Marvel Internet Group blog

Deciding how (and what) to charge for JustRosters was definitely a task I had under-estimated. I started by looking at the pricing for some of sites I discovered in Part 1. Of the sites with pricing listed, (I hate sites that do not list prices!), there seemed no typical pricing model. I decided to tackle this problem from the ground up; for my benefit as much as any future clients.

Once off vs. subscription
This was a pretty easy decision to make; monthly subscription. Client benefits of the subscription model include low up-front cost, ability to stop using the system anytime without losing an ‘investment’ and the reassurance we will continue to work for their business month after month. Benefits for us include a steady flow of income on those rainy months and an easier sell.

Include SMS, or charge extra
One of the major costs in running a service like JustRosters will be the SMS’s notifications which are sent out. My initial thought was to roll this into the cost of the subscription; I quickly decided this was unfair for businesses that do not use this feature. To make things simple I created some SMS credit bundles (with pricing related to quantity), and made a note to include a small amount of SMS credits in each months renewal, for free.

How to split the pricing levels fairly
While providing a ‘one size fits all’ pricing scheme would make things simple, it is not really practical. As the amount of staff each company has increases, so will the cost of our time / resources to support them. Comparing information on typical business sizes I decided on 4 plan sizes:

Micro: 0-10 staff.
Small: 11-25 staff.
Medium: 26-50 staff.
Large: Unlimited staff.

While the unlimited plan seems fairly open ended, I figured income from SMS bundles will increase relative to the businesses size, so I was not concerned about the strain a 500-employee company might put on the system at this stage.

Summery
Now I knew I would charge businesses of each size monthly, it was time to build a spreadsheet factoring expenses and a desired profit margin. I would love to be to say this delivered me some golden numbers which I have used, but it really only gave me an idea on what I ‘needed’ to charge to make the business viable with around 500 clients (my first goal).

I rounded these numbers to slightly prettier ones, and moved on wondering how I ended up spending a day on something I thought would take a couple of hours

EDIT, February 27, 2009: I have decided to reduce my prices by about one third. I have done this for a couple of reasons. First, the weak Australian dollar. Since our pricing is based on USD, I do not want my fellow Aussies having to break the bank to pay for JustRosters each month; the economy over here is bad enough for us. Secondly, the software is brand new. We really want to get as many people on the system giving us feedback ASAP. We can always move the pricing up later and hold it for the guys that get on it early.

EDIT, March 02, 2009: One of our competitors has just re-launched their website with new pricing. I am happy to see it comes in around 3x the cost of JustRosters.

Tags: justrosters.com, pricing, subscription

This entry was posted on Tuesday, February 10th, 2009 at 12:25 am and is filed under justrosters.com, marvelig. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.