OnDemand WTP Pricing Research

Same great service, new great price! | Expensify Blog

But this is where we got really tricky.  At the time, we were aiming for the 10 person company.  And we know that for a typical company, about 25% of the employees will submit a report in a given month.  So we knew that for most of our companies, about 2 people would submit per month.  So the brilliant plan?  Give away the first two users for free.  This neatly ensured that for 100% of the market we were going after, Expensify remained exactly as free as it was before, but now with the fiction that we had all these larger companies paying us.

But to our great surprise, larger companies suddenly started paying us.  We were aiming for the 10 person company, only to see 100 person companies sign up in droves. We were astonished.  But later we learned that this model, through sheer chance, is actually really awesome.

To start, we picked a price of $5/submitter/mo out of thin air on the assumption nobody would ever pay it.  But it turns out that price is actually pretty good.  Certainly less expensive than all the competition, but not *so* much less that it feels crazy.  You could argue that $5/submitter/mo is actually pretty good “penetration pricing”, which would have been very smart of us to do had that been our goal.

But even better, the “first two submitters/mo free” model is brilliant.  It lets us get a certain amount of traction in the company before anybody is even prompted to think about pricing.  And by the time they do, they’ve already adopted Expensify without realizing it.  It’s genius.

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Same great service, new great price!

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