Price and package a product

To: Priya Nair, CEO From: PM, Pricing Subject: January Pricing & Packaging Proposal: Tiered Plans vs. Flat $19 Increase

Executive Summary

Moving to a flat $19/user/month will hurt our freelancer acquisition while leaving massive agency revenue on the table. Instead of a flat increase, we should launch a three-tier packaging model ($12 / $29 / $49) gated by team size and agency workflows. By aligning price with value, we can increase MRR across our existing base by ~96% (vs. <27% under the $19 plan) while improving top-of-funnel conversion.

---

Why a Flat $19/Seat Doesn't Fit Our Data

1. Agencies drive 90% of our revenue and are severely underpriced. In our 150-account sample ($11,835 total MRR): * Freelancers are 54% of accounts (81) but only 10.3% of MRR ($1,215). They send ~8 proposals/quarter (~$5.6k signed value) and stay on average 5 months. * Small Agencies (2–10 seats) are 33% of accounts (49) and 35.4% of MRR ($4,185), averaging $129k in signed value/quarter and 17.5 months tenure. * Mid-sized Agencies (11–50 seats) are 13% of accounts (20) but 54.4% of MRR ($6,435), averaging $1.4M in signed value/quarter and 16.5 months tenure.

2. $19 breaks Freelancer willingness to pay (WTP), but is a giveaway to Agencies. * Freelancers: Our Van Westendorp survey shows $15 is already the median "getting expensive" threshold for freelancers. At $19, 83% of freelancers view Inkwell as getting expensive, and 15% consider it "too expensive" to buy. Furthermore, Q3 funnel data shows freelancers convert at just 9% and 38% churn in month 2. When we lose them, it’s to "Google Docs + free e-signature"—and 80% of all price objections in our win/loss data come from freelancers. * Small Agencies: Median "bargain" is $15; "getting expensive" is $32; "too expensive" is $50. * Agencies (11–50): Median "too cheap to trust" is $12 (and $14–$15 for a third of respondents!). At $15, we look dangerously cheap to larger teams. Their median "bargain" is $25, and "getting expensive" is $51. We only lose agencies to PandaDoc—with zero price objections.

3. Feature usage naturally separates segments. Freelancers only use 1 template and e-signatures. Agencies rely heavily on the shared content library, approval workflows, and CRM sync.

---

Proposed Pricing & Packaging

We should replace the single $15 plan with a Free Trial + Freemium/Low-Floor entry for freelancers, and two value-priced tiers for agencies:

Note: All paid tiers retain the 14-day free trial.

---

Why This Works

• Fixes the Freelancer Funnel (Free & Solo at $12): Lowering the solo price to $12 (below the $15 "getting expensive" mark) reduces month-2 churn. The Free tier (1 template, 2 proposals/mo) captures the 91% of trialists who don't convert and neutralizes the "Google Docs + free e-sig" threat, keeping low-volume freelancers in our ecosystem until their deal flow picks up.
• Captures Agency Value ($29 and $49): $29/user for Small Agencies sits safely below their $32 "getting expensive" threshold while nearly doubling ARPU. $49/user for 11–50 Agencies sits below their $51 threshold, eliminates the "too cheap to trust" signal, and funds enterprise-grade features to beat PandaDoc.

---

Existing Customer Migration Plan

1. January 1: Launch new pricing for all new signups. 2. Freelancers (1 seat): Automatically move existing $15/mo freelancers to the $12/mo Solo plan in January. Framing a pricing update as a price cut for our largest user group by headcount will generate massive goodwill and social proof, while only costing $243/mo across the sample (2% of MRR). 3. Agencies (2+ seats) — 90-Day Grandfathering + Annual Lock-In: * Give existing agencies 90 days' notice (effective April 1) before migrating them to Team ($29) or Agency ($49) based on their seat count and feature usage (e.g., accounts using approval workflows move to Agency). * The "Loyalty Bridge": Offer existing agencies the ability to lock in a legacy annual rate ($19/user/mo for Team, $29/user/mo for Agency) for 12 months if they switch to annual billing before March 31. This minimizes churn, pulls cash forward, and still beats your $19 target.

