Interseller was born out of necessity. Steven Lu, my co-founder, and I were unable to find an outbound sales automation tool that had all the features we needed at an affordable price. We found that our early sales process was fragmented and time-consuming because we had to use different tools to for separate parts of the process. We used one tool to find our prospect’s emails, another to verify/enrich them, and another to send email sequences. We couldn’t take it anymore, so we made one tool that did everything-in-between sales-Interseller.
Once we realized how much time Interseller saved us, we showed Interseller to some of our friends. It instantly clicked, they saw the value proposition right away and were willing to pay us to use it. Not knowing the value of what we had built we started at a $15 price point in January 2017 with unlimited lookups. As many of you may know, we’ve come a long way since then.
By June of 2017, we had realized that the $15 price point was too low, and tested to see if our customers would pay $30. Another aspect of this test was to see how much of an affinity our customers had to our products. The results of this test were positive. Despite the price change, we saw low churn rates; this suggested our customers saw more value in our product than we had assumed.
At the same time of the price increase from $15 to $30 we got accepted into Expa, an accelerator program. We knew that $15 was too low of a price point, and founders commonly under price what they build. During the Expa program, we were pushed to increase price. We’re still too cheap in the eyes of some the partners, but experiments on pricing never ends.
It’s also important to note, since the initial product launch, we’ve continuously added new features and improved the overall experience of using Interseller. This was a part of the realization that led to a price increase from $30 to $50 in September of 2017.
After a few months we noticed a problem at the $50 price point, Interseller attracted a lot of one-seat users. They were not our ideal customers and typically used Interseller for a month before churning. These users helped us get a better sense of who our target customer is by showing us who it isn’t. Pinpointing the target customer gave us a better understanding of the products we’re competing against.
In January of 2018, we increased our price from $50 to $100. We did this after conducting extensive research on what our competitors are pricing their products at. This price increase came after the addition of some significant new features and was also near the roll-out of a complete redesign.
Key Lessons From Increasing Price
We learned very quickly that warning users about a price increase leads to high churn and lower conversions. In order to help customers make a smooth transition we offered coupon codes that had an expiration date, this added a sense of urgency to renew or subscribe. Those who chose to renew the plan were also increased to the new price instead of being grandfathered into the old plan. Using the coupons led to higher conversion rates and happy customers.
Price economics of hiring a salesperson didn’t make sense at the $15/$30/$50 price points. At $50, our sales reps would need to do a minimum of 20 demos a week. This realization made us decide whether the product should be self-serve or requires a sales team.
When priced so low the perceived value of the product was much lower even though we provided a more valuable service than our competitors. A lower price point made it easier for potential users to dismiss our product without even giving it a try. By increasing our price we’re able to signal more value.
We haven’t received any price pushback from customers until we hit $100, even now it is very subtle.
Although we’ve increased our price significantly since the initial launch, we remind ourselves every day about why Interseller exists. Interseller was created to bring siloed sales processes in one place at an affordable price. Today, it’s not only improving early sales processes for our users, but it’s also saving them time from doing manual tasks.