Building a Web App? Don’t Forget the Premium Plan! 04 May 2006
67 comments Latest by frank
We recently had an experience that was so surprising, I just had to share it with those of you who are building web apps - I believe you’ll find it very valuable.
The Expensive Plan
If you’re one of the many companies or individuals who are currently working on a web app, I’d strongly encourage you to consider including an expensive premium plan. Something that is head-and-shoulders above the other plans you offer. Typical extras that could be included in a premium plan are:
- Increased security (SSL)
- Brandable interface
- Higher capacity or usage
- Extra support
Read on and I’ll explain why.
Why is it Important?
We launched DropSend (a service for sending large files you can’t email) last November and it’s been ticking along nicely, picking up about 3,500 users per month.
We always planned on offering a premium version for businesses that was brandable and multi-user, but we couldn’t get it done in time for launch, so we decided to launch that feature later.
Well, two weeks ago, we finally finished the new DropSend Business Plan. It’s $80 more than the Pro plan ($19 vs. $99), and we were worried that it might be a bit too expensive. Holy crap, were we wrong.
30% Increase in Revenue
In two weeks, we’ve increased our total revenue by 30%! Two weeks. As I write this, I’m still finding it hard to believe. The Business Plan is now responsible for the lion’s share of our revenue from DropSend.
So What’s the Lesson?
What we learned from this is that people will pay for quality. Offer them something really good, and they will go for it. Our premium plan is aimed at businesses who have the need for a high-end solution, and of course, they are the ones who can afford it.
So that’s pretty much it - a short and sweet lesson that I thought I should share. As always, feel free to agree or disagree below.