The popular Web App company actively tests their pricing page layout.
I was asked over the weekend if I saw the noise about 37Signals raising their prices. I had not so it was very nice to hear from colleagues looking for my opinion on the matter. So, here’s my opinion on the 37Signals price-raising uber-scandal; there’s nothing to see here, move along.
WAIT! Don’t move along yet… there actually is something to see here, and its pretty cool. But it isn’t a trainwreck or fiasco… its a lesson in marketing.
So, last week 37Signals was caught experimenting with their pricing page layout for Basecamp. Apparently some people wanted to make a big deal out of this, with some folks even going as far as saying “37Signals doubled their Price without any warning!” – but they didn’t. You see, apparently 37Signals considers their pricing page a marketing page and we could all learn a lesson from them. Just a lesson – don’t copy them!
It appears that 37Signals – as any good SaaS or Web App company should be doing – is experimenting with different layouts, messaging, etc. on their pricing page in an effort to drive up sales. Oh, right, that last part of course is the sticking point for many – how dare they attempt to make more money? But, in the real world, this is what we actually want to do. So it is great to see 37Signals – who many look up to – being caught treating their pricing page as a marketing page!
According to comments made by 37Signals’ Jason Fried, they’ve learned that “too many plans confuses people, and suggestion is powerful.” Indeed, these are key points. In fact, these are covered – as well as what you should and shouldn’t test on your pricing pages – in the Pricing Page Success Formula video series.
Fried went on to say “We’re experimenting with different combinations and words and layouts to see what we can learn. It’s basic business stuff.” <== HA! Basic business stuff, to be sure… kind of a reminder to the author of the post he was commenting on. Well played, sir.
The biggest issue people had (if they really had one) was that in one experiment the entry-level (low-end) pricing tier was removed from the pricing page. This made the entry-level tier now TWICE as much as the entry-level tier before. But as Mr. Fried retorts “If we removed the Max plan, would people be saying we dropped our prices 50%? That would be equally silly.” Nice.
So what is the lesson here? Simple… the Pricing Page is a MARKETING page – I think one of the most important marketing pages on your website. When you live or die by online sales of your service – automated, self-service, etc. – then your Pricing Page is the MOST important marketing page on your site. If you are not always testing, tweaking, optimizing, and refining your Pricing Page then you are leaving money on the table.
Frankly, most companies don’t realize that the Pricing Page is a marketing page and instead treat it as a one-time price list or feature comparison grid. The CEO of one of the companies that wanted their pricing page reviewed live during our last SaaS Pricing Page Design workshop sent me this amazing confession, which I’ll keep anonymous to protect the guilty:
“Now looking back at our history, I think we spent too little time on our pricing page (as you can tell) and our pricing structure (we copied our competitors).”
WOW! The first step to recovery is admitting you have a problem. Hopefully this makes things a bit clearer; when I tell people not to copy other companies’ pricing pages it is not something I’m making up just to get attention… people actually copy the pricing and pricing pages of other companies!
As an industry, rather than trying to find fiascos, train wrecks and controversy every time (there are plenty of examples of real ones and we should call them out on it) we should celebrate companies like 37Signals – who get it – and encourage them and others to do what has to be done to increase sales and generate profit.
For once, I’d say maybe you should copy 37Signals. Just copy the way they think, not their actual pricing page or pricing, okay?