Startup Pricing Is Hard

Think you’re the only startup with pricing growing pains? Fear not, my friend.

Packaging and pricing at a startup is messy.

Here are 6 true stories of pricing mixups, muddles, and missteps.

I lived to tell the tales. And you will too.

6 Hilarious But True Stories About Startup Pricing

1. New Features For All.

We rolled out a new feature that was only for clients on our highest pricing tier. **BUT** we didn’t have tech built to lock the feature down. So the next feature we rolled out was pricing tier feature enforcement. 😂

Silver lining – we had a few clients like the new feature so much, they upgraded to keep it.

2. Zero Discounts.

We noticed a customer was getting quite a bit of functionality for a rather small price. After checking the contract, we understood why. There was a zero missing on the final price tag. 🤦‍♀️

Our process for making contracts was that a sales rep would copy a beautified Google Doc, adjust the pricing and package details, and send to the customer as a PDF.

I can’t imagine how a mistake could have happened! 🤔

NOTE: This is a totally legit, very common way to do contracts early on. It rarely makes sense to have a fancy automated contracting tool when you’re getting started or the sales team is <10 people.

3. Sky’s the Limit.

Our pricing plans had usage limits…but no way to limit usage within the app.

Customers would go over their limit and we’d find out because they’d tell us or we’d manually check their account. Then we’d have a conversation and draw up paperwork for an upgrade that could be as small as a $10/mo.

Only much (much much) later did we add warning limits, minimum bundle amounts, and an in-app upgrade feature so customers could buy more on the fly.

4. Well, This Is Awkward.

We found out a customer was over their usage limits…because it crashed our app. ‘Nuff said.

5. Never Ever Do One-Off Pricing.

We had a well-known, enterprise customer who wanted special pricing. Now, everyone knows that one-off, ad-hoc pricing is a huge no-no. Terrible idea, say the startup and pricing gurus. And yet, when the check is big enough…

Every month, we’d request a data pull from the engineering team, put it into a spreadsheet, do lots of math, make it beautiful, and send it to the customer.

BOOM. Technology at work 😉

NOTE: While one-off, manually-executed pricing is hilarious/terrible, it can be a legitimate way to test a new pricing model and make money while doing so. Just make sure it’s a test and not the new standard.

6. Thanks for the Pricing Help!

We had recently updated our pricing packages. A customer was increasing their usage and wanted to upgrade to the next package. Going through the upgrade process, the customer pointed out that it was cheaper to stay on their current package with add-ons than upgrade to the next tier.

Oops! Glad we had a customer who was good at math to point out that our new packages didn’t make sense. 🙃

Happily Ever After

These stories have a happy ending. The startups involved were not laid low by pricing snafus. They have all gone on to tremendous success.

Was it because of their perfect pricing strategy?

Ummmm. No comment. 😂

Was it because they moved fast, cared about their customers, solved a huge problem, and learned from their mistakes?

Most definitely.

Are you going through contract or packaging growing pains? Any hilarious pricing stories to share?