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Sorry. We Messed Up. (Zendesk responds to pricing criticism)

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Re: Sorry. We Messed Up. (Zendesk responds to pricing criticism)

#31

Post by hyperbovine »

mcantor wrote: post #8
jimboyoungblood wrote: post #7

When we decided to make a change to the Zendesk pricing structure for our existing customers, we tried to be as thoughtful, transparent, and straightforward as possible. Transparent? Maybe you should've given your customers a warning first..? While the letter is certainly worded very nicely (and carefully), it reeks more of damage control than sincerity. The picture with the puppy dog face puts it way over the top.

How do you get more sincere than, "We failed. We let you down. And we apologize."? I'm asking this in all honesty; I don't really understand where you see this as being insincere. Just curious.

Because they are apologizing for the wrong thing. "We have also been reaching out to our customers to truly understand the heart of why you are upset" suggests that it never even occurred to them that people would be mad about this. I mean, really? They knew very well what they were up to; businesses don't do this sort of thing on a whim. I'd bet you anything this guy has a spreadsheet showing revenue shooting through the roof as a result of the new pricing.

This is an apology for carelessness, but the real issue is greed. That is why it strikes me as insincere.

Re: Sorry. We Messed Up. (Zendesk responds to pricing criticism)

#32

Post by jodrellblank »

mcantor wrote: post #8
jimboyoungblood wrote: post #7

When we decided to make a change to the Zendesk pricing structure for our existing customers, we tried to be as thoughtful, transparent, and straightforward as possible. Transparent? Maybe you should've given your customers a warning first..? While the letter is certainly worded very nicely (and carefully), it reeks more of damage control than sincerity. The picture with the puppy dog face puts it way over the top.

How do you get more sincere than, "We failed. We let you down. And we apologize."? I'm asking this in all honesty; I don't really understand where you see this as being insincere. Just curious.

How do you spend two and a half years "putting your customers first" and not realise that a 300% price increase would annoy them?

for those customers who took action this week to convert to an extended billing cycle, please contact us if you would like to revert back to the billing cycle that you held as of Monday isn't putting customers first, it's putting employee convenience first. Find the customers who converted to an extended billing cycle, contact them and offer to revert them even if it's inconvenient. That's putting them first. Which they claim to be doing but aren't.

Re: Sorry. We Messed Up. (Zendesk responds to pricing criticism)

#33

Post by nickpleis »

WiseWeasel wrote: post #17
jimboyoungblood wrote: post #7

When we decided to make a change to the Zendesk pricing structure for our existing customers, we tried to be as thoughtful, transparent, and straightforward as possible. Transparent? Maybe you should've given your customers a warning first..? While the letter is certainly worded very nicely (and carefully), it reeks more of damage control than sincerity. The picture with the puppy dog face puts it way over the top.

That was the warning. The pricing change doesn't go into effect until July 1st, I believe.

That's not a lot of warning for folks who are using a product like ZenDesk. The whole point is that a tool like this is embedded into your companies work flows. To leave ZenDesk means that you have to find a new product. Figure out how to move all of your data into that new product. Figure out how to handle tickets that are still in process on July 1. Train your staff. Change any customer facing UI or other automated bits that utilize ZenDesk.

The product is the type of product that inherently has a lot of lock-in. Giving me a month and a half to change all of that is more or less equivalent to making the changes effective tomorrow.

Re: Sorry. We Messed Up. (Zendesk responds to pricing criticism)

#34

Post by Mark_B »

gizmo wrote: post #16
Mark_B wrote: post #13

Interesting to see the "too little too late" comments on their comments. Proof that 1) no matter how hard you try to apologize and make things right, you can't please everybody and 2) unfortunately, these people are the most vocal.

Well, they didn't try very hard to make things right. Users revolted, so they caved. That's all there is to it. The "unfortunately these people are most vocal" misses the mark completely -- had they been NOT vocal they would've faced enormous bills or they would have to spend 50 hours trying to migrate to a new system. That's if the data can be exported and imported freely, which is rarely the case. So the customers…

Before, back when they complained in the first place - that was completely awesome. But to gripe about having wasted time evaluating other solutions? This is something everybody should do. No matter how happy you are using any product, be it software, hardware, utilities, daily transportation, you consider evaluating costs/benefits of a "Plan B".

Re: Sorry. We Messed Up. (Zendesk responds to pricing criticism)

#35

Post by kristiandupont »

parfe wrote: post #22
mcantor wrote: post #8

Earlier quoted context omitted.

How do you get more sincere than, "We failed. We let you down. And we apologize."? I'm asking this in all honesty; I don't really understand where you see this as being insincere. Just curious.

Well for one thing pissing off your customers is not "letting them down." It's pissing them off. Side stepping the fact in the "apology" is like a little kid apologizing for something because he knows it is a required action. Not because he's sorry. This company is sorry that the customers got angry and forced the pricing change. They are not sorry for "letting them down"

Interesting - I never thought of it before, but does it even make any sense to apologize for something that you did intentionally? It is what we force children to do, but mostly because it is a part of a sound upbringing.

If you spill coffee on someone, an apology makes perfect sense. You caused someone harm and you acknowledge that, but it wasn't intentional. However, if you steal from someone, saying that you are sorry is not as simple; why did you do it in the first place, then?

