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Estd 4.22.2023
Below is our answer based on the approach outlined in our pricing strategy book, Price to Scale:
• It really depends on your overall pricing strategy and customer expectations.
- If most of your customers find themselves paying more than your entry price—for example, due to add-ons or advanced features—a “starting at $X” message can help you capture initial interest without promising that most teams will only pay the low base rate. This approach sets expectations for potential upsells or tiered pricing.
- On the other hand, a “per user” model offers transparency and scalability. It’s easy for customers to understand how additional users will impact their billing. However, if your team structure or feature set makes additional costs likely, a purely per-user figure could understate the eventual cost, potentially leading to confusion or dissatisfaction later on.
• Our book, Price to Scale, emphasizes matching your pricing presentation with what customers are accustomed to. In one section, we discuss how customer expectations shape their understanding of value (see also our discussion on value metrics). Clearly communicating pricing details and giving context—for example, by explaining that the “starting at” price applies only to a basic configuration—is key to building trust.
• Practical application:
- Consider a hybrid approach. You might lead with “Starting at $X/month for our basic plan” but then clearly detail that pricing scales based on the number of users or usage metrics. This way, you capture interest with a competitive entry point while preparing customers for additional costs that align with the full value your product delivers.
- Test both messaging options if possible. Often, market feedback can help confirm which method resonates best with your audience.
In sum, Price to Scale recommends aligning your pricing display with both customer expectations and your product’s inherent value delivery. The purpose is to attract interest without misrepresenting the true cost for most teams.