How we raised prices 3x. Twice. And got happy customers.
Pricing is one of the biggest challenges in business, cause there’s no such thing as “correct” price. So in our QuickAdminPanel project we changed the prices twice. I want to tell the story and what lessons we learned from that.
Short intro about QuickAdminPanel. It’s a Web admin panel generator for Laravel framework. So our customers are Laravel developers who generate the code and save time.
Our initial pricing model was based on the downloaded projects you generate. You could play around with all functions for free, until you want to download the code — then it’s $9.99 per project.
But then we started changing things.
People need *limited* free trial
Before we dive deep into pricing and numbers, one important thought. We realized that people need to have limitations in a free versions. So, without changing any pricing, we added:
- Only 1 Free Admin panel
- Only 5 Menu items in that panel
- Only 14 days to try it out
That went really well — more people were converting to paid customers.
On the other hand, we’ve received a new wave of people trying to cheat the system — like deleting a panel and creating a new one. But it was pretty easy to handle. So no regrets.
Lesson learned here: people need to have limits on free trials. Usually they are time-based, but be creative with that.
Change 1. Pricing model.
Project took off as a proof of concept, but not massively. Basically, we were earning peanuts — 100 USD/month. I started questioning whether it’s a viable model. Or even idea itself.
While talking to our customers, we realized that current model is just not convenient for them. Basically, they would like to play around and create/delete more projects, only then they know the system better.
So we had to move away from pricing per project.
But then, we needed to raise the price to justify the unlimited projects. We decided to go for yearly pricing and came up with two premium plans:
- Professional plan: $9.99/year (3 admin panels)
- Unlimited plan: $29.99 / year (unlimited panels + premium modules)
In other words, for people who just came to create one panel with simple functionality, the price remained the same, but for others it went up 3x.
What were the results?
We started actually earning money.
Revenue went up from 100 to 500 USD/month.
Without creating any new features. Even taking away a few of them into more expensive plan.
And important part: almost no complaints about the raise. Only a few people who needed explaining what is the difference between plans.
Lesson learned here: your pricing model and trial-premium workflow should be convenient to customers. Only then they can make a well-thought decision to buy.
Change 2. New plans and 3x the price
Next step in QuickAdminPanel evolution was actually building more features — both after customers demands, and with our own ideas. And we thought that customers and revenue will grow organically from there.
But after 3 more months of just building, which costs money, we still remained at 500 USD/month revenue. With expenses around 1000–2000 USD/month — on developers, servers, my own time for content marketing.
So something needed to change, if we wanted to grow profitable. And it was not that much about features.
We decided to just raise prices. Again. Significantly. That was the only way to have a sustainable business.
The logic was simple: we were charging $29.99 per year for a tool which saves hours/days/weeks of coding, which equals to hundreds or thousands of dollars. Doesn’t make sense — even some of our customers told us so.
But we couldn’t just raise the prices — we needed to justify it. So I came up with a shift to another customer segment — development agencies.
So not targeting only developers anymore, instead focus on companies who have bigger budgets. But they also demand some features.
So we introduced Agency plan, with things like:
- Team accounts
- Whitelabeled panel (so no “quickadmin” code)
- Special URL to show panel to client
- Integration with some external tools etc.
And we priced it at $199.99/year. So 6.5x more than our previous price.
Not only that, for previous plan (renamed from Unlimited to Developer plan) we raised the price as well: from $29.99 to $99.99/year. Without changing any functionality. Just with logic that the value we’re giving is much bigger than the previous price.
Finally, we totally removed the plan for $9.99. Price was just too ridiculous in comparison.
I will confess: I was quite scared of the moment we launch new pricing and plans. If no one actually upgraded to a new plan, or bought for new prices, I was almost ready to shut it down and leave it as internal project without too much expenses.
Even before the launch, I started informing the customers about the plans, also offering them to stay with the old price for 2 years, or give 30% discounts for Agency plan.
I was expecting a shitstorm and complaints.
