Don't insult me with your pricing (2019)

https://www.derrickreimer.com/essays/2019/07/01/dont-insult-me-with-your-pricing.html.html

by satvikpendem • 5 years ago

41 72 5 years ago

giorgioz4• 5 years ago

What do you think of the de facto pricing of SaaS companies where they list 50$ per month (PAID YEARLY).

Almost every SaaS pricing is doing this. At obe point few customers would write us and claim that our competitors were cheaper even though they were not. The yearly plan of the competitor was slightly cheaper than our monthly plan. That forced us also to play that game where we added yearly plans with the pay 50$ per month (PAID YEARLY) just to not look more expensive on a superificial comparison of our customers

benjaminwootton2• 5 years ago

They also like to put dark UX patterns around this. More than once I’ve had to request a refund after seeing a monthly price and then being billed for the annual price.

smoldesu4• 5 years ago

It's likely based around driving a sunken cost fallacy where the price is good enough to justify buying outright but the value is just good enough to force you to use it.

stavros3• 5 years ago

I had my service's pricing page say "$5 per year" and lots of people complained that $5 per month is too expensive. So I switched to "$1 per month (paid yearly)" and now get far fewer complaints for more than double the price. I consider it a tax on something.

https://imgz.org/money/

chias2• 5 years ago

I like your writing and presentation style :)

giorgioz4• 5 years ago

ahah yes that's a tax on being bad at math! XD

spurgu• 5 years ago

Frontpage still says $5/year (well it actually says "Like, $5/yr").

giorgioz4• 5 years ago

Another example of manipulation in pricing is the unit of measure of DSL speed. All ISP providers across all countries advertise their speed in Mbps which is Mega bit per second. Now remember that 1 Byte = 8 bits. No-one ever uses bits as unit of measure in anything yet ISP use it just to make their speed look 8x bigger than they are. Frankly this is a form of false advertisement that spreaded quick forcing everyone to adopt it.

advisedwang• 5 years ago

bit per second is a pretty standard way to measure network traffic. Just be glad they aren't listing baud!

The networking community historically follows a tradition coming from telecoms, which is why there is a bit of a cultural split between networking folks and other computing folks (software and hardware folks have more cultural connection to each other than to networking!)

Apenwarr actually traces this cultural and historical split forward [1] even to the difference between lower levels of the stack defined by IEEE standards (e.g. 802.11) and higher levels of the stack defined by IETF (e.g. IP).

[1] https://apenwarr.ca/log/20170810

cosmotic• 5 years ago

The telecommunications companies themselves screw up the numbers all the time. When you talk to their customer service, tech support, sales, etc, they will say 'megabyte' or 'gigabyte'.

giorgioz4• 5 years ago

Thank you for this insight! That WOULD make sense!

Unfortunately given the shadiness of pricing in telecoms I believe the pricing and unit of measure are not technical-based and the bits part is not because they are actually super technical about it.

ThePadawan• 5 years ago

I used to agree with you back in the 90s, when the only people who paid for an internet connection were somewhat technically aware enough to know what speed they wanted, but not enough to know the difference between bits and bytes.

Today? I would argue 95% of people don't know or care how many kilobyte per second their Spotify uses, or how many gigabytes per minute watching Twitch at 1080p uses.

1000Mbps might as well say "1000 fastitude".

soneil• 5 years ago

Bits per second is really the only honest way to sell linespeed.

Right from the start telegraphy used symbols per second because anything else gets difficult to explain (eg hello is 5 symbols, Hello is 7 symbols). 200 years later we've made this more complex, not less. If I send a byte, it ends up as approx 64 bytes on the wire. Which bytes do we count? Do we count inter-frame spacing?

Symbols per second for transit and packets per second for routing are the only metrics that are actually fair

benjaminwootton2• 5 years ago

The OP is a being a little sensitive. Though are lots of little tricks like this to get people to go up a level. They learnt it from restaurant menus and wine lists.

My pet hate currently is opaque “credits” and value based billing.

I saw an ETL tool earlier which charges on a per column basis. I’m sure that backfired over flat tiered plans.

newsbinator• 5 years ago

OP preempts this (whether you agree is another matter):

One might argue I am being overly sensitive – I beg to differ. I suspect this company’s intentions were not pure.
The product does not make sense for a hobbyist to use (it’s a tool for businesses). More likely, they’re hoping I will tell myself, “I’m not a hobbyist, I’m a real business!” and proceed to select a more expensive plan than I actually need.

dahfizz• 5 years ago

It can simultaneously be true that the company's intentions were not pure, and that OP is being overly sensitive to the naming of pricing tiers.

yreg• 5 years ago

I think any tool can find a hobbyist use. I think the developers could go even further – ask business customers to use the Startup tier or above.

They could even offer the exact same features for Hobbyist and Startups and differentiate them by the declared purpose of use only.

CaveTech• 5 years ago

ETL's are a hell hole.

