“Still haven’t seen my bill, I’m actually eager to pay it.”

That’s an actual quote of a client in an email received a couple of minutes ago. It is his first month with Interdubs, and he is not used to the fact that the bill will only arrive once the month is over. And then he can pay it. Or not. If he should feel like that. Which sounds ‘good hearted’ or ‘weak’. But it makes actually allot of (business) sense: Most of my clients have made more money with the site in their first week of using it, then it will cost them for whole month. A not so significant part of them actually takes just a few hours to make the 285 that the services costs them. Either by direct billing or by improved client relationships. I was aware of this when I designed the system and set the price. The price is solely based on the system working as well as it seems to be. It is arranged around my costs and the future potential of more clients. And maybe on the fact that I like to code fast.

I really hate the business model that tries to leach on to the success of its clients. Network Neutrality is one of those. Phone companies would sure love to charge more for important business conversations than for idle chit chat.

But back to Interdubs: having a super reasonable price that are people actually eager to pay makes everything much easier on everybody. So far people paid their bills. The majority of companies in record time. Thanks again and also from here. If I would try to squeeze more money out of the service, then I might need an accounting department that starts bugging people. I’d rather not.

On the other side with the latest feature additions the price / performance ratio is in danger to tip from “great” to “ridicolously great”. I have feedback from many of my clients saying that the service is too cheap. And I suspect that I could actually sign up more people if the price were higher. Most people think just because the competition is ten times more expensive it also would be better.

4 Responses to ““Still haven’t seen my bill, I’m actually eager to pay it.””

  1. dave waller Says:

    Yeah Andreas - I think you could scare people if its priced too low, because the old adage “you get what you pay for” is embedded in all of us. However, as my great-grandfather wisely said “you can’t go broke making a profit” so price it to what works for you and don’t worry about inferior products costing more. The marketplace will identify the best products and prices all on its own. Personally, I think Interdubs gives Brickyard an unfair advantage over those without it - d

  2. Bill Sewell Says:

    Greetings Andreas - you may be on to something here. The biggest challenge with your pricing model (flat fee, all you can eat or even more discounted for friends ;) is that it does obscure the value that you keep adding to the service. What happens if someone uploads 1 TB/mo of data? Why should they pay the same as someone who loads in only 100 MB/mo? How do you define fair?

    In the tech business, price commoditization is the main fact of life. Once you are known for being the low price leader, it is very difficult to convince people to accept price increases - especially as you have defined no price triggers to help you offset resource costs. In fact, usually the only direction for pricing to go is down to keep up with the next generation of systems.

    I agree with Dave as well, that the marketplace will identify the best products and will spread the word accordingly. What’s interesting is that the definition of the “best product” will grow much more diverse as people begin to understand their online business needs. Which is a better car - an Acura MDX Toyota Prius? It depends on the desires and needs of the buyer… but at least we live in a world where you can choose the most appropriate solution for your needs.

  3. Andreas Wacker Says:

    Interdubs prices are never discounted. Everybody pays 285 a month. Not sure what you mean by the ‘friends’ comment.

    People know what they use Interdubs for. And so do it. It is simple that I know what I pay for the average data and it works out. So it is fair, in that everybody pays the same for the service.

    I agree on the fact that there is not a single dimension to “best product”. That’s why choice is important: Every company has an entirely different mix of needs. Good that they can choose now from differently structured solutions.

    What are the wiredrive prices these days?

  4. Bill Sewell Says:

    Greetings Andreas,

    Thanks for the clarification. I must have had a misunderstanding with the people that I spoke with - you never know how reliable information is these days.

    Many of our Wiredrive clients have monthly hosting prices that are equivalent to yours. Some pay more.

    Regards,

    Bill

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