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.

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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.

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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.

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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.

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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 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.