Over the past several months, I have shared what my/PipeCandy's view is about the eCommerce and D2C markets.
Today's essay is a little different. Instead of pontificating about the market, I am inviting you to the 'behind the scenes' pricing exercise that is still work in progress. I am fascinated by how much we have got wrong and how nuanced pricing is. A lot of you are founders and executives that run businesses. I hope our findings spark ideas for your own contexts.
Who are we?
Most of you should know by now - we are the eCommerce and D2C brand encyclopedia. We build datasets, insights, and applications that help you discover and dig deeper into the 'truths' about millions of eCommerce companies.
We are a 'data as a service' company that predicts the pasts of the companies we track. Private companies are hard to find and track. There are three dozen nuances about how an eCommerce company could be classified - by revenue, AOV, orders, product taxonomy, customer type (business vs. consumer), revenue transaction type (subscription vs. one-time), consumer financing (none vs. buy now pay later) etc.
None of these data points are available as structured data. Once you put them all in a consumable format, the truth about a company emerges. We get templates. Once you start merging various such truths, you can generate insights. That is what we do.
The idea of the value metric
For PipeCandy, the primary value metric is the 'number of companies' you can export to your CRM or download into an excel sheet. (A lot of you are our customers. So correct me if I am naive in understanding you :P).
The secondary value metric is the 'qualification criteria'. We do our job well when we can help the sales ops & demand gen teams build lead lists using our data based on the 'qualification criteria' that matters the most. Simply put, the better they can qualify a lead list, the more successful their campaigns will be.
Everything else is tertiary. Now let's tear down our pricing model. There is some real stake in this for you, because if we do get our pricing right and if you could give us the feedback before we roll this out, you may be able to experience PipeCandy in a better and more affordable way.
Our current pricing plan
The issues as we see it:
The top 3 things listed in the plan are not the primary or secondary value metrics at all. They are good to know but that's not why our customers buy us. Do you agree?
The row circled in green is the actual primary value metric
Premium Filters - There are options like ZoomInfo or DiscoverOrg and a dozen small companies. But PipeCandy has a place because we capture nuances related to eCommerce. Why does that matter? It helps the demand gen team build very specific qualification criteria that allow them to be precise with their campaigns like they cannot do with non-commerce databases. But we do gross injustice to this ability by just calling it 'premium filters' and have been commoditizing it so far. What attributes one can use to build a set of 'qualification criteria' is just as important (if not more) as how many companies they can download. They are not 'filters'. They are 'qualification criteria'. By ignoring the importance, we have been taking a very 'commodity' positioning while in truth, what we do is unique.
Our pricing, in reality, is just one plan with a slider for the number of downloads you need. Whereas, a Shopify agency's qualification criteria is very different from that of a logistics company. They deserve totally different plans with different price entry points.
Finally, all our plans are annual - making it unaffordable for many.
Data is a 'winner takes it all' market. You anchor yourself as a 'go-to' source which reduces CAC which can lead to price flexibility which can lead to the flywheel of 'winner takes it all' spinning. We have been doing the opposite. We work with just hundreds of companies that can afford to pay tens of thousands instead of working with tens of thousands of companies that can pay low thousands of dollars. We didn't let the flywheel start by designing a pricing plan that works against it.
Our new approach:
I will be super-thrilled if you can chime in on what you think about our new plan.
If your need is simple you should be able to experience PipeCandy for under a couple of hundred dollars a month. For that pricing tier, the user would be able to qualify companies based on the technologies they use. The annual plan gets a 20% discount.
If the need is more nuanced and sizing of companies based on revenue, traffic, etc. becomes important, the entry point is less than $1000 a month, with a 10% discount for annual plans
If an enterprise or a sophisticated marketing org needs highly precise qualification criteria, they'd have to go for our Commerce plan that starts at $2499 (but with annual commitment only)
All plans will have monthly usage limits (for views, downloads, etc.) that will not carry over. Users can buy additional credits for a month, should they need more access for a specific month. This will help us reduce the uneven pattern of revenue accruals while also enabling us to give a very affordable entry price for most and increase the revenue from those users who have heavy usage patterns. The pricing aligns with the value generated.
We are now adding 'Contacts' and 'Outbound marketing concierge' as partner offerings - facilitated by PipeCandy but delivered by other organizations. To remove the friction, we offer them at pre-negotiated prices so that you have the total cost clarity, single contract, and vetted vendors
What we did not do?
We did not launch add-on attributes. It is tempting to take out a few attributes and give them as add-ons across plans but it interferes with a good pricing design (which should clearly demarcate the value of each pricing tier and give a logical nudge for upgrading). Add-ons distort the value and break the natural upgrade cycle. If a natural upgrade cycle breaks, price affordability will take a hit. PipeCandy's original plans are unaffordable to many for this reason.
Give random, cool-sounding names to our plans. Instead, we are going for purposeful names. A good pricing plan should lead the buyer to self-select themselves into the right tier. Our current pricing tiers have names like Experiment, Leapfrog & Dominate. What do they even mean? Who are the 'Leapfroggers'? They sound fancy but little else. Instead, we are going with 'Tech, Online & Commerce'. If you need to qualify companies by technology, go for 'Tech'. If you need to qualify by 'online metrics and features that are website related' go for 'Online'. If you need sophisticated qualification needs that are tied to the eCommerce business model, go for 'Commerce'.
Note: The plan pricing and features below are provisional and do not show the full set of features/usage limits etc. and are shared to illustrate a 'work in progress' exercise of price discovery. We will run a series of experiments culminating in a new pricing plan by December.
PS: If you have come this far and have not already availed yourself that $100 free credits to use PipeCandy Prospector free for a week, let me know. We can set you up for it. Simply sign up for our free trial and let me know.
Have a great weekend!
PPS: I might just take a break for the coming weekend (or I might not!)
PipeCandy is a market intelligence platform that tracks the global eCommerce & 'direct to consumer' landscape.
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