How Slack successfully rolled out their First Pricing Change -
The month of September was when Slack launched its first price change since the company launched in 2014. Slack announced its pricing change via an article on its blog posting in July. price changes went into effect in September.
In this piece we go over the various strategies Slack used to launch its latest pricing.
1. To justify an increase in Value
Slack announced its plans with a description of how they've enhanced the value of its platform. It immediately appeals to the public's sense of fairness: Slack doesn't simply increase the cost due to the rise in inflation or expenses.
2. Create the increase (And your Pricing In General) easy to estimate
The messaging app employs a seating-based pricing system, making it easy for users to determine quickly how much the increase in cost impacts their expenditure. Slack increased their cost $.75 per user/month for monthly Pro plan members and $.58 per month per user for members of the annual Pro plan. If you have the exact number of seats you're paying for, it's easy to easily calculate it.
Slack made use of the opportunity to streamline its free plan by removing the 10,000 messages and five GB storage limits for free plans, and restricting all access up to 90 days.
Kurt believed that their initial policies made it confusing for teams to figure out what time they'd hit the threshold. "Now I'm thinking 'Okay, got it. There's a 90-day window in case I want to keep the history. That's about the point where I'll have to upgrade to the paid plan."
Kurt explained how simplifying their pricing model makes it easier to not only understand pricing but also to sell it "When pricing is based upon things that people think like, 'I'm going to need to access an Excel calculator to determine the exact amount that it will cost?' That's not a good idea. This slows down conversation."
3. Keep an eye on your global Users
Slack posted price increases in US dollars. However, they also provided the option of easily observing the price hikes in other currencies.
If you are dealing with customers that use different currencies than your default, make sure you announce pricing changes in the respective currencies, so they are able to make a better decision when in calculating the price.
4. Incentivize Customer Loyalty
Slack provided an extension of their existing rate for 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 to an annual plan.