My take on raising prices (ran this playbook twice now, once at my company, once with a company I'm an angel in):
- Grandfather in old users for as long as you can. Forever if it's feasible. More than likely future customer revenue >>> current customer revenue so it's not worth burning goodwill. Don't go past this point unless you have a really good reason.
- If you absolutely need to increase prices for current customers, the warning should be long (6mo+). If people want to leave, they shouldn't feel rushed, and they should have time to put migrating off on their roadmap. More time also helps goodwill.
- Give several automatic extensions of ~1 month after initial deadline. No matter how many times you email, some people won't read them. This has a few benefits. 1) extensions help pick up some users who would have churned. They might miss deadline 1, but you can pick up an extra 10-15% on an extension. 2) It give you something to point to when the price increase hits and they contact support ("we told you 4 times, and extended it twice already"). It's not perfect, but it helps. Be sure to send an automatic email when you extend. 3) People will leave it to the last minute, and migrating off might take longer than planned. Blanket extensions reduce the number of panicked manual extensions, and lower manual support load.
- Be willing to give a manual extensions of a fixed time for those who raise a stink to support. Messaging can be "we'll give you a 4th extension of 3 months, but this is really the last one". Let the support team grant these without any approval to lower management overhead. It makes most people happy, but more importantly, it spreads out the anger over a longer time.
Ultimately, the steps above will slightly increase uptake, but dramatically reduce the chance of ending up on the front page of hacker news. The latter is more important, it's burning chances with future customers.
Mailchimp's Mandrill is still the worst case I've ever seen. Cheap to host product, increased prices dramatically, with minimal warning, no opt in, and unsympathetic tone from C-suite. People don't forget when companies act like this. Also: don't use Mailchimp.
Since it was price driven we went with AWS SES. We were high-volume low-value per email. A high-value low-volume use case might have better options. I’ve heard good things about sendgrid. Someone who gives a damn about delivery rate.
Can’t recommend SES. We have someone nearly full time managing the suppression list. We don’t even spam. These are just system notifications that the users need.
- Grandfather in old users for as long as you can. Forever if it's feasible. More than likely future customer revenue >>> current customer revenue so it's not worth burning goodwill. Don't go past this point unless you have a really good reason.
- If you absolutely need to increase prices for current customers, the warning should be long (6mo+). If people want to leave, they shouldn't feel rushed, and they should have time to put migrating off on their roadmap. More time also helps goodwill.
- Give several automatic extensions of ~1 month after initial deadline. No matter how many times you email, some people won't read them. This has a few benefits. 1) extensions help pick up some users who would have churned. They might miss deadline 1, but you can pick up an extra 10-15% on an extension. 2) It give you something to point to when the price increase hits and they contact support ("we told you 4 times, and extended it twice already"). It's not perfect, but it helps. Be sure to send an automatic email when you extend. 3) People will leave it to the last minute, and migrating off might take longer than planned. Blanket extensions reduce the number of panicked manual extensions, and lower manual support load.
- Be willing to give a manual extensions of a fixed time for those who raise a stink to support. Messaging can be "we'll give you a 4th extension of 3 months, but this is really the last one". Let the support team grant these without any approval to lower management overhead. It makes most people happy, but more importantly, it spreads out the anger over a longer time.
Ultimately, the steps above will slightly increase uptake, but dramatically reduce the chance of ending up on the front page of hacker news. The latter is more important, it's burning chances with future customers.
Mailchimp's Mandrill is still the worst case I've ever seen. Cheap to host product, increased prices dramatically, with minimal warning, no opt in, and unsympathetic tone from C-suite. People don't forget when companies act like this. Also: don't use Mailchimp.