I have a product for monitoring specific areas of content within webpages and notifying the customer when changes occur to this content and what they are. (E.g. monitor the latest stories on a news website page, but ignore all other content on the page.) The product is run an online service.
At the moment I have one customer (although they are intending to use it on 10Ks of links) so the pricing mechanism is at an early stage. I would like to figure out the best way to do it before we go about automating the billing and payment aspects.
Currently we charge per request to check the content, and we charge more for requests that need to be checked within shorter time windows. Since Users may be performing 1000s of requests daily, according to different schedules, and also manually requested through the interface, this can lead to quite complicated billing calculations.
First, should I translate the pricing into credits, where for example a slow request costs 1 credit and a fast request costs 2 credits?
Is this going to make is a bit easier to understand for the user?
Would it potentially make them spend more money?
Second, would I better to institute a tiered subscription system or a pay as you go system?
There needs to be some form of bulk discounting so either;
£X for 0-1000 credits per month
£Y for 1001-10000 credits per month
£Z for 10001-100000 credits per month
if you go over the limit for your level you have to upgrade
£X per credit and you have to keep topping up the credits, but you get a discount if you buy more than N credits at a time.
The issues I am trying to consider are:
As I am based in the UK, I also need to deal with VAT correctly and in a way that is not confusing to users from different countries.
I think you're on the right track but you should not make it "credits" but do a simple model like:
Your first question shouldn't be about detailed pricing structures but about what's driving value for your users. For instance, I'm not sure whether your point about distinguishing fast and slow requests points to value for your customer or/and cost to you.
In general, the pricing structure should align closely to how you create value for customers, and pricing levels in the early stages should mainly be driven by the kind of customers you want to take on and your capacity to service them.
It's always a tension for a startup - when do you try and get the pricing right? It sounds to me as though you have a proposition that's going to appeal to a very specific niche, and that should mean it's possible to do 'right-pricing' early - which is probably when you sign your second customer!
There's a strong school of thought that pricing is just like any other optimization exercise - something to do continually, by testing. In my experience, that's a valid approach for broad appeal, easy sign-up, low initial value services, but I doubt that matches where you are now.
I'd suggest taking a look at any successful companies that provide api based services and comparing their pricing models. Whatever you do, Make it simple and transparent.