Welcome to the developers log! If this is your first time here then it might help for a quick introduction.
My name is Adrian. I develop a plugin called FormLift which is a user friendly form builder for WordPress. I often face a multitude of challenges throughout the day in regards to development, marketing, and generally running my business.
As my user base continues to grow an increasing number of road blocks are making themselves apparent. Competition, angry customers, chargebacks and the repercussions of decisions I make.
So if you feel like sticking around I am going to post every single decision and roadblock I face in this log and what I do to attempt a resolution.
I’m going to talk about FormLift’s ever changing price point. I have gone through many different business and pricing models, searching for the one I liked. It may have caused confusion for early adopters, but I’m going to walk through my entire thought process and how we ended up where we are today.
Today FormLift offers 15 premium extensions that can be plugged into a free platform. You can also purchase an All Access Pass to get access to all and any future extensions.
FormLift is actually in it’s 3rd year. I started this project in the late months of 2015 an account of a customer being rather unhappy with the design of their Infusionsoft forms.
Not wanting to have to custom design a solution for every client that expressed a dislike for the standard Infusionsoft design, I started work on a proprietary solution that would cut time, and therefore cost, down to minutes rather than hours.
When other Infusionsoft users got wind that we had an easy solution, I received some messages from partners asking to lend them the solution. Ever the Canadian with a willingness to please, I slapped a $99 CAD one time fee price point it and started emailing zip files.
However, while it would have been nice to just end it there my ambition told me that this was not the end of the road for this idea.
Over the course of the next 2 months, I delved further into WordPress plugin design, form security, html editing and so on than I thought I would ever need to, my dream had been to design boats for a living after all. But it was more interesting than my 2nd year calculus course anyway. ( I passed, don’t worry.)
Mike, a coworker, actually coined the name FormLift, and I officially launched a new solution into the marketplace.
This launch was a freemium model, which I still believe in to this day. With paid access you received a premium version of the plugin, with features such as,
- File Uploads
- Conditional Redirects
- Google ReCaptcha
- Among others…
At that moment in time I had no Idea what people were willing to pay for a form solution. So I went with what seemed safe. Cheaper than everyone else…
- $27/one time for one site.
- $97/one time for 5 sites.
- $157/one time for 10 sites.
At the time, my only real competitors were not even Infusionsoft specific companies like Gravity Forms and Thrive Leads. Both of whom lacked the customization and the functionality of what FormLift could do.
I would later learn from reading on how to update my pricing, (you don’t make it big with software on one time fees) that I had priced for Market Penetration.
“Market penetration pricing is a model which your product’s cost of entry is dramatically lower than any of the current competitors. You can forgo the initial emotion of “is your product trustworthy” because losing the cost of entry would not be detrimental to the purchaser.”
After a few months, I gained around 30-40 customers at various package levels. While this was exciting for me as I had essentially been validated by my peers it did not even come close to paying me for the time I actually spent developing it.
At under 10 people a month in user growth, I was unsatisfied. So I went even cheaper. Kind of…
I stuck with market penetration pricing, still staying cheaper than anyone else, but I introduced the element of monthly recurring.
Now our prices became…
- $7/month for 1 site
- $17/month for 5 sites
- $27/month for 10 sites
This effectively decreased the barrier to entry to the cost of a trip to Starbucks. Not to mention at this point in time I had the ICP discount running at 50% OFF. ICPs could buy in at the cost of a coffee and donut from Tim Horton’s.
While this again helped premium user growth (and made ICPs giddy at the thought) it didn’t make any money, not really.
What I also did not anticipate was what I’m sure every new adopter of recurring billing soon discovers, FAST… billing failures.
25% of new purchasers cards failed within the first month. At the time I was running this through Infusionsoft, and frankly their failed billing automation is lackluster at best.
This was when I started to entertain Ideas of moving billing outside Infusionsoft for better license management and control over billing operations.
To eek a little more revenue out while I started plans on a “new way of doing things” I bumped the price by $2 to…
This of course, as you can imagine, had little affect on actually being profitable.
