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New Pricing Announced… and explained in detail

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I’ve made a number of references in this blog, on the community forums and privately to many about a planned price increase for WORK[etc].  Universally it has been met with encouragement which surprises; I’d been bracing for a whole lot of resistance, but that just isn’t coming through.

To be absolutely clear, this will not affect current, paying customers.  All the people that supported us from launch until the day we actually set live the price increase will be Grandfathered at their current pricing.  I’d like to be able to say Grandfathered forever, but we just don’t know what might happen in the future.  I can personally guarantee a minimum of two years and state that I have no intention to ever increase prices for these users.  This is your reward for helping us build WORK[etc] to date.  Payback time.

Why the price increase?

Firstly …

WORK[etc] has evolved far beyond the glorified notice board, with contacts and simple billing that it once was.  It is now a full blown small business management platform – most of our customers manage and automate their entire business from WORK[etc] and others that require specialist industry software are successfully integrating WORK[etc].  BUT – I still have a long way to go in terms of where I want the product to be.

This requires a few more developers on the team.

Additionally we have a very real commitment to very real customer support – so much so that it is fast becoming a competitive advantage.

Now, so far I’ve largely funded WORK[etc] from my own pocket, from consulting gigs and with cashflow from our early adopters. Now is the time to really accelerate product development and beef up customer support. 

This is roughly where we spent money in December 2010:

So – if you had an active WORK[etc] subscription in December, 50% of your subscription fee went on building a better product.  Kinda cool.

Then another 20% on customer support and another 12% on servers, bandwidth and back up.  Essentially everything gets reinvested into the business.  A fee increase means collecting more money to fund product development faster and build out real time, live customer support options.

Secondly…

We’re shortly to announce a new affiliate program and a proper certified partner program.  At the current pricing model, this just doesn’t work.  No one gets excited at the thought of earning 50% commission on a $10 sale.

Thirdly…

Our current price point is mostly less than the one-show-ponies like Basecamp, or Freshbooks, Zendesk and a multitude of other SaaS vendors.   This was intentional whilst we were in early beta-mode so as to attract brave early adopters to help guide development.

Fast forward eighteen months and prospective customers immediately think WORK[etc] to be inferior or of poor quality based on price perception alone.  So much so that I’ve got a handful of emails printed out from customers that initially discounted WORK[etc], only to give it a second chance after not being able to find a comparable alternative.  They end up emailing in to say how happy they are.

Lastly…

This is not a real reason, but worth mentioning anyway as I find it interesting.  We receive at least one email a week from prospective customers complaining that the current pricing is just too high for a small business.  There is no nice way of putting this so here goes…

If a small business cannot afford $29/month for software to manage their business, then they have much bigger problems looming.  They should be spending time seriously considering why they are in business.  That might sound a little harsh, but the reality is these guys should be putting in the time to look at cashflows rather than shopping around for management software …

That said, to date we have supported several existing, genuine customers who have run into trouble with free or discounted licenses to lend a hand getting them back afloat.  We will continue to do this.

New Pricing Tiers

So, considering all of the above I’m hoping everyone will get behind us and give support to the planned pricing tiers.

1 – 10 users:  $39/user/month, then

11 – 20 users: $29/user/month, then

20+ users: $19/month

Whilst the pricing initially seems a steep increase from the old pricing, at its most expensive it is still only $1.38 per user, per day.  Considering I paid $5.20 just now for a large take away coffee this seems like a total steal…

We will be offering 3 promotions (available on new pricing only):

  • Bonus months when prepaying for 12 months
  • Lifetime discounts for NGO’s, Not-for-Profits and other people doing good
  • Subscription holidays for existing customers who find themselves struggling

And as mentioned already, all existing customers will keep paying the same rate that they signed on for.  You can add users or remove users freely.  What you won’t be able to do is cancel your account, then come back 3 months later, start a new account (or recover an old account) and expect to get the old rate. Grandfathering is for customers who continue to be customers and continue to support WORK[etc].

I should also mention that we’ll be upgrading all accounts to unmetered storage as a bit of a bonus.  This means unlimited storage for your work documents.

We’re aiming for the new pricing to come into effect just after February 1st – maybe a week after at the most.  If your active free trial crosses this threshold, you’ll still get in on the old pricing.

Major email upgrade

Also, this week we are progressively rolling out a major email upgrade to all accounts:

  • Ability to track if an email is received or if it bounced.  For example, you can double check to see if your customer did actually receive their invoice
  • Integration of a hard-core, specialist email deliverability provider to minimise email getting caught in spam boxes
  • A number of email reports designed to help clean up and keep current email lists and contact details
  • Removal of our temporary throttling on email marketing

Everyone will start to see a few new interface items here and there – I’ll be explaining them properly in a blog update later this week …

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