Another ETL charges per unique primary key synced, ignoring the fact the systems with append-only databases could move the exact same _volume_ of objects as another system, but cost 100 or 1000x more because of an arbitrary uniqueness constraint.

Not to mention they also use a credit system which not only uses different tiers of pricing per credit, but ALSO credits have a sliding scale of value where syncing less rows has a higher marginal cost than syncing more..

You need a constraint solver to figure out pricing, it's madness.

nicoburns2• 5 years ago

I don't really understand the appeal of ETL as a service. I can't see what value they can provide over implementing it yourself. And I can see that it would become a royal pain if you want to do something they don't support.

jjmorrison• 5 years ago

I also refuse to buy anything that ends in ".99". And I also refuse to buy any product with advertisement because those manipulate me too.

jstx1• 5 years ago

I can't tell whether this is a joke or you've gone off the deep end.

beingflo• 5 years ago

While it does sound like a joke I agree to some degree. 3.99 is supposed to make me feel like its 3 bucks instead of 4 and my monkey brain probably can't override the initial emotional response. Knowing this I feel kind of insulted that they think I'm stupid enough to fall for it.

satvikpendem5• 5 years ago

You might be interested in this browser extension I found then, it rounds up prices ending in 99: https://chrome.google.com/webstore/detail/price99/mmceepjonb...

lloydatkinson• 5 years ago

You could try taking your medication

tptacek• 5 years ago

It seems like you could fix this trivially by switching "Hobbyist" with "MVP".

rgharris• 5 years ago

Great point. With this change the pricing tiers make perfect sense for companies/projects at any stage:

- MVP (was Hobby)

- Startup

- Business

- Enterprise

akerl_• 5 years ago

Alternately:

- Tall

- Grande

- Venti

- TheTierWithSAML

elryry• 5 years ago

Barnes and Noble has been doing this for a long time. Mark it up 30%, then mark it down 30% with a sticker that sometimes damages your product.

paul_milovanov• 5 years ago

Well! That's an honest-to-God discount then!

$1.00 + 30% = 1.00 + 0.30 = $1.30

then

$1.30 - 30% = 1.30 - 0.13*3 = $0.91

PROFIT!

conductr• 5 years ago

Pretty much all retail does this, and the general population generally like it. JCPenney tried going to "everyday low prices" once and it failed miserably. Now, they employ a system of discounts, discounts on discounts, rewards, credits, etc that essentially means you have no idea how much anything in their store will cost you. But, their customer's tend to like it that way.

rand846633• 5 years ago

I hope OP does not ever use amazon.

OJFord2• 5 years ago

It's a fair point, albeit not something I'd really thought of. The main one that annoys me is the bigger, highlighted, more prominent 'most popular' option... which.. usually seems really unlikely to be true? Especially when there's a free option, it just almost certainly isn't. Obviously the free option is never the prominent most popular option.

Meta point: 'don't insult me with your' tiny blog-in-a-sidebar & massive photo-content?

chias2• 5 years ago

To your meta point, I actually like that layout quite a lot. If you're going to put it in a column, why put it in the middle?

OJFord2• 5 years ago

Because it's where my eyes naturally/most restfully fall? I don't sit to, or facing, the left of my monitor.

Fair enough, author and you and others obviously like it - but follow that line of thought and why do we have sidebars? Why aren't they middle bars? Put the actual content to the side.

smoldesu4• 5 years ago

If you're selling your software with a subscription price, I will immediately click off your site. I'm not exaggerating that the moment you start trying to edge in on rent collection for marginal utility, my eyes glaze over and I stop caring about your product. You could be selling a magic wand that fixes my life and fulfills my every desire, but I'd have no idea because there's a $2/month subscription cost attached.

The reason why is principle. Build a good product, price it appropriately and people will come. I payed an exorbitant amount for a Bitwig license, but that was because they provided a product that made me happy and was a fair deal. No dark UX practices, no contract or perpetual payment obligation, just a transaction of money and software. I regret it less than my Netflix subscription, honestly.

satvikpendem5• 5 years ago

Build a good product, price it appropriately and people will come.

Unfortunately, much as I would like that to be the case, that's just not true. People won't come simply because you build it, in fact that's a common refrain heard in the startup world. People, however, will pay for subscriptions if they materially help them. And subscriptions are often the best for developers because software development is not static, there are always bugs to fix and features to add.

Arech2• 5 years ago

The truth is:

- some software requires constant maintenance. Subscriptions are the only way to make it possible.

- some software may cost damn lot to create so no feasible single payment exist to even cover the costs of creation (especially on the early stages of sw lifecycle [and/or] when marketing is poor, but the devs still need funds to proceed). Subscriptions are the only way to make the price bearable for the general public. Example: market of games for Android. Google has tought the public that many sw for Android is very cheap or even free - try to stay afloat on that premise without subscriptions.

