There is no reason for this redirect, plus I clicked through thinking that this article was from the good people of Heroku.
Choosing $5 as your price point because everyone else does it, or because you think it would be an easy sale, or because you feel bad about asking more, is stupid.
Don't do that[1].
Give pricing a tenth of the care and attention you give to your code. Because it is the single most important lever of profitability you will ever control, and it is much easier to pull it before you launch than afterwards.
[1] http://chester.id.au/2012/09/12/review-the-strategy-and-tact...
Meanwhile I've increased the prices, the cheapest plan is now 29$/month. Guess what? Conversion rate didn't change, thus I gained new users at the new price point (I of course grandfathered old users), and of course the revenue increased almost by a factor of six. What's also interesting is that I get way less support requests from the people who pay more, thus the six-fold increase of the monthly price resulted in more than six times profit (profit = 6 * old_revenue - 3 * old_support_request_rate)
An app store lends well to $1-$10 apps creating a demand creating a supply.
Web based Saas lends well to $5-$50 apps creating a demand creating a supply.
If you need a sales consultant or a long decision making process you need to go into the 5-6 figures realm.
These things didn't happen because consumers really wanted smartphone apps that happened to cost around $1 or webapps that happened to cost $5 per month. The marble dictated the sculpture
Consumer webapps need to be sold as monthly subscriptions. Subscriptions have a customer decision making and vendor responsibility overhead that makes $5 roughly the lowest possible price, so you naturally get the "cheaper" apps bunching around the lowest viable point.
B2B web apps/services were able to crack into a price range that was inaccessible before. $1500 one off payment for a shrink wrap version is too expensive for self service sales & too small for a sales teams. $99 p/m with 30 days free isn't. Whole programming cultures formed around this new opening.
I did A/B testing before I started charging, and there was no difference between charging $12/year, $3/month, $4/month, and $5/month. Which is crazy, but it reached statistical significance according to optimizely. And fewer customers for the same money sounded good to me.
* I have a $7 educational discount and I buy $12 plan on GitHub, normally they don’t offer a $5 plan.
I mean I love how they treat the OSS community and I like the product they ship, but $12/month for what is essentially a worse product than what DropBox gives you for free.
Examples: Freshbooks, HootSuite, MailChimp, KISSmetrics, Dropbox
That's a very important point to make: There's a comfort zone of about $5 a month that the typical consumer will pay for SaaS software. There really is no cap for businesses, as it's much easier to gauge the ROI of software that eliminates a position vs. software that tracks your runs.
http://webcache.googleusercontent.com/search?q=cache%3Aahmet...
However you can easily get a smaller slice of the bigger pie in an enterprise market with 20 customers instead of 5000, and that's much easier to accomplish.
This model seems more suitable for "go big or go home" players.
