Recommended Pricing Strategy: Maximize Revenue & Market Penetration
For Internal Use: Recommended pricing tiers, positioning, and evolution strategy for Years 1-5.
Executive Recommendation
Three-Tier Model with Professional Tier as Default
- AI Essentials: R800/student (market entry, volume play)
- AI Professional: R1,200/student ⭐ DEFAULT RECOMMENDATION
- AI Enterprise: R2,500/student (raised from R1,800)
Rationale: Professional tier = best revenue per effort, highest gross margin, strongest ROI story.
Recommended Year 1 Pricing (Current)
Tier 1: AI Essentials - R800/student/semester
Target: Budget-conscious schools (50-200 students) Goal: Volume, market entry, Zeraki price parity
Features:
- 5 core AI features (report cards, essay grading, tutor, lesson planner, risk detection)
- Basic platform (student records, grades, attendance, fees, parent portal)
- Up to 200 students
- Email support (24-hour response)
Positioning: "Same price as Zeraki, but with AI"
Revenue Target: 30% of schools, 20% of revenue
Tier 2: AI Professional - R1,200/student/semester ⭐ DEFAULT
Target: Progressive private schools (200-500 students) Goal: Revenue optimization, best margins
Features:
- ALL 15+ AI features
- Advanced analytics
- Mobile apps (iOS + Android)
- SMS credits (500/month included)
- Priority support (4-hour response)
- Up to 1,000 students
Positioning: "Complete AI transformation for R360K (300 students) = R226K saved"
Revenue Target: 55% of schools, 65% of revenue
Tier 3: AI Enterprise - R2,500/student/semester (RAISED)
Target: Large schools/districts (500+ students) Goal: Premium positioning, high value per deal
Features:
- Everything in Professional
- Custom AI models (trained on school data)
- White-labeling
- API access
- Dedicated account manager
- SLA (99.9% uptime)
- Unlimited students/storage
Positioning: "Category leadership + custom AI"
Revenue Target: 15% of schools, 15% of revenue
Price Change: Raised from R1,800 → R2,500 (39% increase) Rationale: Enterprise buyers are value-driven, not price-sensitive. R2,500 = premium positioning.
Recommended Year 2-3 Pricing Evolution
Year 2 (After 100+ Schools Signed)
Essentials: R800 → R1,000 (+25%)
- Rationale: Proven ROI, can raise entry price
- Grandfather first 100 schools at R800 forever
Professional: R1,200 → R1,500 (+25%)
- Rationale: Standard tier should be R1,500, discount to R1,200 for early adopters
Enterprise: R2,500 → R3,000 (+20%)
- Rationale: Custom AI justifies premium
New Customer Default: Professional at R1,500 Early Adopter Benefit: Locked at R1,200 (R300/student savings = R90K/semester for 300 students)
Year 3 (After Market Leadership Established)
Essentials: R1,000 → R1,200 (+20%) Professional: R1,500 → R1,800 (+20%) Enterprise: R3,000 → R3,500 (+17%)
Reasoning: By Year 3:
- 200-500 schools locked in (social proof)
- Case studies proving R226K+ savings (ROI validated)
- Competitors launching AI (market expectation for AI pricing increases)
Pricing Psychology Tactics
Anchoring: Show Impossibly Expensive Alternative
Frame:
Option A: Hire 2 admin staff to handle workload
Cost: R15,000/month × 2 × 12 months = R360,000/year
Option B: YeboLearn AI Professional for 300 students
Cost: R1,200/student × 300 × 2 semesters = R720,000/year
Savings: R360K + better accuracy + no HR headachesMessage: "We're CHEAPER than hiring, better than manual labor"
Decoy Pricing: Make Professional Look Like Best Deal
Present Options This Way:
| Tier | Price (300 students) | AI Features | Value |
|---|---|---|---|
| Essentials | R240K/semester | 5 features | Good |
| Professional ⭐ | R360K/semester | 15+ features | Best Value |
| Enterprise | R750K/semester | 15+ custom | Premium |
Psychology: Professional looks like "smart choice" between cheap/expensive.
Loss Aversion: Early Adopter FOMO
Messaging: "First 100 schools: R1,200 locked in FOREVER After 100 schools: R1,800 standard pricing Slots remaining: 37
Locking in now saves you R600/student/semester = R180K/year for 300 students
Waiting costs you R900K over 5 years."
