Skylight · B2C · digital family calendars and frames
Keep old customers on the old price, and honor it for anyone who asks
Gave up an estimated couple million dollars for goodwill; no measured effect
What they did
What happened
In their words
How Skylight Balances Growth and Profit for Sustainable Success – Michael Segal & Mark Ungerer, Skylight
David BarnardOne tactical question. Did you announce the price raise before you raised a price? And was that a nice bump in subscription attach?
Mark UngererWe did not announce it and we did not apply it to our existing customer base. They were grandfathered in through what we now call Legacy Plus, that has access to the frame and calendar. So, it really just showed up as the new price for new customers. And we had a policy that said if you were on the fence, because remember we talked about people are thinking about it for a while. We didn't want anyone to feel miffed. I thought it was 39. I've been thinking about it for five months and I just missed the boat. If they reached out to us, we honored the old price effectively and definitely.
Mark UngererIf anybody's listening today and just bought the Skylight and is like, I want that January last year price, email us and we'll honor it. I mean that's one of the benefits of us being in an early growth stage and the lesson here is be really nice to the existing customers. Build for the next 10 million customers and don't try to squeeze every penny out. We certainly could've figured out a way to do that. And we had the math on, yeah, it's worth a …
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More from this episode
- Raise the yearly plan from $39 to $79, not the $99 tests favoredMinimal loss of subscribers or retention; ARR curve 'transformative'; no exact numbers
- Send the device's QR code to an Apple in-app purchase instead of a web checkoutOver 100% more conversions, on a small slice of users
- Knock money off the device when people buy it with the subscriptionMuch higher subscription attach on the own website than on Amazon or in stores; no numbers
- Test a free trial, with and without asking for a credit cardNo extra subscribers; trial takers were people who'd have subscribed anyway
- Make every first purchase cover what you paid to get the customerEvery order in company history paid back on day zero; grew without VC money
- Borrow from risk-tolerant lenders at 15-20% to buy holiday inventory, not raise VCStayed bootstrapped and profitable; paid 15-20% a year at times
- Keep what people bought the device for free; charge for new add-ons like meal planningPhotos-on-calendar paywall 'just worked' for years; now some customers want it free
- Don't mark which features are premium once someone has subscribedRenewal rates high even for light users of paid features; no numbers
- Survey customers on whether the product is life-changing, and build to raise that shareAbout 20% say life-changing today; goal is 50%
- Push marketing spend on a new calendar product before the product was goodDidn't work; nearly killed the product; took off only after product fixes in fall 2022
- Sell the device everywhere: your own site, Amazon, Costco and Best BuyCalled very successful; retail acts as a quality stamp, but lowers subscription attach
- Change how you show what's in the subscription bundleRarely moved the share of buyers who subscribe
Tags: grandfathering, price-increase, goodwill