How Slack Successfully Rolled Out Their first Pricing Change
The month of September was when Slack rolled out its first pricing changes after the launch of the business in 2014. Slack made the announcement of its price change on the form of a blog article in July, and pricing changes took effect in September.
In this article, we break down the various strategies Slack employed to successfully launch its latest pricing.
1. Simplyify a Rise in Value
Slack announced its plans by explaining how they've increased the value of its platform. It immediately appeals to the public's sense of fairness: Slack isn't just raising the price because of rising inflation or cost.
2. Create the Increase (And your Pricing In General) easy to estimate
The messaging application utilizes a pricing model based on seat, 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 per month for Pro plan members who pay monthly as well as $.58 per user per month for annual Pro plan members. If you have the exact number of seats that you're paying for, you can quickly do the math.
Slack took advantage of this to simplify its free plans by taking away the 10,000 messages and 5GB of storage on its free plans. It also limited the access period for 90 days.
Kurt believed that their initial policies made it confusing teams in determining when they would hit the threshold. "Now, I'm thinking "Okay, I got it. There's a 90-day window for me to save the past. That's about the point where I'll have to upgrade to a paid plan."
Kurt described how the simple pricing system makes it easier to not just understand pricing, but also sell it "When pricing is based upon things that people think like"I'm going to have to pull up the Excel calculator to determine what it would costs?' that's not great. It slows the discussion down."
3. Take note of your worldwide Users
Slack announced pricing changes that were in US dollars but included an option to quickly see the price increases in other currencies.
If your customers utilize different currencies to your default, make sure you announce pricing changes for these currencies to ensure that they have an easier time making the calculation.
4. Incentivize Customer Loyalty
Slack provided an extension of their existing rate for customers who renewed their plans early for another year. They even fit in the incentive of switching from a monthly to an annual plan.