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[Music]
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thank you
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hey everyone this is WP product talk the place where every week we interview an
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experienced WordPress product owner on strategies and tips experiences failures
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and successes of running successful and thriving WordPress product businesses I
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am Matt Cromwell co-founder of give WP and director of customer experience at Stellar WP and I'm Katie Keith CEO at
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bond2 plugins so we've got some exciting news this week
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um we're going to make a change to WP product talk which is that starting on July the 12th we're going to have four
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rotating co-hosts instead of just Matt and myself so our two additional hosts
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are Zach Katz from gravitykit and Amber Heinz at equalize digital and they're
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both fantastic product people they've both been guests on the show in the past so if you've been watching you know how
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good they are and we're really excited that they'll bring additional insights and share their experiences
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um so there'll be a different combination there'll be Two Hosts each time plus a guest just like you're used to but we'll rotate between the four of
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us so you get those additional perspectives yeah I'm really excited I was really happy that they were both
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open and interested um and um excited to mix things up make things interesting for folks yeah
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uh and with that in mind today's uh topic is pricing for the Right audience
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not just pricing but making sure that you're actually setting your pricing in a way that matters to the people you're
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trying to sell to specifically um yeah yeah and this is a great topic because
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customers will only buy your product if the pricing is right but it's surprisingly hard to get that pricing
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right absolutely and today for this we're bringing on a person I've got to know a
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little bit over the last couple years who I'm excited to have here Hans skill rude Hans welcome
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thanks for having me yeah can you give a short little intro to who you are and what you do yeah
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um my name is Han skillrude I'm one of the co-founders of termageddon uh termageddon is an auto updating website
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policy solution so we provide privacy policies terms cookie policies consent
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Solutions all the things that we know everyone loves about websites and can't
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wait to get involved in so um we have been known to provide a little bit more of a uh more boring kind
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of topic as it relates to websites um but you know the fact is regulations are entering our space and we as website
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owners have an opportunity to respect people's privacy rights by providing them the disclosures we're required to
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provide them yep absolutely nice well thanks so much for being here
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um on this subject in particular I win uh you and I first started chatting I was definitely interested in the Privacy
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right stuff for sure uh and your wife Donata does a great job uh as a legal expert in the field
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um which is also cool that to have another uh WordPress product shop that
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um is a married couple like Katie is as well um and the colemans at paid members is
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pro it's a unique thing I think it's cool but one thing that stood out to me was the way in which you have monetized
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your product um and as we get into the first subject of
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um why anybody should care about this subject at all I'd love you to give us a little bit of context on how dermageddon
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is monetized yeah absolutely so um we tried to make things as simple as
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possible for end consumers um where we just have one price point it's 99 a year granted July 1st it's
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going to go to 119 a year um but this one price point covers a full set of policies for one website we
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felt like that was very straightforward and anyone could digest that pretty quickly be like okay I get all the
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policies I need to comply for one price and I think that's really resonated in our Market because when doing our
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competitor research prior to starting term again um it was quite clear that there was a lot of confusion with a lot of uh one
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with a lot of our competitors providing an array of price points that that cost confusion so Point number one was let's
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have crystal clear pricing we don't try to upsell people on like a per Privacy Law basis or anything like that you know
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our mindsets either you're either compliant or you're not so let's give them a price point that people can just
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no this is what I'm going to pay I'm not going to be up sold along the way nothing like that
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um so that's how direct customers pay us but really I think what brought us to having me come on to the show was really
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our agency partner program um so as a former web designer who built many websites for clients I would get
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asked the question all the time you know for my clients what should I do for my website policies and my immediate
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thought was well I'm not your attorney I have no idea like you know why are you asking me your web designer well that
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was our motivation for why we created term again and it turns out this is kind of like a industry-wide issue it turns out like
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just about every small business owner asked their their web agency first so
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um we decided we wanted to invest our entire business model basically into forming relationships with people who
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build websites for other people and um to form the relationship with a
