Dynamic pricing expert and engineering leader. Ask me about pricing strategy, predictive analytics, market intelligence, big data analysis.
Built a dynamic pricing system that manages 2 million+ products and $50M+ in yearly sales.
Having different subscription plans makes sense in two scenarios. First, if each module is itself a service that a customer might subscribe to on it's own then it makes sense. Second, if you are charging based on metered usage like AWS.
In the first scenario where each module is it's own service you could construct subscription plans for each and provide discounts to incentivize customers to use more than one module. If these are just add-ons to a core service then I don't think this is a good idea. It just makes the decision more complicated for your customer.
What are you using to estimate the 10K sales number?
Do you have a history of sales with this audience you can use to estimate conversion rate?
You can't really estimate beforehand how the conversion rate will change from $0.99 to $5. You might make 9,999 sales at $5 or you might make 100 sales. How customers respond to price depends on the product and how they are paying for it (in-app vs. entering a credit card on a site), as well as the nature of the customer.
Is your product one amongst many competitors, like an app in an app store? Or is it more unique like an eBook relevant to your niche audience? Customers in the app store will be much more sensitive to price than your engaged users, especially if what you're selling is unique.
Finally, beware of underpricing. You can always put something on sale but it's very hard to raise your price.
I don't know of one you can just download, but it should be fairly easy to make one. The questions you need to ask are:
* What is your value per customer (license + on-going maintenance and support)?
* How much does it cost you to service each customer? (Variable operational expense)
* How much does it cost you to run your company regardless of the number of customers you have: software development, accounting, sales, etc.? (Fixed operational expense)
* How much of your market can you capture?
Then it's just comparing revenue to cost. One other thing to consider would be, how do the customers in your market segment? Are they all the same size, or are they a few big players?
Really good call - Britt asked smart questions to get a picture of the situation quickly, then we arrived as actionable next steps. Time well spent!
I had an excellent call with Britt. He was able to clearly understand all of the issues and provide great suggestions! Great value!
Very helpful! Gave me great advice and many ideas that I will really help my startup project. Thank you!
Britt's advice was extremely valuable. I highly recommend him.
Britt is highly knowledgeable on pricing best practices and accepted models. We even went into a bit on customer conversion/retention, which was an added bonus. Britt is no-nonsense and easy to work with. I highly recommend him to you.