Pricing Web Services: Step 1 - Three Buckets
In February 2005, 2ndSite went from Bronze-Silver-Gold (“three buckets”) package pricing to a total user customized pricing strategy. What’s better? Three buckets.
We switched because a handful of users complained about having to pay for things they weren’t using. You cannot please everybody all the time, but we decided to try. We switched to customizable pricing. Our new pricing did a lot of good for 2ndSite, but along the way we confused a lot people with the way we presented our pricing.
After spending time with Tom Wellner (2ndSite Advisor) over the holidays, we changed the pricing PAGE - but NOT pricing structure - on our website back to buckets. The pricing can still be customized when you upgrade, but we chose two of our more popular packages and presented them as buckets. Tom impressed upon me the importance of having your pricing in “three buckets” to make it SIMPLE. Basically we had been trying to please everybody and therefore we were confusing people with our pricing plan.
Again, what is better: buckets or custom pricing? Buckets. How do I know we learned this? Since changing the pricing page on our site, our sign-ups/trails have increased 30%. We had VERY good conversion rates prior to that. This bump is great. What’s amazing is our actual prices are identical, but just by presenting our pricing in three easy to understand buckets, conversions of first time visitors to trials have increased about 30%….that will affect our bottom line from here on in…Amazing the power of a single web page, no? You know what I find weird? The exact same number of people exit our website on the Pricing page as they did before. Had the redesigned page not been the only site change, we never would have been able to be certain about the BUCKET FACTOR. That is why we try to make on design change at a time and track the results.
I still have lots more to say about pricing. I’ll get to it. But step one is to think in buckets. Thanks Tom.
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