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product like to form a partnership with these agencies um we decided let's give our license for
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free to them forever um so we give agencies um in you know single freelance web
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designers um a free set of our policies forever and we do that in the hopes that they're willing to take the time to
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apply to be a partner and we actually manually review these people who apply and we approve them or reject them but
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um if they have a working website and they offer Web Design Services we approve them right away and send them
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into our custom welcome email sequence which teaches them not only how to get set up with their own policies but to
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learn the basics on what policies are so they don't have to be sitting there lost and confused about what policies do so
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our goal is to during that onboarding sequence like yes you got something for free we manually vetted you that gave us
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an opportunity to send a personalized welcome email to them and then they receive a series of emails that educate them on why this stuff is important why
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it's becoming more important and how they as an agency partner can educate their clients about website policies let
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their clients decide if they want to comply with laws or not and give them both reseller and affiliate
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opportunities to offer our solution to their clients so agencies can make more recurring Revenue while helping protect
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their quantities that's fascinating I think it's really really interesting and a really great approach
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and honestly I don't feel like I've heard any other um uh WordPress product shop that has such
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a strong approach like that Katie have you heard anything of doing that anywhere or anything that
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sounds completely unique and really thinking about who the audience is and how to really appeal to them and you're
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absolutely right about the pain point when we were doing web design people would all the time ask us for gdpr
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policies cooking policies all that and we were I don't know I'm not a lawyer so you do something template based from a
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very unofficial website that you're never that confident about so yeah I get the pain Point as well as being
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impressed by the pricing strategy yeah thank you yeah and another uh key aspect
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at least I found valuable is for like resellers um because we were able to manually approve these agencies
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we were able to unlock the ability for them to buy wholesale rates one at a time so an agency partner because
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they're approved because we manually reviewed them we know that they're an agency so we actually set up their
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accounts so that they can just buy licenses one at a time at a fraction of the retail price so that they can resell
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it to their clients make a little recurring revenue on top uh while you know helping share the license with
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their client and ensure their client gets protected yeah uh do you feel like that has gone well for those clients are
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are they actually turning a bit of a profit on that front or do you get that kind of info uh actually it's funny that
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you say that Matt um I think last month we decided finally to like look into it a little bit um and I'm pleased to say
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that uh we found out that our our agency partners are uh in total
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um making over a million dollars a year in recurring revenue from us oh um and that was like we just and it's it's it's
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it's quite a bit more than that um but it's not over 10 so like we did we we only want to say the number you know once we we surpass certain thresholds
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but it's over a million a year in revenue and I I was quite astonished to see it myself
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um and I'm pumped um yeah I don't think agencies are going to get rich off term again but I do think they're going to be making you
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know I I like to think of it is you kind of get like a 13th month of hosting and maintenance fees kind of with uh by
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offering a solution like term I gotten because that's where it kind of lands at in terms of profitability
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that's interesting I think uh I think another one like when I was also a freelancing building websites to other
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one I often got pegged with was uh SEO and it's like like can you make sure my
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website gets on the front page of blah blah blah I'm like I could try
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that might be an interesting model for uh yoast or uh rank math or those types
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of folks to think about as well I don't know do you think that that would translate to other types of services or products at all hunts yeah so uh that's
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such a great call I would build websites for clients and right before site launch they're like oh yeah we also want SEO
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like it's like the three letters they know in the alphabet and now all of a sudden they want it and it's like we've already
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budgeted for your website we never set aside even a conversation to have about this and
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um so I I can relate to that um and yeah I would encourage you know I feel like so many uh WordPress product
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owners want agencies to embrace their product and I can't think of a better
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way than to offer it for free to them so they can Tinker around with it and test it out and see if they like what they see
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um that ability has been very liberating for us because because they get the free license you know there's and they know
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they need it you know policies are always falling into that I know I need it should I put in the time to get it kind of done that's kind of the space we
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live in and then they kind of learn about okay these are legal requirements like we as professional agencies do need
