Price and package a product

Inkwell pricing and packaging proposal

To: Priya Nair | Decision: segmented pricing, not $19 for everyone

Recommendation

Launch three feature-based plans for new customers in January. Keep the freelancer entry price at $15; charge more for agency collaboration and integration. Move existing agency customers gradually, preserving their current functionality.

A blanket $19 increase produces 26.7% more revenue only if paid seats remain unchanged. Losing 21.1% of paid seats would erase that uplift. It also raises prices for our most fragile segment while leaving agency willingness to pay underused.

What the evidence says

• Revenue is concentrated in agencies. The random sample contains 80 freelancers, 50 small agencies and 20 larger agencies. Its 787 seats generate $11,805 MRR; agencies contribute 89.8% of MRR, despite representing only 46.7% of accounts.
• Freelancer acquisition and retention are weak. Trial conversion is 9%, versus 31% for small agencies and 36.7% for larger agencies. Second-month cancellation is 38%, 6% and 0%, respectively. The last figure comes from only 22 conversions.
• Price tolerance differs substantially. Survey “getting expensive” thresholds range from $12–20 for freelancers, $26–42 for small agencies and $42–67 for larger agencies. These are stated preferences, not proven demand curves; one larger-agency response has inconsistent thresholds.
• Value and usage differ. Freelancers sent 3–12 proposals over 90 days, versus 18–63 for small agencies and 95–287 for larger agencies. Agency usage emphasizes the shared library, approvals and CRM sync; freelancers mostly use one template and e-signature.
• Cheap substitutes matter. All 12 freelancer losses went to Google Docs plus free e-signature; four explicitly cited price. Agency losses went to PandaDoc, without recorded price objections. That does not establish why they lost—or prove agencies will accept any increase.

Proposed plans

Prices are USD, billed monthly. Retain the 14-day trial. Defer annual discounts until monthly pricing is validated.

Team and Business have no minimum seat commitment or segment-based eligibility. A two-person agency can buy Business; a larger agency can buy Team. Charge for users who create, edit or approve proposals—not external recipients signing them.

Do not introduce proposal limits, signature fees or charges tied to contract value. They would discourage the activity that demonstrates value. Signed contract value is context, not revenue attributable to Inkwell.

These prices are testable starting points, not survey-derived optima. Business’s incremental value must justify its premium; validate CRM demand before treating larger agencies as automatic Business buyers.

Moving existing customers

1. Give at least 90 days’ notice, stating the customer’s current bill, transition bill, eventual price and effective dates. If notice cannot be delivered in time, January is new-customer launch only.
2. Existing freelancers remain at $15. Preserve all functionality already included; offer Team or Business upgrades voluntarily.
3. Existing agencies move first to $19/user, at the first eligible renewal after notice, for six months. Then move to Team at $29, or Business at $39 if affirmatively selected.
4. Preserve existing feature entitlements, including CRM sync, on migrated Team accounts. Do not remove functionality to manufacture an upgrade. Business packaging applies cleanly to new accounts; legacy exceptions are explicit.
5. Honor contractual commitments. Offer cancellation and data export before increases, plus a documented, time-limited hardship extension. Avoid permanent discretionary discounts.

Revenue expectations and validation

At unchanged seats, the sample would generate:

• Blanket $19: $14,953 MRR, +26.7%.
• Agency transition at $19; freelancers unchanged: $14,633, +24.0%.
• All agency seats eventually on Team: $21,703, +83.8%.
• Small agencies on Team; larger agencies on Business: $26,133, +121.4%.

The last two are allocation scenarios, not forecasts: feature needs, downgrades, seat reductions and churn are unknown. Do not multiply sample totals into company revenue without the full account count and portfolio validation.

Before announcing final prices, interview customers across segments and test the proposed packages against today’s offer with new trials. Track conversion, second-month retention, revenue per trial, paid-seat contraction and support complaints by segment. Use a staged existing-customer rollout with a comparable holdout; pause expansion if incremental revenue after churn and seat contraction is non-positive.

CEO message: “We’re keeping an accessible solo plan and introducing agency plans priced around collaboration and integration—with advance notice and a gradual transition for existing customers.”

Inkwell pricing proposal

Recommendation: Don't move everyone to $19. Move to three plans priced by segment: hold freelancers at $15, raise small agencies modestly, and raise agencies substantially. Priya's $19 is right for only one of the three segments.

What the data says

• Revenue is concentrated in agencies. In the sample, 20 agencies (13% of accounts) are 56% of MRR ($6,645 of $11,805). The 80 freelancers (53% of accounts) are 10%.
• Agencies are underpriced. $15 sits below their "bargain" point (median about $24). Their "getting expensive" threshold starts at $42, with a median of about $51. They signed $27.4M in 90 days against roughly $20k in fees, so the fee is under 0.1% of the value they close. No agency deal had a price objection, and agency month-2 churn is 0%. They use the shared library, approvals and CRM sync, which are features worth charging for.
• Freelancers are already at their limit. Their median "getting expensive" is about $15, today's price, and nearly all of them hit that threshold by $19. Trial-to-paid is 9% (171 of 1,900), and 38% cancel in month two. Of 160 deals, 12 freelancer deals were lost to free tools, 4 of them citing price. Five of the six price objections in the file came from freelancers. They use one template and e-signature, which free tools approximate.
• Small agencies have headroom. Their "getting expensive" starts at $26, trial-to-paid is 31%, and month-2 churn is 6%. Their losses went to PandaDoc, and none cited price.

