Do Pricing Pages Really Matter? Complexity vs Clarity
For those not familiar, the Way Back Machine allows you to see what any page on the internet looked like on a specific date.
It's a great rabbit hole to go down and you can see what the first homepage looked like for all big tech companies.
Besides being fascinating (and making you feel better about your current homepage), you can learn a lot looking at this historical data and how product/companies develop.
A trend that I have noticed is that the most frequently updated page for almost every tech business is the pricing page.
This makes sense at first as a place to focus as this should be a major decision making point for customers and be the place that you convince them to buy.
Also the complex nature of software products and the teams that run them means that the pricing page is are pretty easy places to make updates without disrupting other work.
The page likely doesn't have a lot of technical debt and the functionality is pretty simple. Pages like that are the perfect place to run A/B tests and finely measure impact.
But just because this is an easy place to work, is it the right place to drive impact?
Buyer and End User Overlap
Pricing pages might matter, but the real question to answer is what % of our users are making purchase/upgrade decisions based mostly on the pricing page?
Are they casually glancing at the pricing page, then upgrading in the product to unlock a feature? Or using the pricing page to make the final decision?
To understand this, you need to figure out:
- How much overlap you have between the person who uses your products and the person who buys your products?
- Where purchases actually happen in the product?
This will vary based on several factors, such as:
- Target customer - B2B vs B2C?
- How your product is sold - Sales Teams vs Self Service vs a Mix?
- Style of monetization model - Freemium vs Direct Purchase vs Trial Model vs a combo of these?
The end user's needs are the thing driving the need for a purchase and/or upgrade, but it's the buyer that needs to initiate that and make a decision.
Lets take a look at Zooms pricing page as an example:
Zoom has hundreds of potential packages when you consider all the tiers, verticals and add on features. I have spent thousands of hours on Zoom, used it across multiple companies and I have no concept of which tier of service that I was in.
Someone in the company bought it, likely aided by a sales person, and I just got a license.
Contrast this with a company like Spotify, who's pricing page has a single pricing tier for premium and instead pushes you to buy multiple license via dual and family plans.I have used Spotify for years and I know exactly which tier I am in.
When Do You Need Clarity vs Complexity?
Looking at these two extremes, this raises the questions of which you should you be using and why?
B2B companies typically start with a few tiers but then expand their tiers of service to allow them to capture more value from each account. They can do this because the material deal sizes are aide by sales people, who help you make a decision.
B2C companies tend start with 1 or 2 tiers, ideally clear distinctions between them. As I mentioned in a previous post, the best consumer products have easily understandable positioning which helps with user decision (i.e conversion) making and spreading word of mouth.
- Spotify Premium = No Ads
- Amazon Prime = Free 2 day shipping
- Pandora Premium = Unlimited Skips
- NY Times = Unlimited Articles
Most of these products also have other features, but these are the main benefits that users get in these tier and become the "tentpole" feature that users will describe the products with.
To over simplify:
- The more likely that your product is going to be sold by a sales person, the more complexity you can introduce and benefit from.
- The more likely the user is the buyer of the product, the more understandable each tier has to be.
So What Should You Do With This Information?
1. Figure out how much of your traffic actually purchase through the pricing page.
When we did this at Codecademy, we looked at how many purchasers had visited the pricing page within a few minutes of completing the checkout page. The exact number escapes me, but it small. Like very small.
This means that all of the work that we did on the pricing page to improve conversion likely wasn't remembered by the users and also never showed up in a/b test. Most user purchased in the product to unlock content or a feature without ever seeing the pricing page again.
This doesn't mean that you should abandon your pricing page or that it should be clear, but it might mean that you should spend more time focusing on the points on higher leverage areas.
2. Figure out where the user decides to make the purchase
If users aren't actually buying through the pricing page, then you should figure out where they are in the product when they decide to buy.
Are they buying to unlock a feature? Expand their credits? Add team members?
You can likely look at inbound traffic to the URL of your checkout page and stack rank this based on volume. These are the places in the product that you'll need to work on adding clarity, increasing motivation and clearing confusion.
They are also were you are more like to get statistically significant results on your A/B tests because you are so close to the point of purchase.
3. Ensure your paywall & product tiers have clear positioning
Much more important than the look and feel of the page is what exactly the difference between the tiers of your product are. Does this actually make sense to your users and can they describe it?
Regardless of your stage of maturity and sales motion, clarity is always your friend. For word of mouth to travel, your users need to be able to both understand the product and easily describe it to other.
Ask your paid users why they upgraded? If they can't say or named a free feature, then you might have a problem.
This is especially important for consumer and small team focused SaaS products.