At this point in time, I had around 100 paying customers. Not exactly a lot, but enough. (A third of all users at the time.)
As I formulated a plan to overhaul this whole system, something of an epiphany happened.
The premium version of which users were paying for was essentially all inclusive. All premium features were available at a small price point in a single install-able package. This however did me a fairly large disservice. It didn’t assign a value to each individual premium service.
I also realized that many users weren’t purchasing premium for the whole suite of items, but only one or two of them.
That means, I was selling six premium services, each ALONE worth $9 (in the eye of the purchaser), for only $9.
That’s like selling six cars for the price of one is a package fleet deal… not exactly a deal to walk away happy from.
I decided that more was to be gained by selling each extension individually rather than forcing one to purchase them altogether. This would help me two fold. It eliminated the purchaser’s perception of paying for what you do not need and allowed me to assign value to my tools individually.
I spent a month separating each premium function out of the premium install file and turning it into it’s own extension.
I gave each a value in between $39-$79/year and added it to our extensions store.
Now for the difficult part. As I learned from monitoring the open Infusionsoft user group and the heated discussions around Infusionsoft’s “forced upgrades” of early adopters, I was not keen on forcing my users onto our new pricing model.
However, I had a list of 100 people whom could provide a significant amount of more revenue to sponsor future growth.
I asked myself the question, how do I get customers to spend more money for the same product? Infusionsoft should have asked themselves this question because the answer is you don’t.
The way to get customers to spend more is actually quite a simple formula. Provide better content.
So, before launching this new strategy, I invested another month in creating new and exciting extensions and came up with a product schedule for more.
Social Proof, Order Forms, and One Click Up Sells we’re at the top of the development list. This made many users excited.
Now that I had all my extensions individually priced and more extensions Ideas on the way, I introduced the All-Access Pass. A single fee for ALL of our extensions. The All Access Pass pricing is a far cry from where it was before.
At the launch of new pricing, we had 13 extensions either developed or planned for development. To purchase each of them for a year would have costed about $639 for 1 site. So I divided that number by 2, then divided by 12, rounded up, and boom we had our pricing. At the end of all the math I decided on our final All access pass pricing to be…
- $29/month or $259/year for all extensions for 1 site
- $59/month or $559/year for all extensions for unlimited sites
Note, I dropped the 5 and 10 site packages because I noticed that on average the license was only used on 3-4 sites at most, even if the 10 site package was purchased.
This new pricing had significant savings vs buying extensions individually. And would also provide savings if current customers wanted our new extensions vs buying them all outright.
So here was the plan. I told all our current customers that we we’re migrating to a new billing and license management platform, which was true for the reasons I outlined earlier.
I gave them two options during this migration process.
- You may keep your current plan, whatever it may be, and retain access to the premium services you had when you signed up. (Our original premium services)
- Or, you may get on board with our new All-Access Pass and get access to our 7 new and planned extensions!
As it turned out, this worked quite well with 40% of users opting to move to the higher billing and All Access Pass privileges.
And now here we are. If you go to our extensions store now there are 15 premium extensions to choose from. Arguably the newer extensions, the ones I used to convince older users to get on with new pricing are FAR more valuable the the original extensions, especially the order forms extension.
This new model has also proved it’s salt over the last 2 months. All Access Purchases are not infrequent, but I was right about selling extensions individually. Many users would rather pick and choose what they want and not have to pay for everything. The selling of individual extensions dominates new premium user growth vs the All Access Pass.
This new model has without a doubt made FormLift a much more reasonable choice among the many options for form builders in the Infusionsoft space.
I should mention, that even though our price has increased significantly, we are till the cheapest/value option on the market for specifically Infusionsoft.
Doing the math, if a user were to purchase our cheapest extension, it’s only $49/year, which comes out to $4/month, which is CHEAPER than the original plans.
It’s when the extensions add up that we actually make our money.
What do you think? Would you have done it differently? How can you relate this to your own products and services? Let us know in the comments below.