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to educate our clients on this stuff so we can protect our own agency when building sites for clients and once they
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kind of unlock that in their mind like oh yeah I should probably get it documented that I told my clients it's their responsibility to comply with laws
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not mine you know that that kind of messaging really resonates with them and I think there's a lot of uh products in
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the space that could that could leverage a tool and and yeah I guess when I when I kind of reflect and think about it um
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there's a company in Chicago called Trunk Club which is a very fancy group of people that like will do your apparel
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shopping for you and like and like well like um you know um give it close and I obviously did not
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accept if you can't tell for my 10 Amazon shirt but uh um but I remember I had to apply to be
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like a member at Trunk Club and and I was like okay what's this all about so I apply and then like a day later I got
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like a personalized response and I'm like this is interesting like that's that's really cool I really appreciate
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it felt like there's an actual human on the other side actually vetting me and and that's what we applied to term again
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and we Yeah we actually review your website we actually do have thoughts about your dog like head of head of
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marketing you know and they have like a dog photo on their about page or something like we like that stuff we're people too and um it's just a great way
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to form a relationship and and really build a true partnership in my opinion you know that could be relevant for all
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sorts of plugins and or WordPress products anything that the agency is likely to use for multiple clients you
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could have that relationship give them free apps but assess for themselves or whatever and then that would get that
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loyalty so I think it does apply much more widely yeah it gives you an opportunity as an
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as a business owner to form a relationship and like and that relationship can do volumes for your
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your work because you build that trust and we're in a space where there's very little knowledge or a lot of confusion
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so we can clarify things with them over a call or through email or things like that and get them confident not only in
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how do I address these regulations as a web agency owner on an ongoing basis but
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how do I also help my clients understand this and and I think for now the
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communications we have whether it be automated or just on a phone call um they seem to be going well
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nice well let's jump into um that's a lot of good context
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um for what we want to talk about um we're talking about broadly speaking pricing for your audience in particular
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and it sounds like uh Hans you really had web agencies in mind when it came to this partner program in particular
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um and uh we all have our target audience in mind um without going too deep we don't want
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to go into like why you need a target audience or things like that but like once you have a target audience identified how do you go about the
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question of like pricing um why is this subject so important for WordPress product owners Katie I'd love
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for you to kick off what do you think okay for me it's yeah you're right you choosing an um audience and Target your
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pricing at it that's fine but a lot of product companies have multiple audiences so for example when we've
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surveyed our customers at Barn 2 about half of them are individual website owners or woocommerce store owners the
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other half are web designers agencies that sort of thing doing it on behalf of
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somebody else so what audience do we target we have two split audiences so
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that makes a kind of dilemma with the pricing and we've implemented various
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strategies for this such as offering options so different prices based on the number of sites obviously agencies would
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be attracted to the higher sites with the discount per site and also a choice
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of like Lifetime and annual because another dilemma if you have these kind of split audiences is that some agencies
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in my experience have different approaches with regards to renewals so some of them will if they've got an
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ongoing relationship with their client they're happy to pay that annual subscription on behalf of the client
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others are designing a website and they're moving on and so they either need to transfer it to the client which
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is a real problem um with certain payment gateways and then you're likely to lose the subscription uh or they just want to pay
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lifetime so they don't have to worry so you have to think about your audience with regards to the type of pricing as
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well as the amounts and things like that so it's an important and challenging topic
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absolutely uh and what's your take why is this such an important subject for any WordPress product owner
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oh well piggybacking you know off of um what was just shared um I think uh knowing your audience is
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obviously important and sure enough we've seen the same thing agencies either have a very Hands-On approach
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which is I'll be your point of contact for all website related stuff for which we created the reseller program where
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agencies can buy one at a time at wholesale rates and then agencies that are like I'm a very hands-off person
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I need the client to pay so we created the affiliate program where we pay recurring commissions for the lifetime
