Do I overprice my product?
Hi Indie Makers,
I’d love to hear your opinion on my pricing structure.
Some context:
- What my product does? It converts web articles into audio (text-to-speech) with quite a natural voice. Then send it to a private podcast feed, that users can listen on almost any podcast app.
- Since I introduced payment feature, about a week ago,
No one has paid for it yet. 😿 - User engagement seems down quite significantly. See attached charts of (active users vs number of article added)
- Currently, I have about 300 users signed up, About 200 of them add at least one article (to try out), about 20 - 30 users coming back from times to times
- My major cost comes from TTS API I used to convert articles to audio, roughly 16$/ 1,000,000 characters.
- I can charge based on number of words, or duration of audio files, but I wanted to make it easier for my users, so I just charge base on number of article. And I also want to make it a peace of mind for users so I use one-off payment basis.
Here are link to my product: https://sendtopod.com
Would love to hear your thought on whether this is too expensive. And why do you think so?
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Since you mentioned it costs you about $16/1M characters ,then I guess going any lower on your tier pricing might not be feasible.
Have you considered other ways of monetizing SendToPod?
Maybe an easier way to scale might be to have an entirely free tier, with no article cap, but have ads/sponsored bits every X articles read (5-10 sounds like a decent range). Spotify had a similar approach for free accounts.
This could help in multiple ways:
• You get more users since the app is free
• More users means you can charge more per ad slot
• You can later introduce an add-free tier
Just a thought! I know this might be a big change from what you planned tho'!
Thanks Sebastian.
I don't think it will be viable for us indie hacker. First people hate ads, and second you'll need a huge (millions of users) to attract advertiser to your platform. Not a business a solo-founder can handle.
i think you might be mistaken here. you do not need millions of users to attract advertisers to your platform. yes, you need millions of users if you want to have manscaped drop $10.000 per ad on your platform, but you do not need $10.000 per ad yet.
i'll just speak from experience. there are a number of smallish newsletters out there (including the one I used to write and recently sold off) that have 100-400 subscribers, with an open rate of 50%, that run ads in the range of $200-$500 per ad. so, let's say that's $200 for 200 views of the ad in a worst case/best case scenario. the great thing with audio ads is the proliferation of podcast advertising, so there is already a bunch of produced ads that you can plug in.
i would go all in with the ads. do a completely free, unlimited article, ad supported, tier. yes, people hate ads. so, if they really need your service, they will subscribe. if they don't need it as much, they will continue using it, and just live with the ads. you can now use the fact that this is a free service to attract new users. let's say, hypothetically, you get to 100 article listens per day. that's 3000 articles per month. throw in an ad after every second article (remember, articles are long reads so it's not like you're being harassed by articles if it were after every second song. it will be 10, 15, 20 minutes between two articles, at least).
price the ad at $1 per listen (make them unskippable), and you're at $1500 revenue per month. not bad. Drop the price to $.50 to make the ads more attractive and you're still bringing in $750 per month. you would need 75 subscribers at the top tier to match this.
as to how to get ads - yeah, it's difficult for a solo founder, but also part of our job :D you can always try to outsource ad sales to an agency for a percentage of the sales. but, i'm betting there are a lot of solo founders out there that would love to support you (especially if you could come up with a way to target audiences - play b2b saas ads on business articles, play restaurant ads on food articles... if you get my drift). hell, sell them the ads for $.1, you're still making money. you won't be able to get ads instantly, just like you can't get subscribers right away. so advertise your own stuff, run specials and packages where you drop the price significantly - just make sure you get people to use your service and get them used to ads.
keep the pricing simple - just two tiers. the free, ad supported one and add a paid, unlimited, tier. you can even go up in price with this. go up to $15, $20. maybe even higher. this will be for the users who really love your service and will pay whatever you ask of them to get rid of the ads.
other than that, @Lyb had the best suggestions on this thread. build this thing into a content monster - suggest articles, use already converted articles, make top lists.
your product is absolutely fantastic and could be turned into a powerhouse!
