Richard White, unSEXY Presentation

Pricing for Conversion: The data behind purchasing behaviorRichard WhiteFounder, CEO

Paul BucheitCreator of Gmail, Co-founder of FriendFeed

Limited Life Experience + OvergeneralizationPaul BucheitCreator of Gmail, Co-founder of FriendFeed

Limited Life Experience + Overgeneralization = AdvicePaul BucheitCreator of Gmail, Co-founder of FriendFeed

Customer feedback & helpdesk platformOffices in San Francisco & Raleigh, NC100,000+ UserVoice sites onlineDesigned for SaaS, Gaming &MobileTens of millions of end-users182 people/sec see ourproductLots of data :)

ACT Ithe start

Feedback Launched May 2008 Timeline Development started Oct 2007 Private Beta Dec 2007 Public Beta May 2008

FREEAS IN BETA

Public Beta Completely Free 39% ACCOUNT GROWTH (month over month)

Public Beta Completely Free 39% ACCOUNT GROWTH (month over month)7000525035001750 0 April May June July August September October November

ACT IIget paid

50% ∆ ACCOUNT GROWTH (month over month)

Freemium Adding paid plans 50% ∆ ACCOUNT GROWTH (month over month) Plan MSRP Simply by announcing Free - new paid plans Silver $289 / mo Gold $589 / mo

Freemium Adding paid plans 50% ∆ ACCOUNT GROWTH (month over month) 200% ACTIVE ACCOUNTS

Freemium Adding paid plans 50% ∆ ACCOUNT GROWTH (month over month) 200% ACTIVE ACCOUNTS = 0% ∆ ACTIVE ACCOUNTS

Freemium Adding paid plans 50% ∆ ACCOUNT GROWTH (month over month) 200% ACTIVE ACCOUNTSWhat we lost by announcing paid plans werethe worst leads we had coming in.There was no net difference in activeaccounts.

Freemium Adding paid plans 39% ACCOUNT GROWTH (month over month)7000 Beta accounts5250 converted to paid at less than 1/4 the rate3500 of post-beta accounts.1750 0 April May June July August September October November

Freemium Adding paid plans

Freemium Adding paid plansLaunched with 5 plansdifferentiated by design,customization & integrationcapabilities.

Freemium Adding paid plansPlan MSRP % RevFree - -Tin $19 / mo 17%Bronze $89 / mo 42%Silver $289 / mo 5%Gold $589 / mo 35%

Discounts Successful 13% ACCOUNTS DISCOUNTED 52% AVERAGE DISCOUNT 17% LTV (vs non-discounted accounts) 17% ACCOUNTS RETAINED (vs non-discounted accounts)

Usage limits FailureUsage limits failed to drive upgrades.Upgrades actually increased by 33%when the limits were removed.

Changing Trial Length Failure*15 30DAY FREE TRIAL DAY FREE TRIALNo measurable impact onconversion rate or trial signups.

Don’t Require CCs Failure* Not requiring a credit card to sign up for a paid trial had no effect on conversions or trial signups.

ACT IIIthe model

Helpdesk Launched May 2011 Timeline Development started June 2010 Private Beta Dec 2011 Public Beta Mar 2011 Full Launch May 2011

Pricing OriginalPricing based on feature sets.• Very few upgrades because of large gaps between price points

Pricing Starting May 2011Kept same feature differentiation butswitched to pricing per seat.• Makes higher end feature sets more accessible• Revenue scales up with customer usage. More upgrade options

Results Switch to per seat model 22% ∆ DOWNGRADES 242% ∆ UPGRADES 26% ∆ ACCOUNTS (at 14 months post signup)Switching to a per seat model (from aﬂat monthly rate) had a big impactwithout eroding ARPC.

Discounts Things that worked LEGACY PER SEAT 13% 14% ACCOUNTS DISCOUNTED 52% 31% AVERAGE DISCOUNT 17% 3% LTV (vs non-discounted accounts) 17% 24% ACCOUNTS RETAINED (vs non-discounted accounts)

Trial Extensions Things that workedAccounts that extend their trial are...... 2.5X more likely to convert.... 5X more likely to upgrade.

Reactivations Things that worked 50% ACCOUNT REACTIVATIONS (churned accounts returning)On payment failures, prompt account admins todecide whether to reactivate to their previousplan or switch to free.

Annual Billing Things that worked9% PREPAID ANNUALLYA great, simple way to boost cash ﬂow.

Unknowns Things that *may* have workedSome changes need more data to deﬁnitivelyknow whether they worked...Migrating $5 plans to FreeHave a free offering of every product. Revenue loss was minimal.Don’t run billing on the weekendsPayment failures happen during the business week when people are around to recover from them.

Next Reduce the number of plans

Thank you Richard WhiteAny (easy) questions? :) @rrwhite

Thank you Richard WhiteAny (easy) questions? :) @rrwhite Join me at UserConf! The ﬁrst conference focused on how startups can give (& scale) great customer service. Go to UserConf.co for details.

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Richard White, unSEXY Presentation

by 500 Startups on Aug 08, 2012

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