How Slack has successfully implemented their First Pricing Change -
This month, Slack launched its first pricing change since the company launched in the year 2014. Slack revealed its new pricing in an article on its blog article in July, and the changes to pricing took effective in September.
In this piece we go over some of the strategies Slack utilized to successfully roll out its new pricing.
1. To justify an increase in Value
Slack began its announcement with a description of how they've enhanced the worth of their platform. This immediately appeals to people's sense of fairness: Slack isn't just raising the cost due to inflation or an increase in cost.
2. Create the Price Increase (And the Pricing of Your Services in general) Easy to Estimate
The messaging application employs a seating-based pricing system, making it easy for users to estimate quickly how much the increase in cost can impact their spending. Slack has increased the price of their service to $.75 per user/month for Pro plan members who pay monthly and $.58 per month per user to annual Pro plan users. If you have the exact number of seats you're paying for, you can easily calculate it.
Slack took advantage of this to further simplify its free plans by taking away the limit of 10,000 messages as well as five GB storage limits on free plans and limiting full access up to 90 days.
Kurt theorized that their original rules made it hard for teams to guess when they would hit the limit. "Now I'm thinking "Okay, I got it. I have 90 days to decide in case I want to keep the historical record. At this point, I'll require an upgrade to the premium plan."
Kurt described how the simple pricing system helps customers not just understand pricing, but also sell it "When pricing is based upon the perception of people that say"I'm going to have to open an Excel calculator to determine the exact amount that it will is going to cost me?' It's not ideal. This slows down conversation."
3. Be Mindful of Your Global Users
Slack announced pricing changes in US dollars. However, they also provided an option to quickly see the price increases in other currencies.
If your customers use different currencies than your default, make sure you communicate price adjustments in these currencies so that they can have a simpler time making the calculation.
4. Incentivize Customer Loyalty
Slack provided an extension of the current rate to customers who renewed their plans early to a new year. Slack even included an incentive to switch from a monthly plan to an annual subscription.