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Pricing for Conversion - Data on SaaS strategies at UserVoice - UnSexy 2012

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Pricing for Conversion - Data on SaaS strategies at UserVoice - UnSexy 2012

  1. 1. Richard White Founder, CEO Pricing for Conversion: The data behind purchasing behavior
  2. 2. Limited Life Experience + Overgeneralization = Advice Paul Bucheit Creator of Gmail, Co-founder of FriendFeed
  3. 3. Customer feedback & helpdesk platform Offices in San Francisco & Raleigh, NC 100,000+ UserVoice sites online Designed for SaaS, Gaming & Mobile Tens of millions of end-users 182 people/sec see our product Lots of data :)
  4. 4. the start ACT I
  5. 5. Feedback Launched May 2008 Timeline Development started Oct 2007 Private Beta Dec 2007 Public Beta May 2008
  6. 6. Feedback Launched May 2008 Timeline Development started Oct 2007 Private Beta Dec 2007 Public Beta May 2008
  7. 7. FREEAS IN BETA
  8. 8. Public Beta Completely Free 39% ACCOUNT GROWTH (month over month)
  9. 9. 0 1750 3500 5250 7000 April May June July August September October November 39% ACCOUNT GROWTH (month over month) Public Beta Completely Free
  10. 10. get paid ACT II
  11. 11. 50% ∆ ACCOUNT GROWTH (month over month)
  12. 12. Freemium Adding paid plans 50% ∆ ACCOUNT GROWTH (month over month) Plan MSRP Free - Silver $289/ mo Gold $589/ mo Simply by announcing new paid plans
  13. 13. 50% ∆ ACCOUNT GROWTH (month over month) 200% ACTIVE ACCOUNTS Freemium Adding paid plans
  14. 14. 50% ∆ ACCOUNT GROWTH (month over month) 200% ACTIVE ACCOUNTS = 0% ∆ ACTIVE ACCOUNTS Freemium Adding paid plans
  15. 15. 50% ∆ ACCOUNT GROWTH (month over month) 200% ACTIVE ACCOUNTS Freemium Adding paid plans What we lost by announcing paid plans were the worst leads we had coming in. There was no net difference in active accounts.
  16. 16. 0 1750 3500 5250 7000 April May June July August September October November 39% ACCOUNT GROWTH (month over month) Beta accounts converted to paid at less than 1/4 the rate of post-beta accounts. Freemium Adding paid plans
  17. 17. Freemium Adding paid plans
  18. 18. Launched with 5 plans differentiated by design, customization & integration capabilities. Freemium Adding paid plans
  19. 19. Plan MSRP % Rev Free - - Tin $19/ mo 17% Bronze $89/ mo 42% Silver $289/ mo 5% Gold $589/ mo 35% Freemium Adding paid plans
  20. 20. 13% 52% 17% LTV (vs non-discounted accounts) 17% ACCOUNTS RETAINED (vs non-discounted accounts) ACCOUNTS DISCOUNTED AVERAGE DISCOUNT Discounts Successful
  21. 21. Usage limits failed to drive upgrades. Upgrades actually increased by 33% when the limits were removed. Usage limits Failure
  22. 22. No measurable impact on conversion rate or trial signups. 30DAY FREE TRIAL 15DAY FREE TRIAL Changing Trial Length Failure*
  23. 23. Not requiring a credit card to sign up for a paid trial had no effect on conversions or trial signups. Don’t Require CCs Failure*
  24. 24. the model ACT III
  25. 25. Helpdesk Launched May 2011 Timeline Development started June 2010 Private Beta Dec 2011 Public Beta Mar 2011 Full Launch May 2011
  26. 26. Pricing Original Pricing based on feature sets. • Very few upgrades because of large gaps between price points
  27. 27. Pricing Starting May 2011 Kept same feature differentiation but switched to pricing per seat. • Makes higher end feature sets more accessible • Revenue scales up with customer usage. More upgrade options
  28. 28. Results Switch to per seat model 22% ∆ DOWNGRADES 242% ∆ UPGRADES 26% ∆ ACCOUNTS (at 14 months post signup) Switching to a per seat model (from a flat monthly rate) had a big impact without eroding ARPC.
  29. 29. Discounts Things that worked LTV (vs non-discounted accounts) ACCOUNTS RETAINED (vs non-discounted accounts) ACCOUNTS DISCOUNTED AVERAGE DISCOUNT 14% 31% 3% 24% 13% 52% 17% 17% LEGACY PER SEAT
  30. 30. Trial Extensions Things that worked Accounts that extend their trial are... ... 2.5X more likely to convert. ... 5X more likely to upgrade.
  31. 31. Reactivations Things that worked On payment failures, prompt account admins to decide whether to reactivate to their previous plan or switch to free. 50% ACCOUNT REACTIVATIONS (churned accounts returning)
  32. 32. Annual Billing Things that worked A great, simple way to boost cash flow. 9% PREPAID ANNUALLY
  33. 33. Unknowns Things that *may* have worked Some changes need more data to definitively know whether they worked... Migrating $5 plans to Free Have a free offering of every product. Revenue loss was minimal. Don’t run billing on the weekends Payment failures happen during the business week when people are around to recover from them.
  34. 34. Next Reduce the number of plans
  35. 35. Thank you Any (easy) questions? :) Richard White @rrwhite Like this talk? 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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