How Healthy Coin used a lockdown to create an explosion of subscriptions

Disclaimer: Our client has requested to remain anonymous but were willing to share their story. Like they say in the movies, “Ladies and gentlemen: the story you are about to hear is true. Only the names have been changed to protect the individuals. The company name, logo and pictures are fictitious. If you wish to hear more about this story, please schedule a free consultation.

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During the pandemic, three friends from college were all let go within weeks of each other and became founders in the garage. They lived off their savings and committed to build something that would keep them safe regardless of what the world was doing. They captured some early success & sizeable funding. The MVP was well accepted. They now had to decide how they would go to market with it.

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In the software & technology space, one of the key decisions to be made is how you'll price, package & bill your solution.

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There are hundreds of methods and there is no one right answer.

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When we first began working with *********** we suggested a phased methodology to introduce pricing options, tiers, renewals and packages. Here are some of the early versions:

• Annual subscription with upfront billing (ARR = good, Cash = strong, AR = nonexistent, CAC = high, Customers = low, Churn = high)
• Evergreen subscription with monthly billing (ARR = good, Cash = consistent, AR = medium, CAC = mild, Customers = decent, Churn = very high)
• Annual subscription with monthly billing (ARR = good, Cash = not bad, AR = heavy, CAC = low, Customers = high, Churn = low)
• Tiered subscriptions with creative billing frequencies (ARR = strong, Cash = strong, AR = very low, CAC = low, Customers = high, Churn = low/medium)

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After 9 months of interviews, discoveries & research we settled on the optimal pricing & billing solution. (We are not sharing the final version)

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We asked the founders what they would have done had Healthy Coin not intervened. They all said they would be married to annual-upfront or evergreen monthly because that's what the big guys are doing. Based on this company's performance, had they used their own pricing and packaging, we estimate that they would have missed out on $437,000 - $586,000 of net new billings based on customer acceptance.

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"To be candid, hindsight is 20/20, right? So it's easy to say we made the good move in packaging it this way NOW. But, the beauty in it is that we were intentional in how we got there. Appreciate Rob and CJ at Healthy Coin for holding our hands across multiple iterations of making it make sense. Our investors and partners think we're so smart with numbers. Truth be told, we just got kickass CPA's. Now let's gokick 606 in the cahunas"

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Key Takeaway:

Pricing, packaging, and billing solutions for software companies requires an in-depth review and alignment of financial goals, customer expectations & market readiness.

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