How Slack has successfully implemented their First Pricing Change -
The month of September was when Slack rolled out its first pricing change after the launch of the business in 2014. Slack made the announcement of its price change on a blog article in July. price changes went into effect in September.
In this post, we break down some of the strategies Slack employed to successfully introduce its updated pricing.
1. To justify an increase in Value
Slack started its announcement by explaining how they've increased the benefits of their service. The announcement immediately appeals to users' perception of fairness. Slack doesn't simply increase the cost due to inflation or an increase in costs.
2. Help Make the increase (And Your Pricing in General) easy to estimate
The app for messaging employs a seating-based pricing system, making it easy for users to determine quickly what the price increase can impact their spending. Slack increased their cost $.75 per user per month to monthly Pro plan users and $.58 per month per user for members of the annual Pro plan. If you know the number of seats you're paying for, you'll be able to easily calculate it.
Slack took advantage of this to further simplify its free plan by removing the 10,000 messages and five GB storage limits on free plans and limiting all access to 90 days.
Kurt theorized that their original guidelines made it difficult teams in determining when they would hit the limit. "Now I'm thinking 'Okay, got it. I've got 90 days if I need to retain the past. That's about the point where I'll need to upgrade to a paid plan."
Kurt explained how the simple pricing system makes it easier to not just understand pricing, but also to sell it "When you price based on things that people think like, 'I'm going to need to access the Excel calculator to figure out the exact amount that it will cost?' That's not great. It slows the discussion down."
3. Keep an eye on your global Users
Slack posted price increases that were in US dollars. However, they also provided an option to quickly see the price hikes in other currencies.
If you are dealing with customers that have different currencies from your default, make sure you communicate price adjustments for these currencies to ensure that they have an easier time calculating the cost.
4. Incentivize loyalty of customers
Slack provided an extension of the current rate to customers that renewed early for another year. The company even offered an incentive to switch from a monthly plan to an annual plan.