Pricing Mistakes That Cost Us (And What We Learned)

We priced the BGV module wrong at launch. Not "a little off"—so wrong that adoption was 60% below projections for the first quarter.

Pricing feels like a business decision. It is. But it's also a product decision—and treating it as an afterthought cost us.

The mistake

We priced our BGV module per-employee-per-month, matching Keka's core HRMS pricing. Made sense on a spreadsheet.

Reality: BGV isn't used for every employee. It's used intensively during hiring waves, then barely at all. Customers paid the same during slow periods, felt ripped off, and usage (and advocacy) dropped.

What we learned

Pricing should align with value delivery: Users experienced value when they verified candidates, not when they had employees. Per-verification pricing would have matched their mental model of "I pay when I get value."

Understand customer psychology, not just economics: Customers weren't doing ROI calculations. They were asking "does this feel fair?" Per-employee pricing during zero-verification months didn't feel fair.

Test pricing like you test features: We would never ship a feature without user testing. We shipped pricing without testing. We should have run the pricing model with 3-5 customers before launch.

Simplicity ≠ best: Our CEO wanted "simple pricing customers can understand." But simple for us (per-employee) wasn't intuitive for customers. They wanted to understand, not just be told.

The fix

We moved to hybrid pricing: lower base rate plus per-verification fees above a threshold. This: - Reduced barrier to adoption (lower base = easier yes) - Aligned cost with value (more verifications = more payment = more value received) - Created upsell opportunity (heavy users upgraded tiers)

Adoption recovered within 2 quarters. Lesson learned.

For PMs: You probably don't own pricing. But you can influence it. Bring user insight into pricing discussions. Ask: "Does this feel fair to customers?" That question should matter as much as margin calculations.