricky one, but you want to be sure
that you’re not overly taxing the very feature
that drives value and engagement from your
users
• Pricing effects your customer’s behavior
• Make sure you understand your cost structure

12. The Freemium “myth”
• If your product doesn’t have a network effect
• If your product is relatively well known
• If you offer value right away to your users
Maybe you should charge for it (right away)

13. Charge more
• Don’t be afraid to charge a healthy price for
your product
• Consider if you have the “penny problem”
• You should lose customers because you’re
priced too high
• It’s easier to lower price than to raise it

14. How about your trial period?
• Rather than free, consider offering trials
• BUT limit the trial period
• Generally 14 days is plenty of time for people
to see if they like what you’re doing
• Manage the trials, don’t just wait and see (and
know what tips people from lookers to buyers)

15. A few more thoughts
• End in 9 or 7 (probably 9, although the
research isn’t 100% dispositive on this point)
• $1000 is better than $1,000.00
• Price for value (again – don’t under price)
• Does the 10x rule apply? At least consider this
• Value is absolute, not comparative
• Segment your customers

16. Salesforce
Sales Cloud

17. LeadPages

18. BasecampBasecamp

19. Survey Gizmo

20. Pantheon

21. Sendgrid

22. Follow-up Reading

23. These slides are available on
SlideShare
at bit.ly/sethonpricing

24. The end
seth@sethlevine.com
@sether