[billpatrianakos]

I like to always make the point that users are spoiled and have an awful sense of entitlement when it comes to the web but in this case I can't say I blame the users. It's really important to think long term and definitely overprice your product rather than pricing it as low as you can. If the price point you set can't be sustained in 2 to 5 years with the number of users you project (and this is where you should overprotect or, put another way, plan for the best case scenario) then be ready for some backlash and lost customers. Always try to make it so you have to lower prices as username grows. It's common sense. Now of course you can't always do that and you have to feel for the company when that happens but the customers will get over it. So long as you handle it well and you're offering something people want the users will pay the higher price as long as they're still getting value from the product.

Customers bitch about every little change you'll ever make so sometimes you just have to take it with a grain of salt. Hell, even free services get this when any change is made because people already using the product don't want any change. At all. Humans hate Amy and all change. So if you think enough current users will eventually get on board and new users will surely get more value from a change then it's worth it.

He frames this in terms of grandfathered pricing but really it's about users reacting to change. Higher pricing is the worst kind of change a user can experience but in the end it's almost no different than when Facebook changes privacy settings (or changes your email address without asking). The success or failure will be based on new users valuing the change thus getting them to sign up and current users eventually getting used to it versus the exact opposite of that. Users will bitch about all changes always. Upping the price, unfortunately, is the worst thing you could probably do. But they'll get over it.

[chii]

Its very interesting.

I recently read an article about a game (i think it was realm of the mad gods), where the developers of the game initially priced some items cheaper, but got more expensive as you purchased more (i recall it was chests that allow you to store extra items). Buying 1 is say, $1, and 2 is $2, but buying 4 is $5 (this is to encourage casuals to buy 1, but extract more out of the hardcore players).

This lead to quite a backlash - so they changed the wording, such that buying the 1st one is still $1, but it was made clear that it was discounted X% from the 'real' price. This simple change, stopped almost all backlash.

So it is basically a psycological phenomenon. Its a similar thing to what this TED video had to say about how people estimate and make decisions http://www.ted.com/talks/dan_gilbert_researches_happiness.ht...

[jusben1369]

Well burying pricing and then doing a "gotcha" is pretty offensive. If that's what happened then the lack of transparency was probably the key point people objected to.

[jusben1369]

I hear what you are saying. I think it's very hard for a new business though to see that far out. Pricing too high too early can also mean no or very few customers. Secondly, you may price it accurately today but your customers drive you to enhance the service (and the costs) by adding more features. That's all healthy but that can also mean even the best laid original pricing needs to rise.