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by pedalpete 1953 days ago
It's great that your customers have said it's too cheap. That tells you two things.

1) they value what you are selling

2) they don't want you to go out of business.

What have the businesses said about how you charge them? I assume you've had this conversation with them? How do they expect to pay?

My gut instinct, (not knowing your business) is the price per staff is a good way to go as it's simple for the business to understand. You should also be able to figure out how many SMS messages that business would send per month, as there are only so many appointments each staff member could take. Of course, this is an average, so if you used an average number of SMS messages, and include that into the staff fee, you make it easier for the business to understand what they'll be paying per month.

You can take that SMS fee and and try to 5x or 10x it in your pricing model and see what the response is. This also helps to make sure your costs are significantly covered should there be an increase in SMS usage or pricing.

Keeping the pricing model simple for your customers has the dual effect that it's simpler for you to build, simpler for them to understand, and simpler for you to explain to them.

Simple, simple, simple. I made the pricing on our website WAY to complicated when I thought it was simple. We charged by the number of views with decreasing amounts as people used up views. It was a nightmare. Seemed simple to me, lots of customers didn't understand it, then thought it was too expensive, while others thought it was too cheap. TBH, they were both right, depending on what type of customer you were. I optimized for the little guy, when they didn't want to pay at all, and didn't charge the big guys enough.

Hope this helps, best of luck, and congrats!

2 comments

Hello and thank you for your time.

Yes, I'm trying to catch both small and mid customers, maybe that's a rookie mistake.

Another problem would be that a customer said he doesn't want SMS messages, he wants just the app.

So pricing based on SMS, would still result in unequal pricing for those who don't want SMS notifications.

Should I tell them: price per reservation is 5 units with SMS notifications included? (the problem with this would be that in the future I plan to add more SMS notifications and I cannot raise the price every time).

One thing I can tell you. Early on, focus on 1 segment if possible. Small customers are very different than Mid-size customers. Different pain points, different needs and possibly different budgets. I would try and focus on finding that product market fit which is to figure out which segment is the best customer segment for your product in the early days. Start with them. Forget the others. Once you get enough traction, you can add other segments later.
This is one hell of a truth.

I think the customers I met are mid size. The number of current reservations they get over the phone and site contact form are between 100 and 300 per month (20-21 working days).

A way to convert these customers from phone to the web app is to include a link to the app and let them check the details (I'll think of something...).

Finally, I'm taking your advice: price per SMS notification and let's see how it goes :D