The price is (almost) right…

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.

The first iteration of FormLift was simply called “InfusionForms 2.0.” I thought it was a rather good name at the time. It was a couple of Javascript and CSS files that would parse the html and style it.

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…

  • $9/month
  • $19/month
  • $29/month

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.

No one likes paying for stuff they don’t need…

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 kick it off with a topic that ruffled a few feathers as a result of me enforcing my terms and conditions.

As a free software provider it’s difficult at best to encourage users to pay money for additional services, especially when the free software you provide is actually pretty good all on it’s own.

To encourage people to sign up for a paid service I did what most free software companies do, take credit for the work you did.

On all the forms that were created with FormLift and the user was not paying for service a “powered by FormLift” credit would appear under the main button text of any form along with a backlink to our site. I also added a clause to our terms of service that reads “all unpaid users must show the credit, deactivation of the credit will result in your site being banned…” etc.

It seemed fairly reasonable to me.

What I did not anticipate was the tenaciousness of some people who didn’t want to pay the piper, which I would soon discover.

At around the same time as releasing the update that would add the credit, I also developed a fairly simple usage tracking system to monitor sites abusing API privileges.

After a few weeks of collecting data, I noticed that several of the highest usage sites were actually unpaid customers.

I traveled to their sites and noticed that they had “hacked” with CSS the credit away.

Maybe this was my fault as I had made it fairly easy to do… but I was hurt nonetheless that I pour literally countless hours into development to help these companies and as a single person (I have no employees) and their not even willing to either pay the relatively cheap price to remove the credit legitimately.

(I would later discover that this was more ignorance than the willingness to pay)

At this point in time, there were around 700 websites logged with having FormLift active. As a single person it is not possible for me to go to every single one and check if they are breaking the terms of service or not.

So, I pulled up the 380 emails that I had on file and blasted an email. This was perhaps not a great Idea. But I was pretty peeved at the time.

Read the full email below.

It’s come to our attention that some FormLift users aren’t playing by the rules.

If you have a paid license and are currently paying for extensions, then this does not apply to you.

If you are currently using the free version with no paid extensions, then you should pay attention to this email.

You know the FormLift branding that says “Powered by FormLift” which appears on all forms for free users?

While it may be annoying, it is a trade off. If you don’t what to pay money, then you make up for it by giving us a backlink (credit) which in turn allows us to grow. Pretty fair. If you’re okay with that then that’s awesome and we appreciate you for understanding the rules.

However, some unpaid users have taken it upon themselves to illegitimately disable the credit without paying for any service.

What does this mean exactly?

Well, first off, it’s a violation of intellectual property rights. By using the software and by displaying it on a website without the credit, it’s saying, “This software belongs to me.” Which it doesn’t. We’ll let you say that though if you become a paid user.

Second, it’s a violation of our Terms and Conditions, which you agree to by using our software. Under section 4. Ownership, it reads the following.

“If you are using FormLift as an unpaid user, you are required to allow the “Powered by FormLift” credit to remain. It is reasonable to give credit to the creators of the content if you did not pay for or create that content. Removal or tampering of the credit before becoming a paid customer is a violation of intellectual property rights and is subject to litigation. You may remove the “Powered By FormLift” credit upon paying for any licensed FormLift extension or “All Access Pass”. Failure to do will prompt the blacklisting of your site from API usage.”

We will be enforcing this clause by blacklisting websites from API usage as described should we discover tampering of the credit on sites using the unpaid version of FormLift.

Several sites have already received warnings.
If this doesn’t apply to you, than that’s awesome and we’re super grateful that you’re using FormLift in compliance!

If this does apply to you, we’re still happy to have you on board, but you will need to either purchase a paid extension and disable the credit legitimately, or re-enable the credit to be in compliance moving forward.

Thank you for understanding.

Have an Epic 4th of July weekend!

It may have not been the best idea to send this to my ENTIRE list as I got some pretty terse emails from previously happy clients in return.

On the other hand, I received some emails from people who were NOT in compliance and appreciated the fact that we we’re “calling them out” as it were and promptly paid for a license.

I also received several emails of users being quite confused about why I was being mean. While not my intention, it can definitely read that way, which I see now.

If I were to travel back in time I would re-write that email as the friendliest customer service agent in the world, but customer service has never been my strong suit. Also, I wouldn’t have sent it to people whom obviously had a license.

While it would be nice to let everyone use FormLift for free sans taking credit, that’s just something that’s out of the question for now.

Now thinking from a business perspective I’m at a bit of an impasse since this has brought to light a little bit of an issue for me.

FormLift as a software can tick most people’s boxes as a form builder without any of our paid extensions, that’s fine. The issue is the only incentive to purchase is to get rid of the credit, and users have demonstrated they would rather hack it away then pay for stuff they don’t need.

That leaves a few options of how to convert free users to paid users.

Option 1 is to stop providing free services. This would probably kill FormLift, so I’m not going there.

Option 2 is to introduce more limitation into the plugin to make it NOT tick all the boxes. This would make current free users unhappy, but would have little impact on the emotions of newer users. We could limit the number of forms one could create, or limit the API access to a threshold per month, and paying for extensions would remove the threshold.

Option 3 is to lower the price barrier. This wouldn’t make sense financially as we are already the cheapest/value out of the gate vs. all other solutions.

Out of the three options, option 2 makes the most sense, even if it makes current free users unhappy. There might be some abandonment, but I also realize that some business are actually dependent on FormLift and will pay what they need to keep their site working.

It’s a unique situation I’ve put myself in, the base plugin is so good extensions are only needed in the edge cases. However, it doesn’t make for quick growth which is what’s wanted right now.

As a Canadian, the want is to make everyone happy, but often times that’s just not possible.

What do you think? Have a suggestion that makes everyone happy? Leave a comment below.