It's not so much as the money that's upsetting, as much as the broken trust when prices are adjusted upwards so dramatically. For example, our monthly prices will go from 0 to $99/month. You can say that may be a good thing, forcing us to focus on customer acquisition. But the point is that a service we budgeted X dollars for suddenly, dramatically increased. Of course $1200/yr is not life threatening. However, the trust is gone (or, at least it's dissolving quickly). As I wrote in my email to Chargify, if they're experiencing increasing costs, let us (their customers) know and be sincere - we are their fans! I WANT to pay them, because they have a quality product. But right now, it looks like a money grab after locking in developers. That part is upsetting.
Pretty sure you're dead wrong here. I am in the target market, and I'll still make money using Chargify, but it took me two years to get where I am. Starting from zero today, Chargify would make absolutely no sense to even consider.
If bootstrapped young startups aren't in Chargify's target market, then I'd argue that "the target market" was poorly chosen.
Why might the low-budget territory (with costs from $0-$30/month) be useful for Chargify to cover? Not because you'll make much money from that territory. In fact, you might, on balance, lose money on the people who remain in that group. However, everyone who starts there won't stay there, because some will ultimately become your multi-thousand-subscription core users a year from now. In other words, it might act as a "loss leader." This pricing structure, given the pricing structure of the competition, risks diminishing the wellspring of new users for Chargify.
Restated, my (testable) hypothesis is that (a) if you have similar competitors, and (b) you make yourself unpalatable to your low-tier users, then you will see reduced growth in your high-tier users. It looks like Chargify is willing to test that hypothesis.
Gotta remember that pricing is the hardest part of running a SAAS business. More often than not, you're going to get it wrong the first time, and maybe even the second time.
As much as Chargify's new prices are a turnoff, I understand their reasoning. I also understand the outrage. Any uptick in pricing is going to result in unhappy chatter on the Internets.
As someone working on a SAAS project, I'm doubly interested in this news.
1 - for keeping an eye on the competitive landscape for companies like Chargify and Spreedly.
2 - for looking at the side effects of pricing changes and the negative marketing impact
I have this feeling that when I finally release my product, I should price it slightly higher than my gut tells me to ensure that I reduce the risk of any price hike negativity resulting from unforeseen operating costs.