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of each referral um uh so so yeah we we definitely had to adhere to both and one thing I did not
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see coming was how popular the affiliate program was going to be because naturally I'm more of a reseller I'm
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like I want you know I want to have everything in one place for my clients and that's all there and I'll I'll control it because typically my clients
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tend to not even didn't know how to like log into a portal um and um but the but I was shocked to
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see a very large uh percentage of our audience our agency partners are um
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doing the affiliate program very happily doing the affiliate program where the they have nothing to do with billing client pays us directly and we just pay
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the agency um recurring commissions um so thank you for the the referrals so
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um when pricing things out I I you know I certainly reviewed our competitors
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um and really where we honed in on was we want to we we have to have a subscription and that was kind of a new
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thing we kind of interested reduce the market which is you can't just have policies anymore you have to have a strategy to keeping them up to date over
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time you know prior to us going live today we were just chatting how Texas just passed their Privacy Law two days
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ago from the time of this recording um which requires no disclosures of applicable to your business so that's
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kind of an introduction we provided in the space which is static privacy policies are a thing of the past like
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you have to update this over time it's lost change um so we knew we had to have a
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subscription model when we looked at our competitors there were certainly people that were saying they're free but then you go to the checkout experience and
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you're being up sold along the way and then paying like 500 up front um which doesn't I don't know I get a
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really icky feeling like I thought I was getting something free and now I'm looking at a bill for 500 like that's
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just I don't know not cool yeah um and then other ones where it's like we have more of an A La Carte approach where you
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can tack on little aspects I didn't feel like that fit well with policies because policies are already like overwhelming
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and concerning and scary why do we need to make pricing that as well like let's
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make that the easy part so that we can have them focused on you know generating truly comprehensive policies for their
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business nice we landed on 99 a year because
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um uh we felt like it was a price that we would be happy to do this service and um
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we felt like just about any Small Business website owner could afford it um and I know we're going to talk about failures later but immediately thinks
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about a failure I think we did which is that I do we have some billion dollar businesses using us but I think a lot of
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the bigger businesses turn their turn away thinking okay a company called termageddon for 99 a year there's no way
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they could fulfill my complex business and unfortunately I think we've missed a
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lot of business by not having a higher tier plan uh for uh companies making like over 25 million in revenue for
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example um so I think maybe we'll address that one day but for right now we we certainly love the Simplicity of our
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price points nice no that's really good point really interesting
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um I think from my perspective why the subject is so important is because uh
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mostly from a business perspective um that you want to make sure that you find that right balance between what is
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your audience willing to pay and how profitable can you be
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um and there's there's this Spectrum which at one point you just get just beyond uh
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um where your audience is willing to pay or you end up targeting only higher end
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customers um and um and then also the profitability like you said like are we
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willing to do this at 99 a year on the the are we willing to do this side uh
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for me it's about um your what they say in the in the business cogs your cost of goods sold in
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the product WordPress product business the biggest Cog that you're going to have is often technical support uh quite
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honestly because development is really classified differently but technical
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support is your your cost of goods sold and for me I've often had that lined as
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well is that I don't want to provide access to my team for less than 99 a
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year generally speaking because they're experts and they know what they're doing and we provide really high quality
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support So as much as possible I want to try to get that up at the same time with
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give in particular we offer a spectrum of products we have a whole bunch of
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add-ons and you can buy them in bundles or plans and so it's not only about
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thinking about the individual price of each individual add-on which we do have a couple that are like 79 for example
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and that does happen sometimes where somebody will get that only that 79 add-on and that to me is just a little
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bit of a discount um but as a whole we're looking at our average job size
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um and um when currently right now the give WP average job size which is
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essentially like the average amount that an individual customer will pay at the checkout for their entire checkout
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um our average job size is currently 240 and um on average when I compare that with a
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lot of other WordPress products we're on the on the higher end definitely not the highest end but most of them that I find