EDIT: also... you'r website copy/design seems more fitting for a b2b SaaS. I see this a lot among indie hackers (i'm guilty of it too) - we try to copy other websites we've seen, throw in as much info as we can, use catchphrases that don't mean much to regular people. i would rework the copy and the design. make it more regular-person friendly and push one thing forward - the demo of how it works. that's all you need. reach out if you want to talk more about this :D
@vukradic Thanks a bunch for your incredible write up.
But from my engagement data, thing does not seem to be positive. After introducing credit systems not many users use up their 5 credit point 🤔. Either I need to address user engagement first, or find and market the app to a different user segment. Then advertising or different monetizing could make sense 😁.
Just thinking here… is it possible that users are not using up the available free credits because they know that at some point you will start charging them and don’t want to get invested in the app? If it were free forever, there would be absolutley no threat they would have to stop using the app at one point
Is there anything that stops you to advertise your own product (i.e sendtopod) for every free article?
It’s like the “powered by” marketing. Probably worth to explore!
Not overpriced IMHO. I like the design and product idea. Good job.
Very cool product, the ability to upload arbitrary text (existing ebooks I have offline etc) would be a game changer (I don't think you offer that right).
Maybe be clearer how much it costs you on that page? For me it seemed expensive until I saw in the comment section how much it is actually costing you, I think potential customers will sympathise?
25 does feel like a small amount for $5 though, maybe experiment offering a per character pricing (with examples of average book size, or article size), rather than just article?
Have you considered introducing your own API/WP plugin, which people can integrate into their own blogging websites/platforms? It will give them the ability to speechify their own articles on their end.
If no one has ever told you it's "too expensive," it's probably not too expensive.
But that's not good news, because you want it to be too expensive, then you can just lower the price to get some sales rolling in.
I have no idea why people aren't buying, as I don't really have domain knowledge of your market niche, but I'm pretty sure price isn't the issue.
I think it's more like people don't feel the pain enough to pay for it :D.
If that's the case, you know you need a new idea.
You can't make people feel the pain if the pain isn't there.
I know it sucks, but it may be time to move on.
It's difficult to get consumer to pay for anything. So I feel like this is not a pricing issue, it's more that you haven't discovered a problem so painful that your users are willing to pay anything for. Great product nonetheless, good luck!
Hey, you hit nail on the head here. It's also my feeling for why people don't pay. Basically I'm competing for other paid software people is using like netflix, apple plus, etc.
The price of $5 is not expensive. The value proposition relative to the $5 is. The alternative is just to read. While some people might have time to listen, or need that kind of alternative form to extract information, reading is by far the fastest. So you are competing in a very niche form that has lots of alternatives. It will be difficult I think.
I get your point. Most people prefer reading over listening. This definitely a niche. But I was hoping for more people to have this need thou 😆.
so, maybe make very specific targeting to those niche clients. Who would need this and who would paid for this. and target those audience specifically.
A good pricing strategy balances cost with value. Since you can not reduce the cost-side by a lot considering the TTS-API you might try to increase value for your customers.
One thing I could see working is offering access to the (already) voiced articles other users have paid for. This will allow you to gradually build up a library of good articles which do not cause you and additional cost while potential users get a ton of value and a good impression about your product.
Other possible value-increasing measures:
5$ and 10$ are no big price tags, so if the users can see enough value behind them I am sure you get those dollars flowing in :)
Best of luck
Wow! Thanks for such an insight analysis and suggestions!
I already tell them about free article. I need to update the pricing section to reflect that.
I'm not your target market, so take this with a grain of salt, but I'd price this as a subscription model and perhaps set monthly or annual limits.
I'd imagine that anyone who uses a service like this, would do it pretty consistently and thus burn through those tiers pretty quickly.
During my beta. I did not see people go pass 25 articles/ month. Most have like 10 or lower. So probably it's not the limit is the problem here.
I could see a pain point preventing user from add more articles:
I don't think so
That’s interesting! Indie hackers tend to kinder to each other I guess 😁!
Love your product idea! As a podcast lover, I can totally see how I can use commute/cycling/housework time to get more information with audio.
But also as a podcast lover, only a few of us EVER pay for podcasts, as most of them are free. So are online articles. So there's not a clear reference point for me to understand if $5/25 articles are cheap or expensive (intuitively thou, I feel it's pretty cheap, considering 25 good articles can easily take up a week of listening).
