How Slack has successfully implemented their First Pricing Change -
This month, Slack launched its first price change after the launch of the business in 2014. Slack announced its pricing change on the form of a blog post in July. pricing changes took effect in September.
In this post, we break down some of the methods Slack employed to successfully introduce its updated pricing.
1. Justify With an Increase in Value
Slack announced its plans by describing how it has increased the worth of their platform. It immediately appeals to the public's belief in fairness. Slack isn't just raising the cost due to inflation or an increase in expenses.
2. Create the increase (And Your Pricing in General) Easy to Estimate
The messaging app employs a seating-based pricing system which allows users to quickly estimate how much the increase in cost impacts their expenditure. Slack has increased the price of their service to $.75 per user per month for monthly Pro plan members and $.58 per month for each user for annual Pro plan members. If you know the number of seats you're paying for, you can easily calculate it.
Slack made use of the opportunity to simplify the free service by eliminating the limit of 10,000 messages as well as 5 GB of storage limit for free plans, and restricting the access period up to 90 days.
Kurt theorized that their original rules made it hard teams in determining what time they'd hit the threshold. "Now I'm thinking 'Okay, got it. I have 90 days to decide for me to save the past. That's about the point where I'll require an upgrade to a paid plan."
Kurt described how simplifying the pricing process helps customers not just understand pricing, but also to sell the concept "When pricing is based upon the perception of people that say"Do I need to pull up the Excel calculator to figure out within $100,000 how much that is going to cost me?' It's not great. It slows the discussion down."
3. Keep an eye on your global Users
Slack announced pricing changes for the month of April in US dollars, but also included an option to quickly see the price hikes in other currencies.
If you have customers who utilize different currencies to your standard, be sure you communicate price adjustments in these currencies so that they are able to make a better decision when making the calculation.
4. Incentivize Customer Loyalty
Slack has offered to increase their current rates for customers that renewed early to the end of the year for a further year. The company even offered incentives to change from a month-to-month to an annual subscription.