Discount Strategy (What to Offer, When)
Annual Prepay Discount: 15-20% OFF
Offer: Pay full year upfront = 15-20% discount Example: R360K/semester × 2 = R720K/year Discount: R720K - 15% = R612K/year (R108K savings)
Why:
- Improves cash flow (get R612K upfront vs R360K/semester)
- Reduces churn risk (locked in for 12 months)
- Motivates larger commitments
When to Offer: Close of deal, after demo
Volume Discount (Large Schools): Up to 25% OFF
Schools 500+: 10% off Schools 1,000+: 15% off Schools 2,000+: 20% off Districts (multi-campus): Up to 25% off
Example:
- 1,000 students × R1,200 = R1.2M/semester
- 15% discount = R1.02M/semester (R180K savings)
Why: Enterprise deals require negotiation room
Referral Discount: R50K Credit
Offer: Refer another school → R50K credit on next invoice
Example:
- School A refers School B (300 students)
- School B signs at R360K/semester
- School A gets R50K credit (14% discount on next semester)
Why: Word-of-mouth growth, incentivize evangelism
Non-Profit/NGO Discount: 30% OFF (Selective)
Eligibility: Registered non-profits, mission-driven schools Discount: 30% off (R1,200 → R840/student)
Why:
- Social impact positioning
- Case studies from low-resource schools
- Government partnership pathway (prove value in public schools)
Limit: <10% of customers (don't devalue brand)
What NOT to Discount
Never Discount These:
1. First Deal at a School
- Set precedent (if you discount 30% now, they'll expect 30% forever)
- Exception: Early adopter pricing (locked at R1,200 vs R1,800 later)
2. Professional Tier for Mid-Market Schools
- These schools have budget, don't need discount
- ROI justifies R1,200 (saves R226K)
3. AI Features
- "AI costs more, AI saves more" (don't discount the differentiation)
4. Competitor Match Requests
- "Zeraki is R800 but has 0 AI. We're R1,200 with 15+ AI. Not comparable."
Pricing Objection Responses (Recommended Scripts)
"That's too expensive"
Response: "I understand R1,200 feels significant. Let's look at true cost:
Your teachers spend 400+ hours/semester on manual work (report cards, grading, planning). At R600/hour salary, that's R240,000 in wasted labor.
We charge R360,000 for 300 students. We save you R240,000 in labor. Net cost: R120,000 for a complete AI platform.
Compare that to Zeraki (R240K software + R240K labor = R480K true cost).
We're not expensive. We're 75% cheaper when you include AI savings."
"Zeraki is R800, you're R1,200"
Response: "Correct. And Zeraki has 0 AI features. You'll spend R240K on software and STILL waste R240K on manual labor (R480K total).
We charge R360K and SAVE you R240K in labor (R120K net cost).
Would you rather:
- Zeraki: R480K true cost, 0 AI
- YeboLearn: R120K net cost, 15+ AI
The R400 difference buys you R226,000 in AI value. That's a 565x return."
"Can you match Zeraki's R800?"
Response: "We could, but then you'd lose the AI features that save R240K/semester. Let's do the math:
Option A: We match R800, remove AI features → You save R120K on software but lose R240K in AI savings = Net LOSS of R120K
Option B: You pay R1,200, get full AI → You spend R120K more but GAIN R240K in AI savings = Net GAIN of R120K
Matching Zeraki's price would cost YOU R240K. Why would we do that?"
Revenue Optimization Tactics
Upsell Paths: Essentials → Professional
Trigger: After 6 months on Essentials
Tactic: "Unlock Full AI" campaign
- Email: "You're using 5 AI features. See what 15+ AI features unlock."
- Demo: Show advanced features (predictive analytics, custom reports, API access)
- Offer: "Upgrade to Professional, get 50% off first semester (R900 instead of R1,200)"
Conversion Target: 40% of Essentials schools upgrade within 12 months
Cross-Sell: Add-Ons for Enterprise
SMS Credits: R0.50/SMS (after included 500/month) Custom AI Models: R200/student one-time setup White-Labeling: R50K setup + R5K/month API Access: R10K/month
Revenue Impact: +10-15% on Enterprise tier
Pricing Confidence Builders
30-Day Money-Back Guarantee
Offer: "Try YeboLearn for 30 days. If you don't see AI value, full refund."
Why:
- Removes risk (schools afraid of commitment)
- Confidence signal (we KNOW they'll see value)
Cost: <2% refund rate (AI value is obvious in 1 week)
ROI Guarantee (Enterprise Tier Only)
Offer: "If we don't save you 400+ hours in first semester, we'll refund 50% of fees."
Why:
- Enterprise buyers need guarantees
- We're confident (400+ hours is conservative estimate)
Cost: 0% refunds to date (we over-deliver)
Recommended Pricing Truth
R800 (Essentials) = volume play, competitive entry.
R1,200 (Professional) = DEFAULT, best margin, strongest ROI.
R2,500 (Enterprise) = premium, category leadership.
Raise prices 20-25% annually (Year 2-3).
Never compete on price. Compete on VALUE.
AI saves R226K. THAT'S the price anchor.
Last Updated: November 22, 2025 Next Review: Quarterly (adjust based on win rates, competitor moves)