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tend to be around the like 115 125 150 maybe sometimes they're sub 100 and when
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they're sub 100 then I I find that to be problematic um but average job size I think is a
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really significant one to be paying attention to um and uh especially in light of your
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costs of goods sold um because you want to be able to find the right balance of like how many if
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your cost of goods sold is primarily your technical support team how many technical support tickets are you
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generating per sale and then you start to see well how much does it actually cost me to sell this
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product and that's like really really nuts and bolts
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um practical boring business language of why I think pricing is so important I
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feel like that took a long time to get there but no that's great it reminds me of um is an agency owner I had to learn
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this the hard way and we've seen the memes problem we've all seen the memes where it's like an image and it says
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client budget and then another image and client expectations how much they differ and what I would
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bet is you know the lower you the more you lower your prices the
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higher your technical support is going to increase because from my experience the people that are paying us our lowest monthly fee they don't even do annual
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they do monthly they tend to have them the highest expectations they're basically asking us for legal advice at
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some points where we have to stop them be like you know we're not a legal service writer you know we can't tell you what to do here
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um and so I I would say you know always are people that race to the bottom that
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I don't know I I I guess I wasn't born for that I wasn't born to how do I offer
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our cheapest product ever because I'd rather I'd rather focus on how do I provide quality support because it
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doesn't matter until it does matter quality support and and that's why yeah that's how we kind of also considered
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our price point like anything below 99 a year I don't get terribly excited for and and sometimes can tend to drive in
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some um less than favorable customer bases too absolutely
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nice well I'd love to jump into our personal stories uh personal experiences
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with this subject in particular um and oh I have me up as first so I
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what I'll say is like from the give WP perspective uh we often is in the
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WordPress world uh people will often be like well what's your non-profit discount and uh especially at word camps
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I'll have folks come up to me and ask well I give to BP what's your non-profit discount and sometimes I just repeat the
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question back at them you're asking a donation platform what our non-profit discount is is that your question and
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they went well I guess I don't know like that as soon as they hear it out loud back they're like I I guess all of your pro
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your your customers are nonprofits I'm like we do Target non-profits like that's our target audience like we're
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trying to get them so like does that mean that everything is at a discount or do I need to provide a non-profit
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discount to our target audience probably not um and so one way we went about it from
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the very beginning and I went and I pulled up a a canned response that we have uh from like years and years and
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years ago um and one thing that we really try to do is just emphasize why our pricing is
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what it is um and we say really clearly we know the pricing is important for you uh it's
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important to us too um and we put a lot of thought into our pricing and our goal is uh two-fold that
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we're going to deliver the value that you get out of the pro out of what you pay us um and that we're going to price in a
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way that is sustainable so that we continue to be here for you in the long term um that's kind of like the way that we
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positioned our pricing for the non-profit organizations in particular or even why we answer them and saying we
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don't have a non-profit discount because that's our audience um
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and that all honestly in the in the very beginning um for the first I would say five years
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of give WP I was actually really strict that we don't offer discounts ever under
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any circumstance we never offered any discounts and it was because I wanted to say that this is the cost of the product
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um things have changed a bit we definitely have discounts now now for sure uh in different ways but we also
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have increased our pricing over the years to make sure that there is a gap or there is space for discounting and
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that's really more of a marketing strategy than anything else um so that's part of it another big part
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uh like everything I said earlier about like cogs and uh the average job size and all of that really came about
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through our last big pricing experiment um which uh happened um in uh 2021 and end of 2021 we did a
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major revamp to our pricing strategy and that was me just like digging in as deep as I could into the history of how often
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do people buy and what is the average price point that they that they buy at how many of the individual add-ons did
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we get compared to the plans or the bundles that we were selling um how often were we getting individual
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people individual add-ons to upsell into plans um and all of that and that type of Deep
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dive research really is a lot more effective when you have several years of data of course but I think even uh for
