Do Pricing Pages Really Matter? Complexity vs Clarity
Is it the right place to drive impact?
For those unfamiliar, the Way Back Machine allows you to input any URL and see all of the historical changes made to that page.
It’s a great rabbit hole to go down, and you can see what the first homepage looked like for all big tech companies.
Besides being fascinating (and making you feel better about your current homepage), you can learn a lot by looking at this historical data and how products/companies have developed.
A trend that I have noticed is that the most frequently updated page for almost every tech business is the pricing page.
This makes sense at first, as this should be a major decision-making point for customers, and it’s where you convince them to buy.
Also, the complex nature of software products and the teams that run them means that the pricing page is a pretty easy place to make updates without disrupting other work.
The page likely doesn’t have a lot of technical debt, and the functionality is pretty simple. Pages like that are perfect for running A/B tests and finely measuring impact.
But just because this is an easy place to work, is it the right place to drive impact?
Buyer and End User Overlap
Pricing pages might matter, but the real question is, what % of our users are making purchase/upgrade decisions based mainly on the pricing page?
Are they casually glancing at the pricing page and then upgrading in the product to unlock a feature? Or are they using the pricing page to make the final decision?
To understand this, you need to figure out:
- How much overlap do you have between the person who uses your products and the person who buys your products?
- Where do purchases actually happen in the product?
This will vary based on several factors, such as:
- Target customer — B2B vs B2C?
- How your product is sold — Sales Teams vs Self Service vs a Mix?
- Style of monetization model — Freemium vs Direct Purchase vs Trial Model vs a combo of these?
The end user’s needs drive the need for a purchase and/or upgrade, but the buyer needs to initiate that and make a decision.
Let’s take a look at Zoom’s pricing page as an example:
Zoom has hundreds of potential packages when you consider all the tiers, verticals and add-on features. I have spent thousands of hours on Zoom and used it across multiple companies, and I have no concept of which tier of service I was in.
Someone in the company bought it, likely aided by a salesperson, and I just got a license.
Contrast this with a company like Spotify, whose pricing page has a single pricing tier for premium and instead pushes you to buy multiple licenses via dual and family plans.
I have used Spotify for years and know exactly which tier I am in.
When Do You Need Clarity vs Complexity?
Looking at these two extremes raises the question, which should you be using and why?
B2B companies typically start with a few tiers but then expand their service tiers to capture more value from each account. They can do this because the material deal sizes are aided by salespeople, who help you decide.
B2C companies tend to start with 1 or 2 tiers, ideally with clear distinctions between them. As I mentioned in a previous post, the best consumer products have easily understandable positioning, which helps with user decision (i.e. conversion) making and spreading word of mouth.
- Spotify Premium = No Ads
- Amazon Prime = Free 2-day shipping
- Pandora Premium = Unlimited Skips
- NY Times = Unlimited Articles
Most of these products also have other features, but these are the main benefits users get in these tiers, becoming the “tentpole” feature that users will describe the products with.
To oversimplify:
- The more likely a salesperson will sell your product, the more complexity you can introduce and benefit from.
- The more likely the user is the buyer of the product, the more understandable each tier has to be.
So What Should You Do With This Information?
1. Figure out how much of your traffic actually purchase through the pricing page.
When we did this at Codecademy, we looked at how many purchasers had visited the pricing page within a few minutes of completing the checkout page. The exact number escapes me, but it is very small.
This means that all of the work we did on the pricing page to improve conversion likely wasn’t remembered by the users and never showed up in the A/B test. Most users purchased in the product to unlock content or a feature without ever seeing the pricing page again.
This doesn’t mean that you should abandon your pricing page or that it should be clear, but it might mean that you should spend more time focusing on the points in higher leverage areas.
2. Figure out where the user decides to make the purchase
If users aren’t buying through the pricing page, you should figure out where they are in the product when they decide to buy.
Are they buying to unlock a feature? Expand their credits? Add team members?
You can likely look at inbound traffic to the URL of your checkout page, and stack rank this based on volume. These are the places in the product that you’ll need to work on adding clarity, increasing motivation and clearing confusion.
They are also where you are more like to get statistically significant results on your A/B tests because you are so close to the point of purchase.
3. Ensure your paywall & product tiers have clear positioning
Much more important than the look and feel of the page is the difference between the tiers of your product. Does this make sense to your users, and can they describe it?
Clarity is always your friend, regardless of your maturity and sales motion. For word of mouth to travel, your users need to be able to both understand the product and easily describe it to others.
Ask your paid users why they upgraded. If they can’t say or name a free feature, then you might have a problem.
This is especially important for consumer and small team-focused SaaS products.
