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helpspot pricing considerations

May 30, 2007

With version 2 of HelpSpot almost ready I've been turning a few extra mental cycles to pricing. For the last year and a half (that's all it's been?) since HelpSpot launched the price has been steady at $179 per user and $49 per year per user for support and upgrades after the first year (which is free). I'm thinking of raising it, but at the same time I really like how sales are growing and I don't want to damper that. We don't get a lot of complaints on pricing and I agree with Eric Sink that that may be a sign of the price being too low. At the same time broadening the customer base is very important, especially with how advertising goes in the help desk world. It's simply too expensive to do any real advertising (think $30 per click), so a broad customer base increases our word of mouth sales and secondarily can help our search engine rank via portals which leave the "powered by" links as well as customers with blogs.

One area we do hear some complaints on is support costs. Percentage wise they are high at around 27% of the license costs, most software is around 20-25%. However, most other software require you to purchase major version upgrades where we include them. So far our conversion on customers renewing support has been very good, so it might not be a huge issue. If the license price was raised though and the support price was left the same then the percentage would decrease. So for some potential customers the price may actually appear more appealing even though it's in fact more expensive.

My main hangup is that v2 delivers a whole bunch more value. There are some highly requested and very powerful new features in there and so a price increase in conjunction with v2 makes a lot of sense to me. On the other hand, I couldn't be happier with sales and a part of me doesn't want to mess with anything :-)

Right now I'm leaning towards no change, but it's something I'm going to be giving a lot of consideration to. Especially over vacation while sipping on some margaritas :-)

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