We launched Resource Guru around 3.5 years ago with pricing that hasn’t changed since. Until now, that is.
When we first designed Resource Guru, we were heavily inspired by Basecamp, one of the great pioneers of the SaaS (software as a service) industry. Much like their current model, their pricing was based on “bands,” which seemed like such a sensible way to do things that we followed suit when creating our own:
The problem with this type of pricing is that it can actually end up being unfair for some customers. For example, if you go from having 10 people in your Resource Guru account to 11, you’re forced to go from paying $1.90 per person on the Mini plan ($19/10 people) to paying $4.45 per person ($49/11 people) on the Basic plan!
First off, that’s pretty unfair (normally, the more of something you purchase, the lower the unit price) and, second, it acts as a disincentive for customers to upgrade to the next band. We actually noticed this when we analyzed the data and saw that there was significant “bunching” near the band limits of 10, 30, and 80 people. Customers were understandably reluctant to add more people and jump to a higher per-person charge.
Interesting psychology at work
There’s often a strange misunderstanding in play when people look at pricing bands like this and try to compare them to “per user” plans. Take a look at Bidsketch’s pricing below:
Let me ask you a question—how much would you pay per user on the Agency plan? That would be $18.63 per user, right ($149/8 users)?
Wrong! It actually depends on how many total users you’re going to have in your account. If you had 4 users, you’d actually pay $37.25 per user ($149 for 4 users)—substantially more than the smallest plan.
When most people compare this type of pricing to a per-user model, they tend to divide the plan price by the maximum number of users allowed in that plan. That’s where they go wrong and end up with a false comparison.
For our new pricing, we took a leaf out of another great SaaS company’s book—Slack. They charge a flat rate for each person in an account, regardless of how many you have—a much fairer model. So, this is what our new plans look like:
Sudden jumps in price per person are gone! :) Instead, you benefit from a consistent price per person and simply choose which features you need.
One other change we made was to offer annual plans in addition to the monthly ones. The great thing about those plans? Annual subscribers automatically get 2 months FREE!
Thanking existing customers
Let’s be honest—nobody likes price hikes. Yes, these new plans amount to our first increase in years—but not for our existing customers! As a thank you, all existing customers have been “grandfathered,” meaning they can rest assured that they’ve been locked into their original pricing.
A product that pays for itself
We’ve always known that Resource Guru saves companies time, but we’ve never really known how much could be saved. So, along with the new pricing, we launched our brand new Savings Calculator to help people find out.
While playing around with it, I have to say that I was genuinely surprised by the results. Take a look at the example above. When 25 people each save 15 minutes a day at a company charging $112 an hour, it’s a saving of $14,000 per month! Even if they saved a lot less time than that, you can still see how Resource Guru could easily pay for itself—a Resource Guru account on the annual Blackbelt plan would cost them only $104 per month (25 x $4.16).
Suppose you think saving 15 minutes a day for every person is unrealistic. Well, how about 5 minutes? In that case, we’re still talking $4,667 in monthly savings. Any way you look at it, that’s a dramatically good return on your $104 plan.
Even if you take it all the way down to 1 minute, the saving is $933 per month. Why not try the Savings Calculator yourself and see how much you might save? It’s a no-brainer! :)
Better, faster, stronger
Apart from making things fairer, the new pricing is going to pave the way for us to hire more engineers, make speedier enhancements, and grow faster. Onwards! :)