BSSA #75 - We're testing a new crazy pricing 🚀

Hey! What’s up? 😎

Last week I said we reached $52,000 MRR. Well… We just reached $54,000 already!

(Yea you read it right, I didn’t have the time to tell you about the $53,000 milestone!)

In today’s email, we’re going to see:

• The big pricing change we’re trying

• Our new plan before Black Friday to boost MRR

• Building a Shopify App with no competition

• What to do with a low “Recurring Charge Accepted” rate?

Let’s go!

The big pricing change we’re trying

I wanted to try this a long time ago.

WideBundle’s pricing is one of the few things I didn’t change or didn’t make tests with.

And it’s pretty considering the pricing is the best way to increase the revenue significantly.

So for the rest of 2023, we’ll be testing the price a lot.

And I will obviously update you on the tests.

What we’re currently trying this week is to go from simple pricing (1 monthly plan) to incremental pricing where the price increases based on the monthly orders.

It’s a big change. But this is how we’re managing it:

• We switch the price for a single week (to get enough data)

• We go back to the previous price at the end of the week

• For the next weeks, we will track the users on that new pricing

And we’ll compare the different numbers: conversion rate, churn, MRR, etc.

We want to answer this question: Is incremental pricing better?

There are multiple scenarios that can happen:

• The number of installs drops significantly and the MRR isn’t as good as it should be for these users → We go back to the previous pricing

• The number of installs stays the same but the MRR increases → We’ll keep that pricing

But there is also a scenario that is interesting:

• The number of installs drops, and the MRR drops a bit (for example $45,000 instead of $50,000) BUT the churn is lower and the number of users is reduced by 30% (it means less support and fewer problems).

And in that case, the decision will be very important.

What would you do?

Anyway, I’ll tell you if the test is positive or not!

Our new plan before Black Friday to boost MRR

The pricing test isn’t the only one.

We’ll have a safer pricing strategy.

Currently we only have a single plan but we’ve been building many features in the last few weeks that were requested by our best users.

Our goal is to create a more expensive plan with these features so people would pay more to use them.

Our goal is to release it quickly so people can take it before Black Friday (Aka, the best moment for them to take it)

We’re a bit late but we’re trying to go fast.

And there is a special thing we’ll try and I can’t wait to let you know how it went:

We will introduce priority support.

People will be able to add an additional 10% to the plans in order to get priority support. We’ll push the conversations higher to give them priority.

And since our support is already quite fast, this is a great add.

You don’t want to do that if your support is slow otherwise customers will think they have to pay to get support.

And if your support is already fast, it will be a perfect fit because you are already providing great support.

Well, this is another test we’ll make (after the incremental pricing) and I’ll let you know in the next months how it’s going!

Building a Shopify App with no competition

I received this question:

And I thought it would be helpful to many people.

When I started WideBundle, there were already many bundle apps. But it didn’t matter, I didn’t consider them as competitors when I started.

You can easily make $10K per month with an app by targeting a very specific problem not fixed by competitors.

As you grow, competition is important because you need more and more users so you can’t just target the people with that specific problem.

But when you start, your goal is to focus on a very specific problem.

So the rules are:

You don't find ideas.

You find problems.

Finding problems means someone has an unsolved need.

And by definition, an unsolved need doesn't have competitors.

Otherwise people would use this competitor and wouldn't have the problem anymore.

So here is the roadmap:

1. Find your target

2. Find problems

3. Find the idea based on the problem

4. Validate it

5. Build it

The first step is to find the target. And to do it:

You need to think like them. And it's complicated because you're not them.

But look around you. Why is it so easy for you to find people like yourself?

Because you are yourself and you think like yourself.

You'll:

• Follow the same people

• Go to the same events

• Do the same things

• Search for the same terms

• Engage with people like you

• Read threads like this one

So try to be in your target shoes.

What would they do? And start doing the same.

What to do with a low “Recurring Charge Accepted” rate?

I received this question:

And you know how I love improving and tracking things.

I currently have between 72 to 85% rate for my apps.

It means people will see the prompt to accept the charge and 72 to 85% of them will convert.

That person has 45%. It’s really low and if you can get that 45% to 60% it means you can get 2 more paying users every 10 installs.

Before starting, you need to track this data. I’m sure most of you don’t even know what rate they have.

So go and calculate it by sending an event when they go to accept the charge, then when they actually accepted it. You can then filter by people who did the 2 events to see the % of people who actually did it.

Once you have your number, you can make assumptions, do your tests, and see if it improves.

Here are my assumptions:

• The pricing on the app listing is different than the pricing on the prompt page

• People didn’t expect to pay the price shown on the prompt

But we will probably need more data if these assumptions can’t be used.

I’d create a cohort of people who didn’t accept the charge and try to collect as much data as possible:

• Who they are?

• When did they create their store?

etc…

With that information, you can find patterns that could potentially explain what is going on.

You can also do some tests to see if the problem is the price or something else:

Change the price (reduce it by 50% for example) and see if the rate is the same. If the rate is the same, it means the price isn’t the problem.

Just remember the pattern:

• We start from a number

• We make assumptions

• We validate these assumptions.

That’s it for today’s email!

I hope you enjoyed it! Feel free to share my newsletter with someone else: https://news.matdesousa.com/

And let me know what you want me to discuss in the next email!

See you next week,

Mat 😁