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Chargify New Pricing

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Re: Chargify New Pricing

#121

Post by steveklabnik »

cglee wrote: post #72
davidedicillo wrote: post #37

Some Chargify alternatives: http://cheddargetter.com http://www.spreedly.com http://recurly.com http://www.braintreepaymentsolutions.com

Just a note that Recurly did this exact same thing several months ago, though they've since changed their prices again. We were literally 1 day away from launching on Recurly when they changed prices. Spooked by the sudden price hike, we spent a good deal of time re-writing our ecommerce on Chargify. And now this. Maybe it's time to just bite the bullet and roll our own solution. Spreedly doesn't provide the same fun…

> I haven't worked with CheddarGetter or BrainTree directly.

Let me put a big +1 in for BrainTree, then. Especially when coupled with something like their Ruby gem (http://rubygems.org/gems/braintree , written by them, not even someone else's implementation) or ActiveMerchant, it's really, really easy to integrate. Plus, since when does your card processor have articles about their git process? (http://www.braintreepaymentsolutions.com/devblog/our-git-wor...)

I have no affiliation with them other than being a happy customer.

Re: Chargify New Pricing

#122

Post by rksprst »

toast76 wrote: post #119
dh wrote: post #114

My name is David Hauser (@dh) and I am a founder at Chargify as well as the Grasshopper Group where I have spent the last 7 years serving hundreds of thousands of entrepreneurs and helping them to succeed. I want to respond directly here and invite anyone to reach out to me personally on Twitter or email to talk about this or anything else. We made a mistake with how we implemented and communicated a massive price in…

Firstly, thanks for the change of plan. But don't think you're off the hook that easily! :P I understand the need to ditch free users. It's a common tale that supporting free users is just not worth the effort. But realistically, dropping a bomb like this on the many customers you already have which are either "only just" paying or "about to pay" is just plain horrible. Startups who are just ticking over to the base…

I've met David and he is a great guy that really cares about entrepreneurs, so I'm surprised about how they went about this pricing change.

The pricing change itself makes total sense (startups who never get any traction/paying customers end up costing a ton and never pay anything) - but changing to a pricing structure that can hurt so many entrepreneurs (like in toast76's case) seems the wrong way to go.

Is the cost to grandfather in all the existing customers really worth all the brand damage this created? Not to mention the startups that are now cash-flow negative since they are being suddenly charged for all their free users (and apparently one-time payment users).

The icing on the cake is that their branding is focused around being the service provider to entrepreneurs.

Re: Chargify New Pricing

#123

Post by rwhitman »

dh wrote: post #114

My name is David Hauser (@dh) and I am a founder at Chargify as well as the Grasshopper Group where I have spent the last 7 years serving hundreds of thousands of entrepreneurs and helping them to succeed. I want to respond directly here and invite anyone to reach out to me personally on Twitter or email to talk about this or anything else. We made a mistake with how we implemented and communicated a massive price in…

Even $39/mo is still prohibitive. Considering the cost of modern cloud hosts, your bottom plan is still more expensive than a web server in some cases...

As someone building a bootstrapped side project with absolutely zero customers, I wouldn't mind a stripped down $20/mo / 50 customer plan that had no phone support. But anything more than that, it really doesn't make any sense to be paying more for Chargify than the server - after all I still have to get a merchant account and go through all the BS with that on top of it.

Paypal is starting to look better and better every day, and its kind of a bummer because now if I want to support direct payments later on I need to account for Paypal, and I'd be more likely to just roll my own system

Re: Chargify New Pricing

#124

Post by toast76 »

rksprst wrote: post #122
toast76 wrote: post #119

Earlier quoted context omitted.

Firstly, thanks for the change of plan. But don't think you're off the hook that easily! :P I understand the need to ditch free users. It's a common tale that supporting free users is just not worth the effort. But realistically, dropping a bomb like this on the many customers you already have which are either "only just" paying or "about to pay" is just plain horrible. Startups who are just ticking over to the base…

I've met David and he is a great guy that really cares about entrepreneurs, so I'm surprised about how they went about this pricing change. The pricing change itself makes total sense (startups who never get any traction/paying customers end up costing a ton and never pay anything) - but changing to a pricing structure that can hurt so many entrepreneurs (like in toast76's case) seems the wrong way to go. Is the cost…

That's the bit that upsets me. I've dealt with Lance in particular quite a bit. These guys are fanatical about helping out. I WAN'T to give these guys money. I love their stuff, I love their spirit. If this was Paypal I wouldn't be posting here... I'd just be closing my account.

Re: Chargify New Pricing

#126

Post by alextgordon »

3pt14159 wrote: post #115
alextgordon wrote: post #82

Earlier quoted context omitted.

I don't know why they don't just charge a set monthly amount for each user (up to a threshold). Say $1. So if you have 20 users you pay $20/month. That would allow them to keep their existing customers, cover their costs and provide a path for people to work up to $99/month. Also, they shouldn't have doubled their fees for existing paying customers.

I empathize with you're sentiments, but I ran a split test for a SaaS based business and it turns out "packages" convert better, at least for their target market (law firms). It would be nice if everything was just a continuous curve, but people are more sold on "plans".

Hmm. I can understand that. But I don't think it applies here, since the distinct plans would still be there for customers with more than 500 users.

