Pricing Experiment Update

So I just finished sending out a new email campaign in MailChimp to all my existing trial users.

It was a message letting them know that I was making a pricing change to their accounts. What was the change? Both the Basic and Premium plans will be dropping in price.

I had mentioned the pricing experiment towards the end of my last post. While I’m bummed that it didn’t quite work out, I hope some of my users feel good about pricing going down.

It’s almost 2 AM now so I’ll just quickly say that the problem with the increased pricing was that my signup conversions AND my trial to paid conversions both dropped. It made it so that the higher pricing will cost me money if I keep it.

Like I said, I’m a bit disappointed at the results, but it wasn’t a complete loss. I now have some great feedback letting me know what I need to work on to get to the higher pricing.

Five Minutes to a 10x Increase in Conversions

Bidsketch is a SaaS based product I launched just a few months ago. It’s proposal software made specifically for designers.

It’s only been live about six months, but I’ve tried a lot of things to increase conversions. Mostly, they’ve been centered around A/B testing since I was trying to more efficient converting users before I looked at increasing traffic.

Some of the things I’ve tested:

  • Taglines
  • Signup button text
  • Button designs
  • Number of plans
  • Plan details
  • Page headlines (pricing page)

You get the idea.

While I saw some improvement in a couple of areas, the increase in conversions was minimal. And as you can imagine, my revenue didn’t have much of an increase either. Not to say that I’m done with A/B testing, there are several tests I’ve been itching to run, but everything I tried paled in comparison to the one thing that resulted in ten times the number of paid conversions.

So what did I do to get such fantastic results?

I killed my free plan.

Yep, I killed a critical part of my sales strategy. I was freaking out when I did it, but I went ahead and gave it a shot. And with that simple change, I went from a 0.7% conversion rate on paid plans, to a 6.5% conversion rate while having the same exact number of users stick around past the 30 day trial period.

Increase in conversions on paid plans:

Paid vs. Free

When I speak of conversions, know that I’m talking about conversions from my pricing page.

Also, keep in mind that I ask for a credit card upfront;  so there’s more friction to my signup process than most people say you should have.

Free plan? Nope.

Credit card required to try? You bet!

The result? More conversions than you can shake a stick at! Not really, I still have my day job, but a ten times increase in conversions certainly helps.

What About Converting Free Accounts?

When I initially made the change, I was worried that I wouldn’t get any paid signups which would’ve been pretty bad considering that I didn’t have those free account users signing up anymore.

The problem with free users is that they don’t convert to paid plans very well. Sure, I’ve only been live for a few months and the goal with these users is to develop a long term relationship so when they need to pay for an account, they do it with you. Still, in the best case scenarios you’re looking at a 2% upgrade conversion rate with SaaS apps like mine.

That didn’t stop me from trying to convert those free users when they were coming in. I tried all sorts of things but most of it had little impact if any.

A few things I tried to convert those users:

  • Added additional upgrade prompts (at the key places when performing certain actions).
  • Sent promotional emails offering discounts.
  • Gave 15 days to try Premium features for free.

The best I was able to achieve was a 1% conversion rate on upgrades. Not that great considering how much time I spent trying to convert them. Now, compare that to the five minutes it took to kill my free plan.

What This All Means

So, given everything that I’ve learned from this you might expect that I would have regretted launching with a free plan. I can’t say that I do.

There was a nice benefit to having that free plan for the first few weeks: I had plenty of users to give me great feedback on how to improve Bidsketch. Plus, due to my launch strategy, the first week of my launch I had more people sign up for the paid account than the free one.

What I do regret is hanging on to my free plan once conversions to my paid plan started slowing down. Luckily I didn’t let it go for too long before I decided to experiment by removing that plan.

As of this moment, my conversion rate has dropped a bit due to a pricing test I’m running. The good news is that revenue has gone up! I’ll be blogging about that in a few weeks once I feel comfortable that those number aren’t a fluke.

The Sales Process Isn’t Complete Until You Have a Fan

Today I was listening to a great case study interview by Rob Walling from, and co-founder of the Micropreneur Academy. This is one of many great case studies found inside the Academy. The interview was with Harry Hollander, co-founder of Moraware.

Harry’s obviously a bright guy, and he gives some great advice in the interview. The thing that really made an impression on me had to do with his take on the sales process.

He says:

“We consider our sales process done when we have someone who is willing to be a reference and put a testimonial on our website, or do a video case study”.

I love this! This really got me thinking about how I handle my own sales process, and what happens once someone becomes a customer.

Admittedly, I’ve been looking at post-conversion phase in a big company sort of way. I’m used to thinking about customer retention due to my experience in the corporate world. That’s what it’s all about there. Once you have customers, you check in with them and make sure they’re happy, not to turn them into fans, but to keep them from leaving. There’s a big difference here.

Client retention is about doing just enough to keep what you have. On the other hand, turning customers into fans means you have to blow their freaking socks off.

This is much harder, but it’s also much more exciting. Not to mention the payoff of having a bunch of true fans is better than anything you’ll ever be able to pay for.

Bidsketch Public Launch

So I’ve now been live with Bidsketch for several days now. Things are going well still, though my paid signups have decreased as expected.

I’m going to be working on adding a new pricing plan to Bidsketch. Right now I have Free and Premium. I think a Basic plan will give people a much needed choice when I move up the pricing to $19/month.

It’s funny, now that I’ve launched I feel like I have more on my plate than ever. I’m managing two blogs, a Facebook account, two Twitter accounts, two products, and the most time consuming thing of all — the day job.

I think things will get a little less crazy once I migrate SixCentral over to Bidsketch.

On the SixCentral front, I let everyone know that I’ll be changing SixCentral’s name. I blogged about it, sent out a tweet, and an email to all users and newsletter subscribers.

Some more info on that here: