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Lower price/user + Price/newsroom
1 min read

Lower price/user + Price/newsroom

In the previous post I showed how introducing an extra axis to calculate the price/month would increase the baseline revenue by 42%. Duh 😜... This is assuming that all customers will accept this new pricing scheme which is an illusion 🎩.

But here is what I wrote in the guiding principles for the pricing exercise:

No intention to increase prices for our customers

So let's explore what it would mean to reduce the price/user to account for the extra revenue we're getting by charging on # of newsrooms.

Lower Price/User

To stay around 1 million in revenue for the provided sample data we could lower the price/user by about 40%.

New pricing model with 40% decrease

The Numbers

Applying this logic to the example dataset would keep the Annual Recurring Revenue in the same range (6% increase) where our agency customers would be more affected as they have more newsrooms.

ARR before - ARR after

The revenue stream will now be diversified from previously a pure user only model to a more usage based model keeping in account both newsrooms and user counts.

Conclusion

This feels more like a price change than the price increase from the previous model. It's easier to explain and sell as a change of pricing strategy that is more inline with our long term goals.

Scoring this model on a scale from 0-5.

Does this lower barrier of entry for people exploring Prezly? ⭐️️️️⭐️️️️⭐️️️️⭐️️️️
Does this encourage our customers to add more users? ⭐️️️️⭐️️️️⭐️️️️