Revenue Impact (on the 150-account sample)

• Current MRR: $11,835
• Priya’s $19 Flat Plan: $14,991 (+27% before heavy freelancer churn; likely ~18–20% net).
• Proposed Tiered Model (at list price): $23,190 (+96% MRR)—broken down into $972 from Freelancers, $8,091 from Small Agencies, and $14,127 from 11–50 Agencies. Even with 50% of agencies taking the discounted annual Loyalty Bridge in Year 1, net ARR grows by >60% with near-zero logo churn.

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 and packaging proposal

To: Priya Nair | Proposed launch: January 2027

Recommendation

Do not move everyone to $19. Keep a $15 solo offer and introduce a $25/user agency plan. Launch for new customers in January, subject to validation; migrate existing agencies gradually.

Your 27% calculation is correct only with unchanged paid seats. At $19, losing 21.1% of seats eliminates the uplift. The evidence supports differentiated pricing—not equal increases for customers with very different needs.

What the evidence says

• Agencies drive revenue. The random account sample contains 80 freelancers, 50 small agencies and 20 larger agencies. Agencies represent 47% of accounts but 90% of sample MRR: $10,605 of $11,805.
• Freelancer acquisition already struggles. Trial conversion is 9%, versus 31% for small agencies and 37% for larger agencies. Second-month cancellation is 38%, 6% and 0%, respectively. The last figure covers only 22 paying accounts, so is not evidence of zero underlying churn.
• Price tolerance differs. Median surveyed “getting expensive” prices are $15 for freelancers, $31 for small agencies and $51 for larger agencies. These are directional signals, not measured purchase probabilities or optimal prices.
• Price is not the only problem. Only 6 of 160 recorded deals show a price objection. Freelancer losses go to Google Docs plus free e-signature; agency losses go to PandaDoc. Sales records may underrepresent self-serve price sensitivity.
• Workflows justify packaging. Freelancers mainly use one template and e-signature; agencies use the shared content library, approval workflows and CRM sync. Sample quarterly sending ranges also differ: 3–12 proposals for freelancers, 18–63 for small agencies and 95–287 for larger agencies.

Proposed plans

USD, monthly billing; retain the 14-day trial.

No proposal-volume caps or signature fees at launch. Charge for internal users; recipients/signers are free. One plan applies across an account.

Keep seats as the billing metric: it is familiar and the survey tested per-user prices. Differentiate through collaboration capabilities rather than taxing successful contracts. Signed contract value indicates customer value but is neither collected revenue nor value attributable solely to Inkwell.

Do not launch a third tier yet. Larger agencies show more price headroom, but the files do not establish a distinct premium feature bundle. Validate that opportunity separately rather than inventing enterprise functionality.

Keeping Solo at $15 avoids worsening a fragile funnel; cutting its price is also unsupported. Test activation improvements before assuming price causes freelancer churn.

Revenue implications

Illustrative repricing of the sample, not a company forecast:

These scenarios assume all sampled agency accounts use Team, freelancers remain, and no other changes. Actual revenue depends on cancellations, seat reductions and plan selection. The final uplift arrives after migration, not in January. Without cost data, this is not a profit forecast.

Existing-customer migration

1. Give at least 60 days’ notice, with each account’s current bill, transition bill, final bill and dates. If that notice cannot precede January, delay existing-account changes.
2. Existing freelancers stay at $15, retaining currently included capabilities as legacy entitlements. New Solo customers receive the published bundle. Do not remove capabilities customers already rely on.
3. Existing agencies move to $19/user at their first eligible renewal, then $25 after six months. Honour any contractual commitments and communicate both steps upfront. Preserve all existing functionality.
4. Provide account-level outreach for larger agencies and a seat-review tool before renewal. Never interrupt in-flight proposals, signatures or access to signed documents.

Validate before broad rollout

Before January, test $25 Team against the current $15 offer in segment-stratified new-trial cohorts. Measure 60-day retained revenue per trial, conversion, cancellations and seats—not initial conversion alone.

Require higher retained revenue per trial and no more than a proposed three-percentage-point deterioration in agency second-month cancellation before expanding. Extend testing if samples are inconclusive.

Stagger existing-account migration with a temporary unchanged-price comparison group. Monitor retained revenue and seat contraction through both price steps; pause the next cohort if revenue underperforms the comparison group. January should be a controlled launch, not an irreversible announcement.