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brand new folks who are maybe a year into it it's worth looking at for sure but it starts to make a lot more sense
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when you're at least two or three years in I would say because in the course of one year you're having to adjust for
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seasonality um you're having to adjust for for all kinds of things um but
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the other really interesting experience I have recently um is having a conversation with James
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Kemp uh from Iconic who also has a product called orderable
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um and he has a lot of folks who use orderable our web agencies also
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um they serve um uh delivery shops like storefront
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shops that do delivery services in different ways primarily food restaurants and things like that but
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also flower shops and other things um and the requested a web agency that
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serves those customers will often have is whether or not they would white label the product they they want to kind of
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own that client as much as they possibly can and if it's like I see a third party
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law third-party logo in my website then you know that means it's it's somebody
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else so they want to not say orderable they wanted to say my agency orders or
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whatever um and the conversation there is mostly around like well
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um how do we price that and in my mind the feedback that I gave was generally
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is that folks who want white labeled want essentially to be able to make money off of the product that you built
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um and in that case we're talking about a large multiple
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um uh if that if that's their intention and their motivation my mind is similar to folks like um back in the day theme
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uh Forest uh theme authors would often want to bundle your product into their
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theme um and it's because they want to be able to make money off of your product and then you know you're never gonna they're
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gonna own that customer and not you and um I think it can be very problematic
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um but as soon as that comes into the question then I think the pricing conversation changes a ton yeah so
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those are a couple of my experiences recently so that's good you know that's interesting because we have never ever
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had anybody ask to White Label one of our plugins and I think that is because
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we don't brand the admin we go we integrate it as much as we can so it
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will be like the settings page will be hidden amongst the woocommerce settings or something so I suppose if you're
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getting into like having a top level admin link called orderable or something
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like that then that opens the door to people saying hang on and we need to White Label it because we we actually
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have a competing product to order a restaurant plug-in and nobody's ever asked for that so that's really
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interesting yeah obviously they've got the more prominent branding than what we have which can benefit them in other
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ways to other audiences yeah for sure in the early days of give we had some folks
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ask for white labeling as well and we don't even put like our main level menu
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item just says donations it doesn't even say give but it does have the give icon there here so it's like give icon
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donations and then it doesn't really say a whole lot about give until you get into our settings right now
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um so but that was for some reason it was only early on in the give um uh history I haven't heard a white
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label request forgive in a really long time that's why you need to listen to your
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audience I suppose that even different similar products will generate different requirements in the audience yep exactly
31:16
yeah at our beginning we got the white label question a lot we get it less now which is interesting Matt that you you
31:22
also have experienced that um but um I I certainly think there's a time and place
31:28
for white labeling I don't think that is when it comes to Legal compliance and policy so
31:34
um I actually tend to tell agencies you know technically you could white label us but I wouldn't recommend it because
31:40
you know you won't be able to take advantage of the fact that you can share our license term we gotten licenses with your clients so we can email them
31:47
directly when policies are changing why they're changing if they have any new questions they need to answer so I
31:53
always try to acknowledge the inquiry just saying hey I totally understand the value of white labeling like you know
31:58
I've light labeled as an agency owner before when it comes to Legal compliance I don't think it's a good fit
32:04
um and here's why and I kind of share that so I think um uh one thing that if you are considering white labeling uh
32:11
Matt talked about just having a higher multiple of a of a of a fee there may be um just a flat out licensing fee you
32:18
could charge um maybe on an annual base or something or some or something um some kind of fee to kind of gain
32:24
access to that type of offer um where you're kind of leveraging someone else's product to offer hopefully a more you
32:32
know some sort of combination of other things that you offer as well yeah that's similar to what Igor is saying
32:37
here as well it might be interesting with licensing of products at least those on for sure oh nice
32:44
um yeah uh cool Katie what about you what's your story time on uh pricing
32:50
[Music] um so I've already talked a bit about how we offer different options to
32:56
attract different audiences like different numbers of sites and lifetime versus annual so I think for story time
33:02
I'll share a bit about how we come up with our pricing because all plug-in and theme companies need to think about that
33:09
so um we constantly evaluate our plugin and use an elastic pricing strategy where we
33:17
look at the data every few months for every single product and the conversions and things like that over time and make
33:25
decisions to experiment and change we do that with the help of Ellipsis
33:31
um the marketing company we work with and James particularly Ellipsis is very good with data and so he does a really
33:39
deep dive through our sales and conversions and everything and looking at the different factors and trying to
