Pricing for Conversion - Data on SaaS strategies at UserVoice - UnSexy 2012
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Richard White discusses UserVoice's experience with different pricing and monetization strategies over time. They initially launched as a free public beta in May 2008 and saw 39% month-over-month account growth. In Act II, announcing paid plans in addition to the free option led to a 50% increase in account growth but no change in active users, as lower quality leads stopped signing up. Under the freemium model, they launched with 5 pricing tiers differentiated by features but saw few upgrades. In Act III starting in May 2011, they switched to per-seat pricing rather than flat monthly rates, which increased downgrades, upgrades, and total accounts by over 200%. The presentation provides examples of strategies that were successful like discounts
Pricing for Conversion - Data on SaaS strategies at UserVoice - UnSexy 2012
- 1. Richard White Founder, CEO Pricing for Conversion: The data behind purchasing behavior
- 2. Limited Life Experience + Overgeneralization = Advice Paul Bucheit Creator of Gmail, Co-founder of FriendFeed
- 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 :)
- 5. Feedback Launched May 2008 Timeline Development started Oct 2007 Private Beta Dec 2007 Public Beta May 2008
- 6. Feedback Launched May 2008 Timeline Development started Oct 2007 Private Beta Dec 2007 Public Beta May 2008
- 8. Public Beta Completely Free 39% ACCOUNT GROWTH (month over month)
- 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. get paid ACT II
- 11. 50% ∆ ACCOUNT GROWTH (month over month)
- 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. 50% ∆ ACCOUNT GROWTH (month over month) 200% ACTIVE ACCOUNTS Freemium Adding paid plans
- 14. 50% ∆ ACCOUNT GROWTH (month over month) 200% ACTIVE ACCOUNTS = 0% ∆ ACTIVE ACCOUNTS Freemium Adding paid plans
- 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. 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. Freemium Adding paid plans
- 18. Launched with 5 plans differentiated by design, customization & integration capabilities. Freemium Adding paid plans
- 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. 13% 52% 17% LTV (vs non-discounted accounts) 17% ACCOUNTS RETAINED (vs non-discounted accounts) ACCOUNTS DISCOUNTED AVERAGE DISCOUNT Discounts Successful
- 21. Usage limits failed to drive upgrades. Upgrades actually increased by 33% when the limits were removed. Usage limits Failure
- 22. No measurable impact on conversion rate or trial signups. 30DAY FREE TRIAL 15DAY FREE TRIAL Changing Trial Length Failure*
- 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*
- 25. Helpdesk Launched May 2011 Timeline Development started June 2010 Private Beta Dec 2011 Public Beta Mar 2011 Full Launch May 2011
- 26. Pricing Original Pricing based on feature sets. • Very few upgrades because of large gaps between price points
- 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. 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. 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. Trial Extensions Things that worked Accounts that extend their trial are... ... 2.5X more likely to convert. ... 5X more likely to upgrade.
- 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. Annual Billing Things that worked A great, simple way to boost cash flow. 9% PREPAID ANNUALLY
- 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. Next Reduce the number of plans
- 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.