Progress
A pricing decision I made while building Merllou
Merllou originally had one paid plan at $59/month. When I revisited it, I realized we were asking founders to make a fairly big jump from Free Forever, even if they only needed a little more capacity. So we lowered the starting price to $19/month and added free business consultation to every plan, including Free Forever. Before someone upgrades, we’ll review what they need with them. If the free plan still covers it, we’ll tell them. The OECD (2021) identifies funding and skills gaps as barriers to digital adoption for small businesses. A randomized study in Mexico also found that access to a year of management consulting improved productivity and return on assets for participating small and medium-sized businesses (Bruhn, Karlan and Schoar, 2018). Those findings helped me think about pricing and guidance together. For other founders building a product with a free tier, how did you decide what should trigger the first upgrade? I’m curious which limits your users were willing to pay to remove. You can see how we structured the plans at https://merllou.com/pricing. References OECD (2021) The Digital Transformation of SMEs. Paris, OECD Publishing. https://doi.org/10.1787/bdb9256a-en Bruhn, M., Karlan, D. and Schoar, A. (2018) ‘The impact of consulting services on small and medium enterprises: Evidence from a randomized trial in Mexico’, Journal of Political Economy, 126(2), pp. 635–687. https://doi.org/10.1086/696154
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Paul Yorke
Lowering the entry plan from $59 to $19 a month is a sensible way to ease the jump from the free tier, and offering a review of what someone needs before they upgrade is a nice touch. Once people move to a paid plan, which limit or feature has turned out to be the most common reason they upgrade?