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Zendesk raises their prices 60%-300%, users predictably revolt

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Re: Zendesk raises their prices 60%-300%, users predictably revolt

#31

Post by Loic »

You can also think one step ahead. When you build your business around a SaaS offer, it is exactly like the old Microsoft way, you depend on the offer and you can be locked in.

Surprisingly people get all excited by the new services with great API, nice teams behind them, bootstrapped, etc. but forget that when you do that you explicitly tell: "Yes provider XYZ, I accept to depend on you and to let you partially control my business.".

This is why for my small bootstrapped project management/code hosting offer I propose a full daily backup and the software as GPL at the same time.

That way my customers get the comfort of SaaS and the freedom of the GPL as they can migrate away without pain. I secured a couple of companies with 10+ active coders this way. They know they can download the software (which has an active community) and install it on their system if they want, when they want, for free. Finally a bit like what Wordpress is doing.

Re: Zendesk raises their prices 60%-300%, users predictably revolt

#32

Post by jdrock »

ahoyhere wrote: post #24

Anybody here successfully raised prices without a major blowback? I'd love to hear how you did it (as opposed to these clowns).

We increased prices at 80legs from on-demand ($2.00 per million pages) to subscription + on-demand (starting at $99 per month + $2.00 per million pages).

It was a success for us. Here's why:

1. It was early on - just a few months after our public launch.

2. We offered a limited free version in conjunction with the price increase.

3. We lost some customers, but they were only worth max $10 per month. We were able to work with some of those customers to setup custom plans that met their needs.

4. The customers we did keep went from being worth $50 - $100 per month to $100 minimum per month.

5. Our major competitors charge thousands per month, so we were still absurdly cheaper than them.

Re: Zendesk raises their prices 60%-300%, users predictably revolt

#33

Post by enntwo »

hga wrote: post #23
enntwo wrote: post #12

Regardless of who's side you fall on, I think this is a pretty good example of why allowing public comments is a bit of a dangerous move. (Clearly the more dangerous move here was the price hike, but I do not know the internals of the company that led to the decision, or the interest that it was in, so I will not comment on that so much.) It is tough to imagine them recoverving from the sort of mob-rule that has form…

I'm not sure you're right. The backlash would be expressed elsewhere, here at least it's in a place they cannot afford to ignore. Their actions going forward, e.g. if they purge the posting with the links to competitors, will tell us a lot about them and how they're going to deal with this. Also note this could be part of an internal faction fight, one faction who's against this move may have wanted this so that they…

My main argument is now that they have allowed public comments and such backlash occurred, they cannot feasibly double back on it. Any purging of comments would only further feed the fire and damage there PR as you mentioned.

I don't believe that the avoiding the creation of a public forum on your service's site is surpessing information and communications though, but I will agree that once one is made it must be dealy with judiciously and should not have its contents purged or modified after the fact just because they are not in the companies best interest. This would only hurt further, and from what we have seen so far here, ZenDesk has left all the comments intact.

I also don't think such a backlash would be felt if originated from elsewhere, even from many other sources. The main issue here is that all of the users who are first discovering the issue have no time to think about how it truly effects there business, but are only tossed into a frenzy of doubt and anger.

Many of the users would not know about the complaints and discussions on twitter, and there competitors would not be getting so much attention if it were not directly linked and discussed on their page.

Of course I cannot know how much different it would be if they did not provide such a public discussion area, but it seems now they have provided a universal entry point into the user-mob that they must actually maintain.

Re: Zendesk raises their prices 60%-300%, users predictably revolt

#34

Post by hga »

ahoyhere wrote: post #30
hga wrote: post #23

Earlier quoted context omitted.

I'm not sure you're right. The backlash would be expressed elsewhere, here at least it's in a place they cannot afford to ignore. Their actions going forward, e.g. if they purge the posting with the links to competitors, will tell us a lot about them and how they're going to deal with this. Also note this could be part of an internal faction fight, one faction who's against this move may have wanted this so that they…

We allow public comments on our SaaS blog, but we don't use things like UserVoice for these reasons… If the issue is a minor annoyance, people will be minorly annoyed. They will probably write support; we'll handle it; they'll get personal service; everybody's happy. Until they see that other people have it too, and have the option to "vote it up," etc. That way, a minor annoyance a person would live with -- and be h…

Indeed, it most certainly goes both ways.

But at a certain point in its growth if a company doesn't maintain their own forums alternative ones that they don't have any control over or maybe even knowledge of will spring up. And that will happen instantly in the case of an atrocity like this one.

"Keep your friends close and your enemies closer." If you pull a move that turns a lot of the former in to the latter, well, that bit of advice is probably all the stronger.

Of course, you need to actually respond to them if it's to be of any good and that doesn't seem to be happening as of yet.

Re: Zendesk raises their prices 60%-300%, users predictably revolt

#35

Post by patio11 »

spolsky wrote: post #27
ahoyhere wrote: post #24

Anybody here successfully raised prices without a major blowback? I'd love to hear how you did it (as opposed to these clowns).

Easy: Grandfather every existing customer, permanently.

Bonus points: if you tell them you're going to do it ahead of time, it gooses sales like crazy.

Re: Zendesk raises their prices 60%-300%, users predictably revolt

#36

Post by mattmaroon »

I don't understand why they're charging more per user as you scale. I don't know that I've ever seen a service like this.

More typical would be $12 per mo per agent from 1-3. $10 from 4-20, etc.

What's crazy is their service is considerably more expensive than hosted Exchange servers (which give you volume discounts, not increases) though Exchange probably costs a lot more to run. We use Zendesk and like it, but if we ever get to 20 or more support guys the business case for building our own ticketing system will be a slam dunk.

Re: Zendesk raises their prices 60%-300%, users predictably revolt

#37

Post by ahoyhere »

hga wrote: post #34
ahoyhere wrote: post #30

Earlier quoted context omitted.

We allow public comments on our SaaS blog, but we don't use things like UserVoice for these reasons… If the issue is a minor annoyance, people will be minorly annoyed. They will probably write support; we'll handle it; they'll get personal service; everybody's happy. Until they see that other people have it too, and have the option to "vote it up," etc. That way, a minor annoyance a person would live with -- and be h…

Indeed, it most certainly goes both ways. But at a certain point in its growth if a company doesn't maintain their own forums alternative ones that they don't have any control over or maybe even knowledge of will spring up. And that will happen instantly in the case of an atrocity like this one. "Keep your friends close and your enemies closer." If you pull a move that turns a lot of the former in to the latter, well…

I totally see your point.

The other school of thought says, though, that if there's not a single point for them all to coalesce around, the uproar won't happen.

If you're determined to screw your customers, of course, nothing will stop them ;)

Re: Zendesk raises their prices 60%-300%, users predictably revolt

#39

Post by ahoyhere »

spolsky wrote: post #27
ahoyhere wrote: post #24

Anybody here successfully raised prices without a major blowback? I'd love to hear how you did it (as opposed to these clowns).

Easy: Grandfather every existing customer, permanently.

That's not really an answer.

If you're raising prices because of a profit issue, then you are prepared to lose some customers (the least profitable ones) so you can better serve the ones that give you a profit.

Which is why I asked for strategies that worked, not "Don't."

Re: Zendesk raises their prices 60%-300%, users predictably revolt

#40

Post by paraschopra »

ahoyhere wrote: post #24

Anybody here successfully raised prices without a major blowback? I'd love to hear how you did it (as opposed to these clowns).

Yeah, ClickTale did that http://visualwebsiteoptimizer.com/split-testing-blog/how-pri...

Although I have no clue how they managed to do so :)

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