Re: Sorry. We Messed Up. (Zendesk responds to pricing criticism)

#36

Post by [deleted] »

sachinag wrote: post #15
dangrossman wrote: post #3

This is how a startup should handle pricing changes, so long as the old pricing scheme was viable. This is the opposite of what Recurly did a month or two ago when they dramatically raised prices and the same revolt occurred. Their response was a big "F You", and their latest e-mails finally announcing even more pricing changes show they lost enough users in the process that it threatened their viability.

I have to defend the Recurly folks here. They made a bet on flat-rate pricing over per-use pricing. Turns out that a flat-rate plan hurts you on the low end (people who won't use you at all, and where the uproar was) and on the high end (you're leaving money on the table from your potentially most profitable customers). Flat-rate pricing works for the vast, vast majority of internet companies since the day AOL won ov…

[deleted]

Re: Sorry. We Messed Up. (Zendesk responds to pricing criticism)

#37

Post by SoftwareMaven »

kristiandupont wrote: post #35
parfe wrote: post #22

Earlier quoted context omitted.

Well for one thing pissing off your customers is not "letting them down." It's pissing them off. Side stepping the fact in the "apology" is like a little kid apologizing for something because he knows it is a required action. Not because he's sorry. This company is sorry that the customers got angry and forced the pricing change. They are not sorry for "letting them down"

Interesting - I never thought of it before, but does it even make any sense to apologize for something that you did intentionally? It is what we force children to do, but mostly because it is a part of a sound upbringing. If you spill coffee on someone, an apology makes perfect sense. You caused someone harm and you acknowledge that, but it wasn't intentional. However, if you steal from someone, saying that you are s…

While I do force my kids to apologize on occasion, more as a way of teaching that when you hurt somebody (either intentionally or not), you should try to make it better and an apology is part of that, I know what they are thinking:

"Yeah, I'm sorry. Sorry I got caught!"

Re: Sorry. We Messed Up. (Zendesk responds to pricing criticism)

#38

Post by dangrossman »

[deleted] wrote: post #36
sachinag wrote: post #15

Earlier quoted context omitted.

I have to defend the Recurly folks here. They made a bet on flat-rate pricing over per-use pricing. Turns out that a flat-rate plan hurts you on the low end (people who won't use you at all, and where the uproar was) and on the high end (you're leaving money on the table from your potentially most profitable customers). Flat-rate pricing works for the vast, vast majority of internet companies since the day AOL won ov…

[deleted]

The reason for the uproar wasn't so much that flat-rate pricing is a problem, but that the company switched the API functions that were previously global across any pricing plan to the $199/month plan. So even if you could justify $50/month or $100/month for their service, you didn't have the option. You already implemented the API and can only keep using that implementation with the $200/month service.

I don't even pay my payment gateway $200/month, and they do automated recurring billing and credit card data storage too.

At the same time, the competing subscriptions-as-a-service startups already offered flat rate pricing. The per-transaction pricing Recurly offered was their main differentiator to some of these alternatives. That's the reason so many bootstrappers chose them, so switching to a $200/month fixed cost with zero notice (time to switch) and no grandfathering was a hit right to their primary customer base.

Of course I can't say for sure that's who most of their users are, but the fact that they've now backpedaled again, removed their pricing page entirely and started apologizing to users seems to indicate it wasn't a good move for them.

Re: Sorry. We Messed Up. (Zendesk responds to pricing criticism)

#39

Post by fjabre »

sachinag wrote: post #15
dangrossman wrote: post #3

This is how a startup should handle pricing changes, so long as the old pricing scheme was viable. This is the opposite of what Recurly did a month or two ago when they dramatically raised prices and the same revolt occurred. Their response was a big "F You", and their latest e-mails finally announcing even more pricing changes show they lost enough users in the process that it threatened their viability.

I have to defend the Recurly folks here. They made a bet on flat-rate pricing over per-use pricing. Turns out that a flat-rate plan hurts you on the low end (people who won't use you at all, and where the uproar was) and on the high end (you're leaving money on the table from your potentially most profitable customers). Flat-rate pricing works for the vast, vast majority of internet companies since the day AOL won ov…

Wait so are you saying that flat rate is usually better than per-use from a biz perspective or vice-versa?

EDIT: I guess it depends. Flat rate seems like an attempt to get more cash upfront to cover costs initially. The problem is you are leaving money on the table with large customers and you're potentially leaving a lot of money on the table at that. Flat rate makes sense up to a point but is anything really truly unlimited?

Re: Sorry. We Messed Up. (Zendesk responds to pricing criticism)

#40

Post by Barnabas »

dangrossman wrote: post #3

This is how a startup should handle pricing changes, so long as the old pricing scheme was viable. This is the opposite of what Recurly did a month or two ago when they dramatically raised prices and the same revolt occurred. Their response was a big "F You", and their latest e-mails finally announcing even more pricing changes show they lost enough users in the process that it threatened their viability.

I was curious about the Recurly blog post you mentioned, so I looked it up. Here's the URL for anyone else: http://blog.recurly.com/2010/03/new-pricing/
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