Hey all, I keep going back and forth regarding the pricing for my application (which I have finally launched!). It is a sms based application which allows clients to text their providers, and the providers to send picture messages to the clients. Pricing is currently setup to allow a certain amount of messages each month based on the plan they select. My question is how should these plans be priced. Currently I have it priced where the total monthly fee could potentially go to just the messages, leaving little room to cover other cost (server, etc…). Highest cost to me is for a picture message, which is $0.02/message, and I accounted the monthly price based on that since they could potentially send only picture messages. Is there a certain markup I should aim for? Wanted to post here to get some advice from others that may have already been down this path. Thanks!
Plus, what are competitors charging?
Is there a certain markup I should aim for?
As much as they are willing to pay!
My own feelings as a bootstrapper are that you want to make sure you bring enough in that you aren’t going to be burning money. However, you could reduce the price below what it costs you to run your business (and keep yourself fed, etc), accepting that it will initially cost you money - the only way to survive like that is serious growth though.
You could also take a look at how many of your customers are actually using their full allocation - if the average is 50% usage, then perhaps charging at, or near cost, is a good way to go.