33:44
take out anomalies like Black Friday and Christmas and things that might have affected that and make as objective as
33:53
possible recommendations about how to adjust our pricing so once we might go
33:58
from 99 to 119 on a particular plug-in and and then we'll reevaluate that and
34:04
see how that goes and so we're changing the pricing all the time which is
34:10
complex when we have 21 products in Easy Digital downloads each with quite a lot
34:16
of variations so we've actually done some custom stuff where we have a spreadsheet a Google sheet which
34:23
automatically syncs with our website to update all of our pricing on a weekly basis we also have all multiple
34:30
currencies so that's even more pricing options so that all comes through this spreadsheet which links in with live
34:37
currency data and pushes it all so that we can quite easily make price updates whereas if we
34:45
had to update it I did I used to do this manually actually and we have over a thousand different prices on our site
34:52
and I I used to do this manually for like Black Friday and things it was ridiculous so I'm very happy that my
35:00
developer Paul has made this easy so now I can just change the price in seconds
35:05
whenever ellipses make that recommendation sounds like a glorious spreadsheet I
35:11
like that that spreadsheet sounds powerful that's awesome you should see that the four meters in it
35:20
and it rounds to this uh because oh the other thing is um what do you call it psychological pricing um known something
35:28
value perceived value or something like that where um you want to end everything in a nine or something but it's more
35:35
than that like you don't want to charge say 139 for something you may as well
35:40
round that up to 149. similarly you don't want to go just over a hundred
35:45
dollars because 99 is so much more powerful and probably the increase in
35:51
conversions from having it at 99 without weigh the extra 10 ish that you get from
35:56
having it 109 so our spreadsheet takes all that into account
36:01
and automates it that's cool I think I think all three of us share that uh I I
36:07
don't want to speak for everybody but I think we all have had conversations where we're passionate about spreadsheets
36:14
for sure the term I've used for that or I've heard through from other folks too
36:19
is mental speed bumps um like when you're looking at pricing and if you see it as 69 like it probably doesn't really
36:28
um it doesn't impact you if all of a sudden that was 99 you're like yeah that's in the range it's still fine but
36:33
as soon as it was like a hundred and four dollars then you're like ah I don't think it's worth it anymore like uh and
36:39
if it was 129 it wouldn't bother you if it was 149
36:45
um but as soon as it's 157 then it all of a sudden it's like ah this doesn't make sense like it makes people start to
36:51
think once you hit or go over that mental speed bump um that's a really good one Katie a good
36:58
call out there um uh Igor has a question here too I'm not totally sure let's see he says how
37:04
to tackle let me see this might have contacts a bit harder I guess sometimes it gets anything complex support from the origin
37:11
um oh I think this is still related to White labeling yeah yep um in terms of like licensing and things
37:18
like that okay we talked about that earlier well they can't get support from the origin can they if they're white
37:24
labeling they've made a decision to be that point of contact exactly for the customer exactly yeah and that that's
37:31
part of why I was I lean towards it having to be a pretty high multiple because it really is like that they
37:37
start to take on the relationship with the customer or the client um and and we don't have that relationship anymore and
37:43
that's one of the things I find most valuable in our in our business is being able to have a relationship with our
37:49
customers so um cool uh Story Time Hans you're up
37:55
next um yeah so I wanted to talk about um just key metrics and you know what uh
38:02
what are some variables that have like kind of popped up over the years running
38:08
the business and the one that immediately came to mind was you know I mentioned earlier we give agencies a
38:14
free license well that agency is important to us we really want to encourage them to like you know start
38:19
offering our solution to their clients otherwise we don't make any money so the key variable for us is how many agencies
38:26
convert meaning they resold or referred at least one client to us and we have
38:33
that number I know it by heart um let's just say it's one out of five one out of five agencies convert and
38:39
they actually start generating revenue for us well we know how much the average
38:45
agency makes for us so we actually can draw that all the way back to even a marketing budget being like okay well I
38:51
can spend this much in ads to can get this many agencies to get a free license because I know
38:57
in our example one out of five of those will convert at an average amount of this so that that really connected the
39:04
dots for us and it allowed us to create quite impressive projections and and
39:10
what I mean by impressive projections I don't mean like we're going to go to the moon or anything like that what I mean
39:15
is stable like we we can predict uh where we're going to be at uh financially over time which is very
39:22
exciting for any business um and um and that's been very beneficial for us um knowing the
39:30
conversion of how many agencies convert from free to paying us is has been extremely beneficial and it has allowed
39:37
me to hire even um an employee who oversees Partnerships now with agencies because I can I can manage that employee
39:44
based on the historical this is what we convert at Value so if he's doing better
39:50
and we're converting even better um well that's great how can I reward that you know for doing better than I
39:56
was even able to do however if they do worse we see that there's maybe opportunities for them to improve uh
40:02
their work and and give them like critical feedback on how they can improve their work efforts so by having
40:09
that number knowing okay if we nurture them this way and do it this way we can project out this way
40:15
um it's just an extremely beneficial variable for us to work with when when running our business absolutely yeah
40:22
that's really good insight and metrics too um extending story time just a tad Igor
40:29
again has a good comment here anybody try anything with price anchoring
40:35
if uh folks aren't familiar price anchoring it's similar to what we were talking about a bit ago about mental
40:41
speed bumps um it's like 99 is this anchor in our minds and um uh often
40:47
you'll see it even uh honestly honest awesome motive has come under uh some
40:53
negative uh criticism about this a little bit in the sense that they'll often have an anchor price uh that's
40:59
slashed and then a discounted price and it's like it's actually not really discounted it's that that new that price
41:07
is actually their real price all the time um but having that like uh 199 or that
41:13
99 there is like setting this like this is kind of the value of the product and
41:18
but we're going to give it to you at a discount um any kind of experiments or experience
41:23
with that at all folks is that anchor pricing or is that just illegal
41:29
permanent discounts um that I described it in the context anchor pricing is just like the idea
41:34
that 99 is like an anchor that uh to weigh against um uh Igor again having a good camera or
41:42
having a three table pricing structure is another good example um and having one that's called out as
41:48
popular um um so that's that's one thing that folks uh talk about sometimes we in my big
41:55