Plans

All three price points sit below the lowest "getting expensive" answer in their segment: Team $22 against a $26 minimum, Business $39 against $42. Solo is capped at one user, and adding a second user moves the account to Team.

Revenue (sample MRR, before churn)

The arithmetic behind Priya's 27% is right, but it assumes zero churn and no effect on new sign-ups. Under this plan, agencies could lose 48% of seats at the $29 rate and we'd still match today's revenue from them. At $39 they could lose 61%. Freelancers, the segment most likely to leave, are only 10% of MRR, so holding them at $15 costs little and protects the top of a funnel that is already weak.

Moving existing customers

1. By late October: pull per-account feature usage and check contract and notice terms. I don't have usage data by feature for small agencies. If many use approvals or CRM sync, they'd see the move to Team as a feature loss. Any account actively using those features gets the Business transition rate of $29 rather than a downgrade.
2. Notice: at least 60 days before January 1, in plain language, with a named account owner for agencies with 10 or more seats. If we can't give that notice, existing customers move in February. New-customer pricing can still start January 1.
3. Transition rates: a "founding customer" rate one step below list for 12 months, then a second notice. This avoids a +160% overnight jump for agencies, who are our most valuable and most notice-sensitive accounts.
4. Freelancers: nothing changes in price. The separate problem is 9% trial conversion and 38% month-2 churn. I'd test annual billing at about $12/month-equivalent and better onboarding to the first signed document.

Guardrails

Review at 30, 60 and 90 days. I'd pause or revisit if any of these happen:

• Agency cancellations exceed 10% of agency accounts in the first 90 days.
• Business trial-to-paid falls well below today's 37% (22 of 60).
• Team trial-to-paid falls well below 31%.
• Solo conversion drops, which would point to side effects of the new packaging.

Caveats

• Survey answers are stated preferences and typically overstate what people will pay. Agency evidence is thin, with 20 sample accounts, about 20 survey respondents and 60 trials a quarter.
• The sample is 150 accounts, so scale the dollar figures to the full base before quoting them externally.
• The 14-day trial and free-tool competition for freelancers mean Solo should stay simple.
• To de-risk Business, launch $39 to new agencies on January 1. That gives us two months of real conversion data before existing agencies step up.

Pricing and packaging proposal

Recommendation: Don't move everyone to $19. Price by segment, and keep freelancers at $15. A single $19 price fits none of the segments well. It is too high for freelancers, who are already churning and losing to free tools, and far too low for agencies, who will pay more and use the most features.

What the data says

• Freelancers are most of our accounts but little of our revenue. They are 81 of the 150 sampled accounts but only $1,215 of $11,670 MRR (10%). A move to $19 adds about $324 MRR here. Meanwhile 38% of paying freelancers cancel in their second month, and 12 of 18 lost deals went to Google Docs and a free e-signature tool. In the survey, freelancers' median "getting expensive" price is about $15, and roughly one in six put it at $19 or higher. $19 puts them in the zone where they start shopping.
• Small agencies (2–10) can absorb more. Their second-month cancellation is 6% and trial conversion is 31%. Their median "getting expensive" price is about $37, and "too expensive" is about $50. $19 leaves most of that headroom unused.
• Agencies (11–50) are the most underpriced at $19. They show 0% second-month cancellation and 37% trial conversion. Their median "getting expensive" price is about $55, and "too expensive" is about $80. They use the features that justify a higher price: shared content library, approval workflows, and CRM sync.
• Price is a smaller loss driver than it looks. Only 4 of 12 lost freelancer deals raised a price objection. None of the 6 lost small-agency deals went to a free tool. Losses are mostly about competitors and "no decision," not price alone.

Proposed plans

Every plan keeps the 14-day free trial.

Existing customers

• Solo (freelancers): No change, no migration, no notice needed.
• Team: 60 days' written notice. Move to $20 at the January renewal, then $25 at the first renewal after July.
• Business: 60 days' notice. Move to $24 at the January renewal, then $32 at the first renewal after July.
• New customers: List prices from January.

The two-step migration caps the first-year increase at about 33% for Team and 60% for Business. Anyone who objects gets a conversation with sales before renewal, not an automatic downgrade.

Revenue (150-account sample: 778 seats, $11,670 MRR)

The 27% is simply $19 ÷ $15. It assumes no churn and no change in mix. The proposal's gain comes mostly from agencies, not freelancers.

Risks and what to validate first

1. Survey data is stated preference. Willingness-to-pay surveys usually overstate what people will actually pay. The Team and Business numbers are plausible but unproven.
2. The sample is small. It is 150 accounts, and the file doesn't show annual versus monthly billing, so I can't tell how many renewals each price change will hit.
3. Business vs. Team gap. The gap is only $7. If Business customers mostly use shared library and approvals and rarely CRM sync, they may trade down.
4. Freelancer conversion. If Solo stays at $15, the funnel is protected, but we give up the small freelancer upside. I'd accept that trade.

Before the January announcement: run a four-to-six-week test on new small-agency and agency trials at the Team and Business prices. Track trial conversion, second-month cancellation, and win rate against PandaDoc. If the test holds, announce the tiered plans. If conversion drops sharply, adjust Team first, since it has the most accounts.

Decision needed from Priya: approve tiered pricing in place of the flat $19, and approve the 4–6 week test on new trials.