Here are the results:
We went from 500 to 1500 USD/month.
People voted with their wallets and did upgrade. Partly to have new features, partly just to support our project.
Also there were totally new buyers who were satisfied with new $99.99 / $199.99 prices.
Again, important and even more surprising this time: no complaints. No shitstorm. No negative reviews or angry customers. Wow, I was pleasantly shocked.
This time there were more lessons to take away, here are some of them.
Lesson 1. Spike of sales before deadline.
As I was announcing the upcoming price change on social media and in a newsletter, I saw the amount of purchases for the current price went up significantly. Look at that chart again.
See the week before the launch, it was really profitable. So a thing which I didn’t expect — a lot of “silent” potential customers converted just because it was still possible to get the cheaper price.
Lesson 2. Existing customers trust you more.
It was surprisingly easy to convince existing customers, who were playing around with QuickAdminPanel for a few months, to upgrade to Agency plan.
On the other hand, it’s really logical. Existing customers already have seen what you do. And if your product delivers, they trust you personally, and your mission.
Not only that, they want you to survive and grow. Maybe not in our case, but some customers actually depend on such tools to survive. For our internal team, if Trello was to shut down, it would be a really painful shift.
So your first customers are like investors, who pay not only for the product, but for the bright future for both sides.
Compare that to new customers, who just get on your page, see the tool and see the price, not knowing any more about how you operate. So now I still have additional challenge to bring new customers “from the street”.
Lesson 3. Unexpectedly less customer support
This is the thing we totally didn’t expect. By not accepting new customers for $9.99 / $29.99, we saw fewer support requests via live-chat or email.
Looking back, I see the logic: those “cheaper” clients actually did demand more customer support, including sometimes teaching them how to code.
I guess, that’s how the market works: people with less money usually want to be sure that their financial investment is really worth it, so they have a bunch of questions. On the other hand, big companies with budgets can afford to purchase tools without spending too much time on the details.
Lesson 4. Yearly price and no monthly plan
Perhaps you’ve noticed this thing — we’ve chosen to price yearly. To be honest, we just didn’t want to have trouble with monthly charging, billing, invoices, cancellations etc. And I stand by that decision, no regrets.
From psychological side, we wanted our customer to stick around for longer, so we intentionally forced them into a yearly model. There were a few customers asking for monthly, but mostly they were just asking for a bargain price (see above).
Lesson 5. PayPal request: customers don’t always do what they say
We always used Stripe as a payment merchant, so you would need to have a credit card to purchase QuickAdminPanel plan. And there were quite a few people asking about PayPal. I’m not a fan of it, and also it takes a lot in their fees, but with new pricing we decided to give it a try.
The result — none of the people who promised “if you accept PayPal, I would buy” have converted. Zero.
Yes, there were 5 total purchases via PayPal, so it’s not a total failure. But in a bigger picture, it is a proof of not trusting customers who say “I just need feature X”. Usually it’s not about one feature or even payment merchant — if they are really ready to buy and need your tool, they will find someone with credit card.
Lesson 6. I advice to make money, not raise money.
Just yesterday I’ve read a wonderful article by Gary Vaynerchuk called Make Money: Don’t Raise Money. Totally agree with the thought, and our story is the example.
It’s perfectly fine to bootstrap your business at first, then earn first revenue, and then re-invest it into future development.
By doing that, you not only remain in 100% control of the product, you actually learn to sell. And that’s the ultimate most important thing in business.
Final conclusion: charge more
I’ve been reading various stuff about business for years, and the most common advice is “charge more”. Yes, it is scary. And yes, it may fail, but in the worst case you can always go back to the old price.
And if you’re lucky, and if your product/service is good enough to justify the higher price, you will end up like us: with fewer customers, and with more of them being happy. Oh, and yes, more profitable.
Want to try out our admin panel generator? Visit QuickAdminPanel.com
Also, you can follow me on Twitter, where I share more thoughts about web-development business.
