Pricing yourself out of your market

Image representing YouSendIt as depicted in Cr...

Image via CrunchBase

I wish I could understand the way online companies come up with their pricing strategies. I mean, that’s true in general, but in particular today I’ve got on my mind companies that offer a service to everyone online for free and then also have a paid version. I think about this all the time since I’m an online-business-thinking guy, but it was YouSendIt that sent me pondering today, so I’ll use them as the example here.

I love YouSendIt. It is simply the best way to send large files to anybody who does not have their own FTP. YouSendIt is the only service of its kind that I know of where the free version will let you send files to someone without also sending them a bunch of “ambush ads” — ads that are designed to look like the button your supposed to click to begin your download. They’re fast, easy and even have downloadable software so you can send a file without opening email or a browser window.

Did I mention I love YouSendIt? I use it often, and while I could do the same thing other ways, it’s so much easier than the other options and it’s FREE! I love YouSendIt so much that I would pay for it even though 99% of what I will ever do with it can easily be done in the free version. I would pay for it, but because of the previous sentence, I can’t justify their subscription rate of $50 per month.

Let me state that again: my options are to suck the free teat for as long as they offer it, or pay $50 per month.

How about a membership level where I can donate whatever I want through PayPal to thank you for your great service? How about a $5 or $10 per month level that offers me your free service plus a once-per-month sharing of an enormous file or allows me 10 downloads of what I share instead of 5? Why are my choices free and crazy expensive?

I think there is a huge revenue-generating opportunity being missed here and it’s not just YouSendIt, it’s Dropbox, it’s Livestrong, it’s about 90% of listener-supported podcasts, it’s the American Cancer Society (I’m still chapped about that $10 minimum donation), it’s the whole music industry, it’s so many online services that people want to support but who price themselves right out of it.

I know you send out Madison Avenue marketers and research firms to poll people and figure out what the market would bear. I’m sure they do a great job for the insane rates of money they charge you. But let me offer this thought: while they’re polling to find out what people who need your service will pay for it, are they even considering what your non-essential users would consider putting in your hat? I know they’re not your target audience. I know the idea of supporting them is for beta testing and name-recognition so that when their companies need a solution you’re the one they recommend. But I think you’re missing a great opportunity to make a little money and build a community. Don’t want the money? Set it aside and use it to throw a party in as many locations as possible to thank people for their support. Collect it and donate it to a charity. Maybe consider giving it to me — I’m just saying…

The thing is, people want to support you and thank you for your good work. Letting them do so makes them feel included and helps build a community around your product. It’s great PR, it’s great brand-building, it’s a great way to pull recommendations for your advertising, it’s a super way to find beta testers, and it costs you virtually nothing.

Think about it. Think about offering a “Supporter” or “True Believer” level subscription to your service. The ROI may be priceless.


2 comments so far

  1. Mike (@misanthropemike) on rocks, and it’s affordable…

    • matweller on

      Isn’t Sendspace one of the ones with all the tricky ad banners that look like buttons to download the file, though? I’ve seen those joints enough times now that I know how to navigate around that garbage, but I’m not going to send a file to a client or vendor and expect them to want to to the same.

      Sendspace may not be one of those, there are so many it’s hard to keep track. Their paid plans aren’t bad, but it still gets me as odd that the choices are 1) A ton of great service for free or 2) A little more service for $80+ per year. It seems liek there should either be a lower starting threshold or more features for that price — it’s the value question.

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