Chargify News: New Pricing(grasshopper.com)
grasshopper.com
Chargify News: New Pricing
http://grasshopper.com/email_assets/chargify-bootstrapper.html
13 comments
You're saying that Chargify should say "We're on the verge of death -- here's the stats, our current path is clearly not sustainable, we're hemorrhaging money on our worst customers" to help with their customer retention for a component which is mission critical? That would not be the tact I would take. One whiff of instability and the best clients will be out the door, because downtime costs them actual money. The only people who would stay are the ones for whom $100 is expensive compared to their ability to charge customers going down unexpectedly. In other words, terrible customers who you can't base a business on.
I've mentioned a time or two that one of the benefits of charging more money is that it scares away pathological customers. A business which wants telephone support for their credit card processing systems integration and is not willing to pay $100 is virtually a textbook pathological customer.
(If it needs saying: I am a bootstrapper. I love boostrappers. Many of us are pathological customers with unreasonable expectations.)
I've mentioned a time or two that one of the benefits of charging more money is that it scares away pathological customers. A business which wants telephone support for their credit card processing systems integration and is not willing to pay $100 is virtually a textbook pathological customer.
(If it needs saying: I am a bootstrapper. I love boostrappers. Many of us are pathological customers with unreasonable expectations.)
If you were made a promise it is no longer an unreasonable expectation.
And while bootstrappers may be misers they also know the value of a contract, even if it is in the form of the terms of service on a website and a price point they can live with, which they no doubt researched before signing up.
They understand giving timely notice and the reality of life for other businesses.
A 180 degree course change needs more of an explanation than 'we do this because we can', that is (far) more damaging than having some egg on your face for being overly optimistic.
I've messed up in the past, we gave out 'lifetime' subscriptions for $89.95 and we really made good money on them, for about 3 weeks. The way we plugged the hole way to stop selling them and to announce a sunset clause that said that if your account had been dormant for more than 12 months it would get deleted.
Not a peep.
That's how you deal with mistakes like this, not by suddenly tightening the noose.
And while bootstrappers may be misers they also know the value of a contract, even if it is in the form of the terms of service on a website and a price point they can live with, which they no doubt researched before signing up.
They understand giving timely notice and the reality of life for other businesses.
A 180 degree course change needs more of an explanation than 'we do this because we can', that is (far) more damaging than having some egg on your face for being overly optimistic.
I've messed up in the past, we gave out 'lifetime' subscriptions for $89.95 and we really made good money on them, for about 3 weeks. The way we plugged the hole way to stop selling them and to announce a sunset clause that said that if your account had been dormant for more than 12 months it would get deleted.
Not a peep.
That's how you deal with mistakes like this, not by suddenly tightening the noose.
Price increase from $0 to $39 without a long transition period still does not work. If this came out at the start of the day, the outcry would've been same as $99. Feels different with the "change" but don't be fooled.
It's amazing to see this cycle happen again and again--do the people in charge not think that "our customers will mind a big mandatory price increase without any warning or added benefit" applies to their baby? The business they're in gets cheaper with scale, raising prices significantly appears nothing more than a money grab. If you need to raise prices, do it for new accounts and make sure to tell your existing customers thanks for helping build your company and point out that they're now getting a "steal".
I don't believe it is quite that simple. I think chargify did not do this on purpose, but rather was confronted with a large amount of hidden costs that they did not factor in to their planning. Instead of saying 'sorry, we goofed, how about this' in concert with their users they chose to see if there was enough stretch.
But some things are just 'not done', rearranging a deal after the fact is very bad for business, especially if you are in finance, where trust is everything.
After all, you are literally dealing with your customers money and their trust is the most important single resource you've got.
But some things are just 'not done', rearranging a deal after the fact is very bad for business, especially if you are in finance, where trust is everything.
After all, you are literally dealing with your customers money and their trust is the most important single resource you've got.
their list of benefits is laughable
especially "fully coming out of beta in order to serve you better", because that beta logo really hindered the user experience
especially "fully coming out of beta in order to serve you better", because that beta logo really hindered the user experience
Don't forget "and listening to your Uservoice feedback to develop Spreadable". How could that possibly be listed as a benefit for chargify users affected by this pricing change?
Yeah, i didn't understand that one at all. Lame.
also, its my understanding that PCI is required for anyone who 'transmits' card data, i.e anyone who uses the chargify API. If you dont have your game tight you are not PCI compliant and liable for any card data losses, regardless of chargify being compliant.
This whole debacle doesn't give me a lot of faith in the ethical integrity of their leadership. This is a straight mafia move. Do you a small favor for free and then come back later and demand your lifetime loyalty.
That being said, it's arguably an effective business move. Businesses that came in early have an uphill battle to switch providers -- many will stay out of complacency.
That being said, it's arguably an effective business move. Businesses that came in early have an uphill battle to switch providers -- many will stay out of complacency.
some reliable self-hosted alternatives for people who need to jump quickly. rails: http://github.com/maccman/saasy rails: http://railskits.com/saas/ php: http://www.opengateway.net/
The plan all along so $39 doesn't seem so bad compared to $99?
This sounds like an opportunity for new or existing competitors. Personally, I'd love to see a service that would store my CC numbers as well so I wouldn't have to fork out ANOTHER $20/mo to Auth.net. I realize that Braintree does this, but the $75/mo minimum in transaction fees make it a tough choice for those just starting to get customers.
As an existing Chargify customer, I'm actually very, very glad that Auth.net is the one storing all the data. It gives me the ability to say bye-bye to Chargify and jump to one of their competitors, which I'm seriously considering after this debacle.
too bad doesn't help people who were planning to use them but never sign up (we left the billing system at last)
But you're not locked in like people who already have had users sign up and give Chargify their credit card info, so it's much less of a big deal for you.
Good point, I'm currently testing their system but can walk away. I'd be seriously pissed if I was locked in.
Oh, well if you're testing it to the extent of having written code to work with it, you can probably email them saying you've already started integrating with Chargify and want the bootstrapper plan. But that's assuming you still want to use them.
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anyone have any experience with recurly? http://recurly.com/pricing
Never heard of them, I thought they had a service to create gif images of letters. Char-GIF-y.
Grow some balls and grandfather in the old accounts under the old conditions without limitation and let them die in peace or grow until they are good customers.
You don't wipe away a cock-up like this with a band aid solution, you wipe it away by going the extra mile. And if you can't go the extra mile because you really have to do this in order to survive (and apparently there was at least $60 play in there) then you should publish your figures.
Painful, but it will create the understanding required to make the merchants swallow the bitter pill.