pricing experiment where we went back uh I definitely was experimenting with that and I did we did have some pricing
42:00
before that in which we I think we one of our plans was like
42:05
um one we were experimenting with sevens there was a while where folks thought sevens were really significant in
42:12
pricing and so we had like 127 was a price um and I and I thought you know honestly
42:18
I think the idea of anchors pricing anchors is more significant than the magical seven and so 149 became the
42:25
number instead of 127 things like that and when it comes to the pricing tables
42:34
often folks are saying like the one in the middle uh is going to be the most
42:40
popular always because you actually don't want a lot of folks choosing the lowest end and you know that you're not
42:47
going to get a whole bunch on the highest end and so you this is like this is what I want my average job size to be
42:53
so it's like 99 it's like what you don't want but you want to encourage the 199 and then you have another one that's
43:00
like 4.99 and just having those kind of anchors there makes the people choose
43:06
the middle one a lot more often a lot more often than they normally would honestly yeah and you can further do
43:13
things like of drawing a box around the middle one and things like that another
43:19
thing I found worked is reversing them um I think I got that from Jason Coleman
43:24
or someone and then I did a Google optimize test on it where I reversed it and had the most expensive ones on the
43:31
left rather than the right as you might intuitively thing and that made a real measurable difference to both sales and
43:39
revenue on wow that page and I know quite a lot of plug-in company owners that have also reversed their pricing
43:45
tables in that way and they've all seen a similar result is
43:51
Jason Coleman's great with experimenting with pricing now he also is one I saw that um saw an increase in conversions
44:00
when he added the free product or the free option to his pricing table
44:05
um uh and he intuitively thought like if I'm showing people that they can get it for free why would they buy and it would
44:11
sound like it would convert less but he actually found they got more conversions when they added the free option there
44:17
that's awesome we have only one price point so we haven't ever been able to like test out the three table things
44:24
um uh but I will say that as a consumer visiting a website that has the tables
44:29
every time I see the free option right next to the price options to me it builds trust like I'm like okay they're
44:37
willing to flex like this like they are willing to hey here's the free version and this is why people are paying us and
44:43
uh to me I think that is a trust Builder thing where I think trust is lost is what I'm using looking at the three
44:50
table layout and the one in the middle says popular and I can't like truly grip
44:55
why is this the popular one like I don't buy it and so I go with the cheaper
45:00
options so like I would just say if you're doing the three table pricing and you're wanting to kind of bump people up to a higher plan really emphasize why is
45:08
this the most popular plan and if it's not the most popular maybe don't select it like because that's not powerful
45:14
um so that that's kind of my thoughts but when I hear anchor pricing strategy
45:20
you know I think about like how easily can someone message off our pricing to someone else to me that's very important
45:27
um like you know and and right now you happen to catch me interviewing right between when we've been 99 a year for
45:33
seven years and when we happen to be going to 119 a year I'm going to miss the 99 a year era like I really am like
45:41
um I it was so easy and simple and we're going to be testing these new Waters just given with all the changes that are
45:47
happening right now um but it's a new era for us I'm excited to see what it is
45:52
um you know you certainly can't be locked in Forever at a price point either as a business owner because yeah
45:57
reality is there's factors outside of your business that will impact you like inflation like the cost of living
46:04
increasing and things like that so just know that you know things do have to be somewhat fluid in the sense that like
46:10
you can't you can't be still 99 for a year 50 years from now like there's just
46:15
no way um so just keep that in mind and that things do change in life yeah absolutely nice well we have actually
46:23
hit our time but we're going to go a little bit more and try to wrap up quickly our best advice uh let's do an
46:28
elevator pitch version of this um what is your best advice for folks um who are new WordPress product owners who
46:36
need to consider how they can uh Target Their audience with pricing and Katie
46:41
you're up first okay my advice would be either choose one audience and go all in with them
46:48
like harms did and really Target to them or accept that you have multiple audiences and offer different options
46:55
that appeal to them while trying to make things look as simple as possible
47:00
excellent and um launch products for an industry
47:06
you've been a part of um I think you'll have that intangible fundamental understanding of how things
47:12
work and once you get an MVP out a minimal minimal viable product out then
47:17
just listen to what your customers have to say um because you'll be able to if you're coming from the industry you'll already
47:23
understand why they're sharing the feedback that they're sharing and you'll be like you'll probably sit there at least for the first couple years I said
47:28
they'll be like how did I not think of this um so you know my recommendation is if you're targeting an industry know that
47:35
industry you know hopefully you've serviced been in that industry for a long time and have learned the pros and
47:41
cons um of it nice I'm going to be slightly contrarian in
47:47
my best advice a lot of folks will tell you with pricing to experiment all the
47:52
time Katie is a great experimenter with pricing obviously with a giant mega spreadsheet
47:59
um if you're new I'm going to say don't experiment with pricing if you're having trouble with
48:04
um sales nine times out of ten it's not going to be pricing that's really stopping you from from selling it's
48:10
going to be features it's going to be marketing uh it's not going to be your pricing unless you're like way 100 off
48:16
base you're not going to know if it's going to be pricing until you have at least a year of data so yeah you need
48:23
numbers don't you to do experiments you've got to have enough data in order to really experiment so if you're new
48:29
don't experiment go out of the gate confidently strongly with something and get the data if you want to do any kind
48:36
of experiments at all with your pricing then start with discount strategies that will help you understand if the discount
48:42
is the thing that's really pushing people over the edge or not but for the
48:47
immediate just try to be confident in what you think is the best pricing for your product and run with it and just
48:53
plan on next year to do a big data dump and experiment at that stage or maybe
49:00
even two years out so nice well this was a great conversation
49:06
Hans thanks so much for being here again it was an absolute pleasure thank you both for having me
49:12
and next week is going to have to be a surprise right I think we again are surprising folks um we don't have
49:18
anybody lined up right um note that we will do uh we've got lots of ideas and people on our short
49:24
list um to base yeah we need to plan the next three months in total so we're gonna um
49:30
start that now we've just finished our last three months exactly and soon we're going to have
49:35
some new co-hosts too so I'm excited about it so everyone have a good week and we'll see you all next time thanks
49:41
so much bye everyone