How much should I charge?On June 6, 2017 by Ilene
The Chicago Botanic Garden is large garden and tourist attraction that opened to the public in 1972. (It’s a funny name though since it’s actually in a suburb of Chicago called Glencoe.)
Besides the name, one thing I find interesting about the Chicago Botanic Garden is how they charge.
Most museums in Chicago, like most museums everywhere, charge an entrance fee. If you plan on visiting those museums with some frequency, they offer a membership where you get “free” entrance to the museum on all your visits.
But the Botanic Garden is free. For everyone. You just walk in the door and go.
What they charge for is parking. When you get a membership, really all you’re getting is free parking.
It’s an interesting take on membership for a couple reasons. One, they do something different than most of their peers.
And two, they charge money for something that actually encourages better behavior that makes the experience better for all their customers. If you do something good for your body and the environment (walking, biking, taking public transportation), you get in free. And for the rest of us who still have to drive, you can find a parking space nearby without having to circle a lot or park in some remote garage.
It strikes me because so very few of us bother to try pricing any different than our peers. All of us talk a big game about being “different” and then we charge just like everyone else.
For Draft, the writing software I made, I was hell-bent on charging differently than others.
I realized that a lot of people came to Draft for the simplicity of its interface. Whitespace was the premium real estate. So what if I charged for “more whitespace”? I added a button that simply said “Unregistered” that you could pay to remove.
It’s been a neat and successful experiment that could be pushed a bit further. But, it still doesn’t nail the idea of a business model that encourages people to perform better behaviors.
Most of us, Highrise included, charge in a way that actually discourages good behaviors. Many charge per user, discouraging people from wanting to invite more users. Or we charge per project, contact, case, whatever, again discouraging people from creating those types of object in our systems, where we should actually be encouraging folks to use our tools more.
From our Jobs-to-be-Done interviews, where we drilled deep into the reasons folks used Highrise, Ryan Singer had some great insight on charging for Highrise differently. Right now we charge in buckets, essentially: Small-Medium-Large. It still discourages people from growing their accounts.
Instead, we should experiment with matching our pricing to the specific job people have for our tool.
Perhaps, we should have three pricing plans fitting the three different jobs we found our customers had. So there isn’t really any choosing between plans: you either fit in plan A, because your business looks like A, or you fit into B, because your business function looks identical to B.
Or a single price that fits the single core user who benefits from Highrise the most.
A customer would never have to think before hitting that invite or “Create” button about some limit they’ll be up against trying to use the system more. They’ll just create.
I think most people find our prices pretty fair, but I think we can do better. Stay tuned. I hope we can make some changes in the near future to price a lot more like the Chicago Botanic Garden does.
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