2x growth in one move: How we doubled BugBug's growth rate

Maciej Wilczyński

Managing Partner, Founder Valueships

Client

Bugbug.io is a company that makes tools to help test websites automatically. Their platform helps developers and quality assurance (QA) teams make sure websites work correctly.

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Initially, Bugbug.io tried to handle their pricing and look at competitors' prices on their own. They aimed to offer lower prices than their competitors but realized they needed expert help to set their prices right.

Paweł Bylina, the CEO & CTO of Bugbug.io, noticed big improvements in their business after working with the consulting firm and following their advice.

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And the consulting firm was Valueships.

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But, first things first…

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Initially, we tried to handle our pricing and analyze competitors' prices on our own. We aimed to offer lower prices than our competitors, but soon realized we needed expert help to set our prices correctly. After working with the Valueships team and following their advice, I noticed significant improvements in our business. We achieved a doubling of the company’s growth rate, fewer problematic clients from India, and more high-value clients from the USA, which positively impacted our overall client composition. Additionally, our market perception and credibility improved due to realistic pricing, countering the belief that "cheap” means low quality. ‍

Paweł Bylina, CEO & CTO of Bugbug.io

Situation

Bugbug.io faced a problem where their pricing didn't match the value of their services. However, there were many more challenges to overcome:

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Bugbug.io fell in the middle of the pricing range, but it was not fully comparable to competitors due to inconsistencies in value metrics. The team had to increase the sample size to identify a clear pricing corridor – and increase market transparency.

Most companies tried to build their products around project runs, but they also used metrics like retention, users, or parallel tests. At that time, test runs seemed to be the most usage-based metric, causing confusion and unclear value metric consensus.

Many tools attempted to differentiate their pricing but often created user tiers that were not aligned with specific personas or actual use cases. This misalignment highlighted the need for more targeted and clear packaging of services for BugBug.

Interviews revealed that people struggled with understanding the value proposition of Bugbug.io. They faced two main challenges: how the platform supported a CI/CD approach and the claim of saving 70% of time. Day-to-day experts found it hard to believe these claims.

At first glance, competitors appeared to be more advanced and sophisticated technologically. They offered more advanced exporting functionalities, and respondents mentioned concerns about vendor lock-in.
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They tried to beat competitors by offering lower prices, but this didn't help their business grow and brought in low-value clients. They needed to change their pricing model to better show the true value of their services and attract more valuable clients.
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At first, they didn’t implement our advice – but later realized its importance and decided to fully engage in a project with us to fix their pricing strategy.

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Goal

The main goals were to:

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Increase the money made from each user (ARPU).

Show the true value of Bugbug.io's services.

Attract high-value clients and reduce low-value, problematic ones.

Create a sustainable pricing model for long-term growth.

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Approach

The project began with a comprehensive Pricing and Competitor Analysis. The first step involved comparing Bugbug.io's pricing structure with that of their competitors to identify gaps and opportunities.

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The team analyzed how competitors priced their services and what features were included at different price points. With that analysis, we were able to understand the market landscape and position Bugbug.io's services effectively.

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Following the pricing analysis, the team conducted User Interviews. We spoke with eight potential users, including QA testers and platform owners, to gather insights into what these users value most in a testing platform.

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The interviews provided a deeper understanding of the customers' needs, expectations, and willingness to pay for specific features. The new pricing strategy was shaped largely by the insights from these interviews.

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The team then moved on to Consultations and Problem-Solving. Detailed discussions were held with Bugbug.io's management to address specific business challenges and develop customized solutions.

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These consultations focused on aligning the pricing strategy with the company’s overall business goals and ensuring it addressed the issues faced by the company, such as attracting high-value clients and reducing the number of low-value, problematic ones.

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Next, the team conducted Pricing Pages Teardowns. During the review, we meticulously looked at Bugbug.io's pricing pages to determine where improvements could be made. The goal was to make the pricing structure more transparent and clearly communicate the value of different service levels. In order to justify the new pricing, the pricing pages were redesigned to highlight key features and benefits.

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The final step was the Value and Pricing Calculation. The team calculated the true value of Bugbug.io’s services by considering factors such as the quality of the platform, customer satisfaction, and market demand.

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The analysis above comes with four conclusions:

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Unseen value gap. There is a significant portion of the actual value created by Bugbug.io that remained unseen by customers. According to this gap, customers are not being fully informed about the product's value – which affects their perception.

Value erosion was real. Between the perceived value and the willingness-to-pay, there is a noticeable erosion in value. This suggests that even when customers recognize some value, the communicated benefits might not be compelling enough to justify higher prices, leading to lower willingness-to-pay.

Price setting wasn’t ideal. There is a failure in setting the target price appropriately, which resulted in a lower realized price. Pricing strategies had to align more closely with customers' willingness-to-pay in order to avoid this failure.

Impact of transactional discounting. The realized price is further reduced due to transactional discounting. Such a practice undermines the potential revenue and indicates a need for stricter discounting policies to ensure the company captures more of the created value.

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Prices were then adjusted to match market expectations and perceived value. By doing this, Bugbug.io's pricing remained competitive while accurately reflecting its value.

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Throughout the process, the team used a combination of data analysis, customer feedback, and strategic thinking to develop a pricing model that supported Bugbug.io’s growth objectives.

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The result was a well-rounded pricing strategy that not only increased the average revenue per user (ARPU) but also enhanced the company's market position and credibility.

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Results

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The new pricing strategy brought notable improvements:

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The company’s growth rate doubled.

Fewer problematic clients from India and more high-value clients from the USA – impacting overall client composition.

Better market perception and credibility due to realistic pricing, countering the belief that "cheap means low quality."

Despite doubling subscription prices, only 10% of clients left, and January 2024 saw a record increase in new customers.

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Testimonial

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Paweł Bylina, CEO & CTO of Bugbug.io, shared his satisfaction with the results, saying that the project had a big positive impact on their business and proved the importance of expert pricing strategies.

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The recommendation from Paweł Bylina comes from a video by Bogusz Pękalski on his channel Startup My Way. Click here to watch the full episode.

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In his feedback, he highlighted the success of the collaboration in achieving substantial growth for the company.

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Conclusion

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The Bugbug.io case study shows how expert pricing strategies can lead to business success. Bugbug.io transformed their approach after carefully studying market conditions, speaking with potential clients, and adjusting pricing models.

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‍And we are extremely pleased to play a role in catalyzing that process here at Valueships.

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