How Slack Successfully Rolled Out Their Initial Pricing Change
In September, Slack rolled out its first pricing changes since the company launched in 2014. Slack made the announcement of its price change via a blog article in July. The pricing changes took effect on September.
In this piece we look at some of the methods Slack utilized to successfully introduce its updated pricing.
1. To justify an increase in Value
Slack started its announcement by describing how it has increased the worth of their platform. The announcement immediately appeals to users' sense of fairness: Slack does not just increase its price due to rising inflation or cost.
2. Help Make the Price Increase (And your Pricing In General) Easy to Estimate
The messaging application employs a seating-based pricing system which allows users to quickly estimate how the cost increase will affect their spend. Slack increased their cost $.75 per user per month for Pro plan members who pay monthly and $.58 per month for each user to annual Pro plan users. If you have the exact number of seats you're paying for, you can easily calculate it.
Slack used this opportunity to simplify its free plans by taking away the limit of 10,000 messages as well as 5 GB of storage limit on its free plans. It also limited all access for 90 days.
Kurt theorized that their original rules made it hard for teams to guess what time they'd hit the threshold. "Now I'm thinking "Okay, I got it. I have 90 days to decide if I need to retain the history. This is about when I'll require an upgrade to a paid plan."
Kurt described how the simple pricing system allows them to not only understand pricing but also sell it "When pricing is based upon something where people are like"I'm going to have to access an Excel calculator to calculate the exact amount that it will cost?' That's not ideal. It slows the discussion down."
3. Be Mindful of Your Global Users
Slack made public price changes that were in US dollars. However, they also provided a link to easily see prices in different currencies.
If you have customers who utilize different currencies to your standard, be sure you announce pricing changes in the respective currencies, so they have an easier time making the calculation.
4. Incentivize Customers to be loyal
Slack provided an extension of the current rate to customers that renewed early to the end of the year for a further year. They even fit in an incentive to switch from a monthly plan to an annual subscription.