We've shied away from displaying $$ signs on our front page, as the Weebly service is very much free -- we don't want to create a perception on the user's part that they have to pay to use the service.
On the other hand, most users run into our "upgrade" form organically, when they try to use a Pro feature, and are offered the ability to upgrade -- this is a very logical point for the user, when there is already some form of demand.
(1,000,000 users) x ("well over 1% conversion", we'll call it 4% to be generous) = 40,000 customers x $4 = $160,000 in revenue.
They have 6 people in the team, so allowing modest salary of $50,000 each = $300,000.
So, they must make the bulk of thier money by Adwords (11,000,000 uniques will generate $$$) as I assume the others services offered are not generating much cash yet.
Anyway, it is still a good and sustainable model and well done to them for turning a profit, something so many big(ger) name startups have yet to do.
EDIT: $160,000 x 12 months = $1,920,000. Also, allowing conversion rate of 2% rather than generous 4% = $960,000.
No idea regarding the accuracy of your calculations, but when you're talking conversion rates for a million users, 1.5% or 2% or heck, 1.1%, could be considered "well over" 1%.
Many of these issues are covered in basic marketing 101. As to how the pricing scheme is deceptive is beyond me.
There are multiple different psychological price theories in use. As mentioned in the article, the .99 pricing scheme is fairly prevalent, although some retailers use a .00 pricing scheme to reinforce quality. Walmart has used a somewhat random pricing scheme (.32, .67, .18, etc) to try to have consumers come to the conclusion that the only rationale behind the price is that Walmart shaved every possible penny it could.
Thanks for sharing. The random pricing scheme reads most evil of all. Perhaps a conclusion is that there is no such thing as a naked price--all pricing schemes have psychological load, whether intended or not, because the consumer will add it.
Sorry, I'm still not following (I could very easily be missing something so I apologize if this is the case). As long as the buyer isn't being forced to buy, how can variable prices be evil?
FYI, its 3.99 a month.