How PowToon Optimized Its Pricing Page To Increase Revenue
PowToon is a cloud-based animation software company based out of London. Launched in 2012, PowToon has over 12 million users worldwide from various business verticals who use the tool to create fun and engaging explainer videos.
For any SaaS firm, the pricing page is closest to the funnel. So it makes sense to optimize it for maximum impact on the bottom line. Like most SaaS businesses, PowToon’s pricing model is based on different feature offerings. These include watermark removal, privacy control, quality, and export options, among others. A relatively new entrant to these capabilities is storage.
Powtoon offers three plans:
- A free plan that offers 100 Mb storage.
- A $19 monthly pro plan that offers 2Gb storage.
- A $59 monthly business plan that offers unlimited storage.
This is how PowToon’s pricing page originally looked:
Dan Rimon, director of product at PowToon, decided to test out different pricing levers. The hypothesis was that the ‘unlimited storage’ feature offered under the business plan was an unquantifiable and vague commodity, whose true value could not be perceived by prospective buyers.
“We didn’t know exactly how our target audience would perceive the ‘storage’ capability. Both our business plans (unlimited and 2 Gb) offer practically unlimited storage. The fact that we were not able to crunch the feature in real numbers (unlimited) may have been leading to the wrong perceived value,” said Dan.
The idea was to test different storage values for the Pro and Business plans. Dan tested three versions against the original:
- 10 Gb storage in Business Plan and 10 Gb storage in Pro Plan
- 2 Gb storage in Business Plan and 2 Gb storage in Pro Plan
- 10 Gb storage in Business Plan and 2 Gb storage in Pro Plan
Just to remind the readers, the original version offered Unlimited versus 2 Gb storage for the Pro and Business plans, respectively.
The third version with 10-Gb storage for the business plan versus 2-Gb storage for the pro plan turned out to be the winner. It increased the revenue by 27.9%. Here’s the winning version:
Dan attributes the results to a clear distinction between the value perceived in the case of the 10 Gb versus 2 Gb version.
“We attribute the results of the test to our users’ abilities to really understand the value they were getting. Users responded better to a real number (10 Gb) than ‘unlimited’, which frankly sounds lovely but is hard to quantify,” Dan added.
PowToon has taken the route to continuous testing to optimize its pricing page. Their product team runs a test every two weeks and shares the results and learnings internally, regardless of an inconclusive test. They next tested the way their monthly and annual pricing plans were displayed to find out whether it psychologically impacted the way visitors chose a particular plan. Though the original version outperformed the variation in this case, they nevertheless made this cool video to share the results internally.