- etc etc etc

I'm sorry that I have to tell you what to do (and nobody likes to hear such unasked advices) but you really should try to build your own product and make it successful. This is the only way to validate the viability of your "principle".

smoldesu4• 5 years ago

You basically stated one argument split into two bullet points, and then listed 'etc etc etc'. It's not even an argument I disagree with as someone who writes software for money, most of our infrastructure requires constant maintenance. However, you know as well as I do that nobody is really 'disrupting' anything in the business space anymore. I've seen entire companies built around the idea that someone has a hard-to-get CSV file with vehicle/networking/government/personal info, and they provision it to you piecemeal. That's an insult to my intelligence, and they know what they're doing. Same thing goes for any other company that's exclusively providing a fancy frontend to some worthless database, it's just a different permutation of the same scam.

you really should try to build your own product and make it successful

I have no desire to make a product. I'm a programmer and a server technician, not a product manager. The tools of my trade are free and openly developed, no amount of CI Pipeline startups will change that.

google234123• 5 years ago

Calm down author…. This just shows that people who search for insults will find them everywhere.

autoliteInline• 5 years ago

How about pricing tiers: 1, 2, 3, 4

sparrish• 5 years ago

Sounds like the SaaS was able to help you decide their service isn't a good fit for you.

If your usage and budget is on a hobbyist level but you're expecting business level support, you won't be happy with the service and they helpfully ruled their service out of your choices.

I'm sure if you keep looking you'll be able to find something that will give you the warm fuzzies at your desired price.

endofreach• 5 years ago

Thanks for all the tips in the comments, i just started working on the pricing. Finally gonna make sum bucks, eh!

vbo• 5 years ago

On the one hand, you have a million "growth hackers" espousing the benefits of optimizing this and that, including pricing, to extract the most value from your customers. On the other hand, some people are going to call you manipulative if you do it. As a customer, I filter through the bs and go with what I need. I also know an organization is likely to have some offputting "player" working, say, marketing, but the tactics employed at that level won't speak for their whole org and/or products. Maybe I'm influenced one way or another, but if I keep paying, you must be offering me enough value or I'll eventually walk away.

Yes, it would be great if pricing and marketing was always honest but I don't expect to see "We do our best, but we're often mediocre, so just go for the cheapest plan" anywhere soon.

Train the bs filter. It'll serve you well in this and many other cases.

kube-system• 5 years ago

I'm less insulted by the name of a tier than I am by what is more common: lower tiers that are crippled to the point of uselessness.

Johnny5552• 5 years ago

I don't care if companies try to insult me with their pricing (I'll gladly buy the "hobbyist tier" if that's what I need), but please, just publish pricing.

I hate when pricing sheets say "Call us for pricing" - just tell me outright, are you charging $5 a seat or $500 a seat? I'm not going to call or email to find out, I always assume that "if you have to ask, you can't afford it".

bradj• 5 years ago

That’s probably a pretty fair assumption. That barrier helps to qualify potential buyers.

Johnny5552• 5 years ago

You know what else would help qualify potential buyers, but do it more accurately? Publishing the actual pricing.

nottorp2• 5 years ago

Opt for metered billing over tiered pricing when possible

Hmm that does sound like the hobbyist tier. Depending on the tool, I'd go for predictable costs if it's a business expense unless it's part of the money maker plumbing and really needs to scale to unexpected demand...

kylecordes• 5 years ago

Metered pricing makes it hard to get approval to buy at many organizations. Simple metering (per user) is doable because the purchase department can pretty easily count heads. Complex metering, where you need someone with a deep understanding of the use the product, someone good at spreadsheet modeling, and somebody in purchasing all to sit down and agree together to buy your product? Ouch. You better be a FAANG-sized cloud provider or something like that, it’s going to be a grind.

nottorp2• 5 years ago

That too. But there's a good reason for that, metered pricing costs being almost unpredictable.

However, if you're a hobbyist who barely uses the service, you like metered pricing because it ends up costing almost nothing ;)

And this is what I'm picking on... the OP doesn't like the "Hobbyist" tier name but is actually a hobbyist.

js4ever• 5 years ago

I'm pretty sure he is talking about aiven.io, I had exactly the same though when checking their pricing. It's looking like a dark pattern to force you to choose a bigger plan

Cilvic• 5 years ago

Reminds me of this: "best price (for the company) is the one where customers complain, but are still buying"

cyberge992• 5 years ago

Price Anchoring is also why Costco places a large 85” tv and jewelry right at the entrance.

You’re more likely to buy a 10 lb (2 kilo?) bag of Gummy bears for $20 because comparatively it’s cheap!

imwillofficial• 5 years ago

This blog post is garbage. If the red line between you using a tool or not depends on the harmless word to describe a pricing tier, this is not a professionally made decision. You are, at best, making a hobbyist tier choice.

Don't insult me with your pricing (2019)

Related Stories