Have you considered a B2B route, so to charge content creators/authors to have an easy way to convert their writing into podcasts, and help them reach a wider audience; I can assume some of them already have the pain of wanting to expand to podcast but don't have the time/ability (not every writer is a good talker ;)). And they have stronger monetization interest than readers/listeners.
Price is rarely the problem.
And when your solution costs 10 dollars it's absolutely not a problem.
Think of it this way - the people using your product are doing so on a computer that costs many multiples more than your solution. In fact, the underwear that they are wearing whilst using your solution probably costs more than your product.
The reason you aren't able to generate any revenue right now is that your marketing is not on point.
Fix your marketing, fix your problem.
This is one of the coolest products I have used. Am actually listening to blog I wrote for the first time. I would pay to covert my podcast and download the audio.
And adding an Advert at the beginning of the audio.
I don't think it's overpriced, but have you validated the idea in a way that your customers are definitely ready to pay for this? Maybe try contacting potential prospects and talk to them about what features they would need in order to make this purchasable for them - if possible I would try to convert them to a monthly subscription.
Well, when I started out, I myself have that problem and I found a competitor who launched on product hunt with 1200 upvotes, so I'm convinced that there is a market for it. And I can build similar or even better product than them🤔. But so far it's been quite tough.
I'm confused as to why you would not turn this into a subscription-based business instead of charging per X articles
As a consumer, would you rather pay for a subscription or a one-off payment, where you don't have to worry about canceling?
There are more than one businesses I'm glad to pay as a subscription if they provide enough value.
However, I would think a one-time payment would take more thought process if I'm to pay for every article I follow, it's easier just to subscribe and get unlimited articles in my inbox/RSS reader. It's less cognitively demanding.
So worry about canceling(which you'll only worry a few times a year if the service is good)
Versus
Worrying about buying or not something every time a new article comes out?
The second option looks like more hard work on the part of the consumer.
I think initially you should give some trial basis stuff. I think It will be helpful.
Try to change your pricing model. What if instead of counting articles you'd just charge for the period of time, like $5/month or even more, but without restrictions on the number of articles to listen to? You can experiment with numbers and prices but I hope you've got the idea.
What if you were instead marketing this to businesses with content that they could enhance with an audio file and charging 1$ per article? Is there any service already doing that? Then, I wonder if making it free for people who need it or want it for accessibility would result in that audience recommending it to places where they want audio content. I know from my experience in education that it's uncommon for households to buy premium versions of an ed-tech app and it's more common for the school to go ahead and buy a big-ticket subscription for the whole building.
I think you're asking people to do too much math in their head with the pricing. They start to think how they can stay on the free plan by writing more articles under (or at) 1000 words. I also feel like $5 is too cheap to be honest for 25 articles. At least give it a word cap and leave the top tier for unlimited words.
Oops. I think you maybe mistaken a bit here. This is for consumer not for creator!
Maybe you selected the wrong pricing model?
Maybe you should charge per month instead of pay-as-you-go?
Maybe try to charge 29$ per month for 30 articles ...
if the price is too low, customers also think that the value is low.
"Listen to your favorite articles on your podcast app"
What evoke in my mind is that why to pay when i can read myself.
As per me, maybe I am wrong, you are not conveying the value properly. Listen to your favorite articles on your podcast app this is what the app do, but what will I get if I pay?
You are looking at the wrong problem statement. To get inspiration, check out how apple present their products. They never mention what the product do or have.
I hope this helps you in some way.
Hey, thanks @thegaurav03!
Of course there are always that argument.
My use case for listening to these are mostly:
My ideal customer are ones who commute a lot, and prefer listening over reading.
I'm sure I can improve my positioning better. But I'm still concern about my pricing, since my existing customer does not seem to convert to paid user. 🤔
For your ideal customer, you can change the heading as
"Make the most out of your commute" Sub "Let a human read you the article you want" Does this make any sense?
Everyone knows a commute is a waste of time. You can revolve the words commute, driving, travelling, etc., to target other segments.
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Awww. I appreciate your acknowledgement Shane 😍.
Maybe I need to emphasize this on my landing page to help people see the value a bit clearer 🤔
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