Know thy customer. It’s a principle that guides just about every business in existence. And yet, so many companies rely on anecdotes—rather than actual research—when it comes to knowing their customers. Such is not the case, though, for online video marketing platform, Wistia. “Our platform makes it easy to put videos online, track what's happening with them, improve them, and capture leads with them,” said Wistia co-founder and CEO, Chris Savage. “The person who's a Wistia customer is the person who wants to understand what's actually happening with their videos...who is watching, how they’re watching, what they're watching, what they're skipping.”
To develop a product for that curious of a customer, Wistia has to rely on far more than assumptions. “Customer research is extremely important to us,” said Wistia co-founder and CTO Brendan Schwartz. “Since we started, we've been extremely customer-focused.”
Savage echos that sentiment: “We're constantly doing tests to try to understand better who our customers are and what they care about. Research is critical to how we’ve grown and how we scale.”
Research Takes A Lot Of Time
But that kind of dedication to genuinely knowing the customer—and then acting on their feedback—takes a lot of time. “It's taken us years to figure out how to do this internally, and a ton of effort, and a ton of money, and a ton of people,” said Savage. Ezra Fishman, head of business intelligence at Wistia, added: “It takes real work to identify who's actually your best customer.”
And for all that effort, it wasn’t perfect—especially when the time came to examine Wistia’s pricing. “I think as you're growing as a company, you get in a bubble. You talk to your customers, the people who already know you, the people who have already interacted with you, and have already seen your pricing,” said Savage.
Those people—Wistia’s customers—were already paying, though, and the company wanted to know how its pricing affected prospects and how future customers would receive future products. “We wanted an outside voice. We wanted to hear from people who are using some of our competitor's products or weren't even in the market yet,” explained Savage.
“You can find some customers. You can find some people to pay you money, but who's really the best out of those groups, and who should you be building the business toward,” added Fishman.
Pricing Is A Tricky Thing
“Pricing has been probably the single most difficult thing we faced,” said Fishman.
Initially, Wistia tried to figure out pricing themselves. “There was a time we tried some tests, and we gated a bunch of features thinking that that was going to help us change the distribution of which accounts people were ending up on,” said Savage. “We didn't realize that we had gated some features that were really tiny, but extremely valuable to everyone...it created such a support headache, because it really created a crappy customer experience.” And when pricing is that difficult, explained Fishman “it’s a sign you haven't figured it all that out yet.”
Savage and his team discovered that while they excelled at iterative testing and research from a product standpoint, they lacked experience to effectively alter their pricing strategy. “We were scrappy, trying to figure out everything ourselves,” said Savage. But that wasn’t sustainable, as he quickly learned: “If you don't do the testing properly, if you don't have the right channels to understand what's working, you can definitely get less customers, but you can really hurt the customer experience, too, which is basically the worst case scenario for a pricing test.”
Not wanting to further muck up the customer experience—and fearing they were missing out on “extremely large opportunities”—the Wistia team decided to “take pricing seriously.”
“It's possible to have a very, very crappy model that works, and you don't know that,” said Savage. “If you don't take pricing seriously, you won’t see the fundamental business improvements that might be sitting right in front of you.”
Getting your pricing right is something that can absolutely change your business.
Cue The Efficient, Experienced
While Wistia had tried several tests, the team didn’t feel confident in what they’d accomplished; they didn’t have enough intel to confidently roll out pricing changes. “We had a couple hunches,” added Savage. “We thought that there were some features that we were valuing highly, that maybe people didn't value as highly as we did. There were some other things that we were discounting, that we didn't realize how important they were...but it seemed pretty hard for us to figure out how we could put these hunches into practice.”
So, Wistia decided to partner with Price Intelligently (PI), because they wanted a company that “could do it right and do it well,” said Savage. “We wanted to actually do the market research well. We wanted to actually have a methodology...that we could really learn from and figure out, and trust the data that came out of the other side.”
Schwartz echoed that sentiment: “We chose to work with Price Intelligently, because we wanted someone who had a really smart process, had done it multiple times, and could come in and help us understand from a market perspective how are people reacting to our pricing, and how are they reacting to our features...It's really helpful to work with people who have worked across industries and across different products and really understand how pricing and packaging can affect buying behavior.”
The Research Changed Their Business
PI got to work right away. “We had them go out and find out what other people cared about, what people who weren't using Wistia cared about. They ran market panels and did all these different things that gave us better insight into what our customers cared about,” said Savage.
And the results were surprising: “Before working with Price Intelligently, we didn't used to gate Wistia accounts by the numbers of videos; we just didn't think to do it. What we discovered, after working with them, though, was that actually people saw videos as a value metric. If they had more videos, they thought they'd be willing to pay more,” said Savage.
Thanks to PI’s research and insight, Wistia created a free plan that featured a limited number of videos. “It was a huge impact for us,” said Savage. “By understanding that what our customers cared about was numbers of videos, we were able to get way more customers to sign up from our existing funnel.”
The Result: Happy Customers Paying More
“We doubled the number of new sales coming in by changing our pricing model based off of what Price Intelligently helped us learn,” said Savage.
And while new sales are great, happier customers are even better: “We have more people paying us, and they're happier to pay, because they are paying for something that they value,” said Savage. “They're excited about what they're getting and not complaining.”
“Getting your pricing right is something that can absolutely change your business,” said Schwartz. “It has changed ours.”
In addition to changing their business, PI sparked something in Savage and his team: “We got addicted to PI’s data-driven approach.” Since partnering with PI, Wistia has kept that methodology going: “We have since gone down a path of iterative testing and found many more new ways to improve our pricing...And it’s all thanks to Price Intelligently.”Back to Customer Stories