Subsail’s pricing journey from usage-based to freemium, tiered pricing
When I launched Subsail as a beta last autumn (2016), I still didn’t really know how to price the product. This is a common problem with SaaS products. How do you price something that’s a) a brand new service, and b) code running on a server?
It is always a bit scary pricing a product like this, as you need a good balance of three things: revenue, so you make enough money, a reasonable price, so you don’t scare potential customers off purely based on a dollar amount, and worth, so that you price perfectly against how useful the product is and the problem it solves (how much time, effort and money can be saved by using it).
Pay-per-subscription ☝
My initial thought was usage-based pricing. This would mean customers would only pay for what they used. A price of €2/subscription seemed like a decent price (which represented the amount it would cost to manage and maintain a single subscription for its lifetime).
As an example, if you had a subscriber base of 500, this averages out at gaining 41 new subscriptions every month. Your monthly fee would be, on average, about €80. Selling subscriptions at €30 would mean you’re only spending 7% of revenue on managing all of your subscriptions in Subsail, saving time and money in the process.
The idea was that €2 for every subscription added to your account would be added to the respective calendar month’s invoice, and you would be automatically charged at the end of the month through PayPal, using their Billing Agreement system.
Around the time this billing system went live, I was reading and researching about different pricing models and, combined with some early feedback, a flat fee seemed more appropriate. Two major disadvantages to the usage-based model are unpredictable charges (you never really know what your bill will look like at the end of the month) and a complicated billing system, both for me to create and maintain, and for customers to use and understand.
Flat monthly fee 💵
Even though I was sold on changing to a (more simple) flat monthly fee, I found it much harder to come up with a number than than with usage-based fee. To be able to hit the mark across a range of publishers—some with 50 subscribers, some with 1,000—was incredibly hard. I settled on $59/month, with a full-featured 14-day trial.
I know this price knocked out a range of smaller publishers who make magazines in their spare time and don’t sell many subscriptions, and therefore would struggle justifying $59 to manage their subscriptions. The trade-off (which I was only semi content with) is that Subsail isn’t really necessary for tiny publishers; there is a point at which spreadsheets still work OK-ish, and it’s much easier to send campaigns to subscribers from a small self-maintained list.
(I have no scientific proof of this, but talking to publishers and seeing how they manage their subscriptions, it seems that at somewhere between 50 and 100 subscriptions, the numbers get too much to handle using hacked-together systems and spreadsheets. Subsail exists to help once you hit this point.)
Still, I was convinced that there enough smaller publishers that would be put off completely by a $59 plan, so I introduced a smaller plan at $29/month, specifically aimed at publishers with smaller subscriber bases of up to 200 subscriptions. Which meant I had changed my pricing model once again again, to…
Tiered pricing 🚀
I see this as the best of both worlds. It’s like a mix of both usage-based and flat fee pricing. By offering different monthly prices for different-sized accounts, I could offer different-sized publications the exact same product (it’s very important for me that everyone gets the same features regardless of their size) but at more reasonable prices. Tiered pricing went live mid-May 2017.
The tiers
Mini $29/month (up to 200 subscriptions)
Regular $59/month (up to 1,000 subscriptions)
Super $99/month (unlimited subscriptions)
(Every account has a 14-day full-featured trial to get to know the platform.)
Even with the Mini plan, the pricing is still geared towards most customers ending up on the Regular ($59) plan, but lets smaller publishers use Subsail without the perceived larger price tag. The Super plan is there purely for any big publishers that would blow the $59 price out of the water.
I’m really happy with these plans and I’m glad I’m at a solid place regarding pricing. 😊
Going freemium ✨
The final step in this pricing journey is the introduction of a completely free plan at the end of May. I’ve used a free tier for a few years on the Magpile Store—you can sell a single issue totally free—but I hadn’t considered it for Subsail, purely because I was trying to keep things as simple as possible.
The new free plan for Subsail is enabled by default and allows up to 50 subscriptions to be added before a prompt to sign up to the Mini plan.
In my eyes, this is much better than a timed, 14-day trial, as it removes the stress of a time limit and therefore makes the experience of trying out the product more relaxed.
The final four tiers
Free (up to 50 subscriptions)
Mini $29/month (up to 200 subscriptions)
Regular $59/month (up to 1,000 subscriptions)
Super $99/month (unlimited subscriptions)
Going freemium will hopefully let people feel more comfortable about signing up, trying the product as if they were a paying customer, and seeing for themselves just how helpful Subsail can be.
If you have any questions or queries regarding Subsail as a platform or the pricing, please get in touch. Email me or use the support chat on the site. 👋
Cheers!
-Dan
