Transition to Pay Per Use to Delight Your Users

[GenoFAB]

HubSpot Pricing Structure is so complicated that your sales staff cannot even figure it out. 

It's sliced across four dimensions:

- Products

- Features

- User seats

- Number of contacts

There is a huge difference between the starter plan ($50/mo) and the Professional Plan ($1,6000/mo). And that's not even including the free CRM plan. 

This gives the impression that the starter plan has been engineered to trick the users on the plan to upgrade because they are going to need a critical feature. 

I recently signed a client on the starter plan after spending litterally hours on the chat and on your site to understand what essential feature is missing from this plan. I identified a few  features the client could have used but could live without. After starting to configure their account (and paying for the annual starter subscription), I realized that CTAs are not available on the starter plan. As a result, a number of themes are also no longer available. 

The whole experience feels like your pricing strategy puts gun on your customers head to extort as much money as possible. It certainly does not feel delightful. 

Your pricing structure is so complicated that it certainly increases friction in your sales process because nobody can make sense of it. And it probably scares away potential leads. 

The value of HubSpot is in the integration of the different features. By selling the products in different products in a way that limits access to features, you are undermining your own value proposintion. 

Why not transition to a completely pay per use model. Have a single plan with all the products/features and charge by the number of contacts. Contacts are the main metrics of HubSpot usage. You could charge for all contacts, not just marketing contacts because the boundary between marketing and non-marketing contacts is sometimes blurry. Any contact in a database has value or it should not be there. 

You could charge $0.1/mo/contact with a minimum of $100/mo or 1,000 users. $100/mo is pretty standard price for professional SaaS products. It's high enough to limit the number of irrelevant accounts but not so high that it would deter qualified leads. It's also better than a Free CRM or the price of the monthly bundle at $45/mo. 

On the upper end, if the PPU model makes your largest users have second throughts, you can softwen the blow by having multiple tiers. The first X contacts are charged $0.1/mo/contact, the Next X contacts are charge 0.09 etc. 

Calculate the usage fee on a monthly basis based on the actual number of contacts in the databases rather than the purchase of blocks of contacts users don't already have. 

The cloud computing companies like AWS use this model very successfully. It gives users the opportunity to learn how to leverage the value of their product without having a sticker shock or getting migraines trying to understand their price table. Their user end up paying way more than they expected but they are locked in because they see the value and their entire operation depends on these infrastructures. Moving away is simply too risky and expensive. 

HS is the operating system a company sales and marketing processes. Get people to experience the power of leveraging the complementarity of your great features rather than dissuading them with a pricing strategy that simply does not look fair and honnest. 

You'll make more money.