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Difference between revision 3 and current revision
No diff available." Raise prices, even if nobody's buying
One of the best pieces of advice I received this year was from Cory Zue. He suggested that at $0.003 per request, my prices for Zestful were too low. At the time, Zestful had almost zero paid users. How could my prices be too low if nobody was buying?
Though Zestful had few real customers, it had many prospective customers. Every few weeks, a new company contacted me saying that they were interested in Zestful, but it was missing one tiny feature they absolutely needed. Desperate to win my first big client, I'd work feverishly to implement the functionality they wanted. A week later, I'd proudly deliver it to them.
“Oh, yeah,” they'd reply sheepishly. “That was for a project we decided not to pursue.”
It cost these companies nothing to ask for features, but it was extremely time-consuming for me to meet with them and implement their wishlist. I recognized what was happening but couldn't figure out a way to stop it. Ignoring the request was an option, but what if they genuinely were prepared to spend thousands per month?
When I took Cory's advice and raised prices, it changed the conversation in an unexpected way. At $0.003 per request, nobody tried to negotiate with me on price. When my rates jumped by 6.5x to $0.02 per request, everyone started asking about volume discounts. Then, when they claimed they'd buy after Zestful had their pet feature, I gave them this line:
Great! You can pre-pay for three months of service, and your billing cycle won't start until that feature is available.
I've never been burned on a feature request since.
My prices are high enough that most customers have to spend a few hundred dollars each month to use Zestful, which discourages people from telling me about the all-important features I'd have to implement to earn their $5/month. Interestingly, the customers who ended up purchasing enterprise plans had no feature requests, and those deals closed in a matter of days. " -- [1]
"It wasn’t worth the painfully long sales cycle that came with offering a 45-day free trial PLUS the option for a whopping two week trial extension. Major facepalm. At the longest, users were not going to convert until 2 months after initially signing up. This made assessing product-market fit an unnecessarily long process. Also, very few users opted to extend the trial after 45 days which was unsurprising– if a user is still on the fence at day 45, they probably won’t be subscribing." -- https://lunchbag.ca/lunch-money-mistakes/
"I’d like to eventually get Lunch Money to a point where it is worth $8/month and until then, I’m offering lifetime percentage discounts. I started off with a 30% discount for Cyber Week which had great reception. Afterwards, I lowered the discount to 20% off which amounts to $6.40/month. Based on the rate of new signups and a user feedback survey I sent out a few weeks ago, I’m confident the current trial length and monthly price are both reasonable for the time being." -- https://lunchbag.ca/lunch-money-mistakes/
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