How Slack Successfully Rolled Out Their first Pricing Change
This month, Slack launched its first pricing changes since it was founded in 2014. Slack announced its pricing change via an article on its blog article in July. The the changes to pricing took effect on September.
In this post, we break down the various strategies Slack employed to successfully launch its latest pricing.
1. Simplyify a Rise in Value
Slack started its announcement with a description of how they've enhanced the worth of their platform. It immediately appeals to the public's belief in fairness. Slack isn't just raising the price due to the rise in inflation or expenses.
2. Help Make the Price Increase (And Your Pricing in General) Simple to Calculate
The app for messaging uses a seat-based pricing structure which allows users to determine quickly how the cost increase impacts their expenditure. Slack raised their price $.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 are aware of the number of seats you're paying for, it's easy to easily calculate it.
Slack made use of the opportunity to streamline the free service by eliminating the 10,000 messages limit and the 5 GB of storage limit for free plans, and restricting the access period to 90 days.
Kurt theorized that their original guidelines made it difficult teams in determining when they'd reach the threshold. "Now I'm thinking "Okay, that's it. I've got 90 days in case I want to keep that history. At this point, I'll need to upgrade to a pay plan."
Kurt explained how the simple pricing system makes it easier to not just understand pricing, but also to sell the concept "When you price based on the perception of people that say, 'I'm going to need to access the Excel calculator to determine within $100,000 how much that cost?' That's not a good idea. This slows down conversation."
3. Take note of your worldwide Users
Slack posted price increases in US dollars but included a link to easily see prices in different currencies.
If you are dealing with customers that have different currencies from your standard, be sure that you inform them of price changes in these currencies so that they have an easier time calculating the cost.
4. Incentivize Customer Loyalty
Slack offered to extend their existing rate for customers who renewed their plans early for another year. They even fit in an incentive to switch from a monthly plan to an annual plan.