I've recently the post on the question: Subscription Pricing Starting Strategy: start high and lower, or start low and raise? , and I also read the articles and comments for:
- QuickSprout: Customer Are Always Right, Except When They Are Wrong
- OnStartUps: How To Price Software Without Rolling The Dice
I'm working with a friend that's providing a web application to small businesses and entrepreneurs. The initial thought was to start at a low price because this particular business owner wanted to make it affordable for everyone (not to please everyone, just make it affordable for most people). I used to think that was a good idea. Now, after a few voracious reading sessions, I'm starting to get mixed opinions. Partly because I didn't consider things like customer support and the TYPE of people it attracted. So, I have 3 questions:
1) What are the advantages and disadvantages of pricing a monthly subscription low, and then pricing it high?
2) What would you say is the "sweet spot" that still attracts customers, but doesn't attract the cheap ones. I realize this question is very subjective, and you probably need more background on what this business does... at the moment, the business owner isn't sure yet (all in planning), I'm just curious on any two cents you might have (eg. $99/month typically deters most cheap-folk)... although, I'm not sure this is answerable.
3) I'm a fan of simplicity and I advised that 1 price with 1 plan is a good idea... but maybe a 3 or 5-tiered approach is better. What are your thoughts on 1 plan versus 3 or 5?