- Which of your product features are actually worth money to your customers?
- Should you charge your customers according to the features they use? Or according to usage? Or according to users?
- At what points will it make sense for your customers to move to the next plan (if you do go for multiple plans)?
Most startups tend to have multiple plans with one varying factor (such as # of users). Knowing how to structure the plans is no simple task. The biggest mistake I see repeatedly is having a pricing structure that makes you upgrade for a feature you don't really see any value in. For instance, if you had a tool which sent newsletters, would your users rather go to the next pricing plan to send more advanced newsletters or to let their colleague log in with their own account?
Upgrading to the next plan needs to seem like it's a really great idea for your users. Determining which feature your users love the most will allow you to create a pricing structure that is fair and rewarding to your customers.
To understand the various pricing structures, I researched over 100 of the most popular startups to see how others tackle pricing. It quickly became clear that there are three types of pricing structures:
- Fixed Monthly Fee (one plan)
- Usage Based Pricing - pay according to how much you use the tool
- Plan Based Pricing - pay according to both how much you use the tool and according to what features you want to have