The per user $x pricing would only change things for customers with less than 100/x users, which let's face it, they're not going to be making any money off now.

Re: Chargify New Pricing

#127

Post by joshhart »

jacquesm wrote: post #17

> we do need to migrate everyone to the new pricing You can't change your pricing upwards for existing customers, ever. You can change your price to anything you want for new customers. You can decrease your prices for anybody at any point in time. Something like chargify is the basis for the business models of other parties, if you made a deal in the past you have to honor it, so that your customers can honor the de…

Why? Milk is more expensive than it used to be. Songs on iTunes are $1.29 now. I don't see any reason whatsoever that a company can't increase rates. Inflation and rising costs are facts of life. Even if they weren't, if a company realizes they can make more by charging more, then why shouldn't they?

They shouldn't have made such a massive price hike, and they should have given more notice, and I think that's the real issue.

Re: Chargify New Pricing

#128

Post by jacquesm »

joshhart wrote: post #127
jacquesm wrote: post #17

> we do need to migrate everyone to the new pricing You can't change your pricing upwards for existing customers, ever. You can change your price to anything you want for new customers. You can decrease your prices for anybody at any point in time. Something like chargify is the basis for the business models of other parties, if you made a deal in the past you have to honor it, so that your customers can honor the de…

Why? Milk is more expensive than it used to be. Songs on iTunes are $1.29 now. I don't see any reason whatsoever that a company can't increase rates. Inflation and rising costs are facts of life. Even if they weren't, if a company realizes they can make more by charging more, then why shouldn't they? They shouldn't have made such a massive price hike, and they should have given more notice, and I think that's the rea…

Because milk won't go up from $.99 to $99 per month in one day.

Of course inflation and rising costs are a fact of life. But the economies of scale in a business like this lead to lower prices, not higher ones and the main excuse chargify seems to have for raising their prices is the fact that they are successful at the 'free' tier.

Which is something they should have factored in from day one, not come up with after a whole bunch of people have tied in their lot with them. This is a black eye for the whole third-party processing business, not just for chargify.

You don't remind your customers how much you have them by the short & curlies if you can help it, you make course changes nice and slow so you don't rock the boat. And if you mess up your planning you can either open your books and work it out in tandem or you can eat the loss and charge it to your education fund.

Re: Chargify New Pricing

#129

Post by jacquesm »

dh wrote: post #114

My name is David Hauser (@dh) and I am a founder at Chargify as well as the Grasshopper Group where I have spent the last 7 years serving hundreds of thousands of entrepreneurs and helping them to succeed. I want to respond directly here and invite anyone to reach out to me personally on Twitter or email to talk about this or anything else. We made a mistake with how we implemented and communicated a massive price in…

Hey David,

I suggest a massive course correction, switch back to the old plan today, inform your users, open up your books and work out a plan together with your users. I know that that may be very difficult for you at this point but you are literally killing the chargify brand with how you go about this.

Go back to where you were 24 hours ago, then make very careful moves forward in concert with your userbase. You can still do it, wait a bit longer and the window of opportunity will close. As soon as people start to throw their dreams in to the garbage and notify their end users because of changes you have made chargify might as well close up shop. Ocean liners do not turn on a dime, they'll break and sink.

If the goal of all this is to shake out the 'free' tier remember that each and every business starts at zero.

The best thing you could probably do is to find a way to put a sunset clause on the free deal in concert with your users, reasonable terms all around and then to create a limited time free offer which will automatically convert in a model that covers your costs. If they grow over that you will recoup the loss of the initial free signups.

The data you have amassed on your customers profiles will need to be brought in on figuring out what kind of model will work best for both you and your customers. My bet would be that the model that matches the chargify demographic best would be one that cuts a merchant 180 days of slack to get going, after which they enter several tiered schemes where the cost per transaction goes down as the volume goes up.

Users don't care how you want to serve them, they care that they will be served in a way that works for them, and to tack on a fixed fee where there was none before is a way that does not work for lots of your users. If you think that only the small ones will be affected you can bet that if you don't work this out in a good way that the big ones will be looking to bail as fast as they can as well.

You made a mistake, the fix compounded the mistake (I know that from your perspective it looks like meeting them more than halfway but it really doesn't, $40, at 10 sales per month works out to $4 per sale, at 20 sales it is still $2 per sale and at 40 sales you are getting in to 'reasonable' territory.

If the support costs are what is killing you then work on reducing them further, excellent guides and a team of super users to help out the newbies.

Freemium does not mean 'yesterday you were all free, today you're all premium'.

good luck!

Re: Chargify New Pricing

#130

Post by heimidal »

railsjedi wrote: post #16

That's a pretty huge price increase. With all the competition in this space (Recurly, CheddarGetter, Spreedly, many others), I would assume the prices would be going down , not skyrocketing up. They obviously are banking on the fact that their customers are already tied up with their API, so it would be difficult to switch. This is pretty sketchy, and it's going to make me very suspicious of these guys in the future.…

I don't think you can expect these services to lower pricing any time soon. Why? It's clear now that Chargify and Recurly, who have both tried a very friendly freemium model, vastly underestimated the costs and problems associated with the businesses they are building. In both cases, it's a good bet that they needed to either raise prices or go out of business.

Pricing only goes down once the business model is clearly established across multiple competitors. This space simply isn't clearly defined yet.

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