On December 14, 2016, my team and I pushed a significant change to our Easy Digital Downloads products: we increased the price on all extensions by 50-250%. Yes, you read that right: up to a 250% price increase on certain plugins. This change was done for a number of reasons, which I will get into shortly, and has resulted in a very interesting last three months. Since I have always been very open with my company's financials, I would like to now share some reflections on the change that we made and to also share some of the aftermath of the change.
The backstory
Since the beginning of Easy Digital Downloads, and I imagine many products, customer support has always been our biggest challenge. Taking care of customers is hands down the most difficult job in the company. It is ripe with challenging problems to solve, long hours, relentless flows of new tickets, on-going conversations that spread not only over days but even weeks and months. Providing good and, when possible, great customer support is, to put it simply, exhausting.
There have been many times over the last 5-7 years where I thought to myself I'm sick of this; I just can't keep taking care of these people, maybe I should quit. I have had those thoughts and every member of my team has had those thoughts. On one particular evening back in November, I was sitting on my couch doing my best to work through a not-abnormally sized support queue, and it hit me: this has to stop. This wasn't the first time I (and many other members of the team) had spent insane hours working through support queues, nor was it the 50th time. Working late to help finish support requests is an every single day occurrence. It literally never stops. This time, however, I had had enough (fifty times too many) and decided it was finally time to take drastic measures to reduce support. I hopped into our Slack channel and told my team this and within a few minutes we'd made a decision: it was time to increase prices. It was past time, actually, but late is always better than never.
When a company is faced with an over burdensome support load, there are a number of ways that most companies look to address it:
- Fix the bugs that cause problems to happen that then result in support tickets
- Improve UX so customers better understand how to achieve certain results
- Write more and better documentation
- Hire more support team members
- Move team members from non-support roles to support roles
- Outsource support
- Release fewer updates
- Release more updates
- Remove problematic features / products
All of these methods are 100% viable and our team has implemented all of them. There is, however, another method that people tend to gloss over or ignore, and it is perhaps one of the most effective of them all.
To lower your support load, all you need to do is have fewer customers.
It may seem like the opposite of what most companies want, after all customers are the people that make it possible for companies to pay their bills and their team members. Without customers, companies cease to exist.
The real answer to lowering support burdens is to have fewer but more valuable customers.
On that evening in November, my team and I decided it was time to try and drastically reduce our support burdens by dramatically raising prices, thus reducing the number of customers while simultaneously increasing the average value of customers. Theoretically this would allow us to keep our revenue about the same (which was just barely covering our monthly expenses) or, if all goes well, raise our revenue and lower the total number of support tickets we received each month.
That was the hope anyway.
The change
We threw a lot of numbers back and forth while discussing the possible changes we'd make to pricing. In the end we had several goals:
- Raise the average customer value
- Lower the number of customers, thus lowering the number of support requests
- Keep overall revenue steady or raise it
Due to the sheer number of plugins sold through easydigitaldownloads.com, there were a lot of different price points. We sold plugins as low as $6 and as high as $149. Our primary plugins were priced at $29, $49, and $82, and just one was priced at $149.
As a general rule, we came up with the following guidelines on picking new plugin prices:
- Plugins that power fundamental aspects of a store, such as licensing, multi-vendor marketplaces, subscriptions, etc, would be priced at the top tier of $199. These were previously priced between $82 and $149.
- Plugins that are priced at $49 (mostly payment gateways) would be increased to $89.
- Plugins priced at $29 (email marketing plugins and some other miscellaneous plugins) would be increased to $49.
- Plugins priced between $12 and $19 would be increased to $29. This was determined to be the lowest price point we'd offer.
- Bundles, such as the Core Extensions Bundle and the Digital Marketplace Bundle, would be increased according to the new value of the plugins included in the bundle.
In some cases, this resulted in plugins having $10 added to their price tag, and in others the increase was as much as $117.
The results
There are a number of statistics we can look at to help gauge the effectiveness of our price increase and we'll go over those shortly, but there's a non-scientific metric I want to look at first.
Team happiness and morale.
I do not need a psychology degree to tell you that the price increase has significantly affected the happiness and day-to-day mood of the team. For more than 12 months, our team has been faced with the problem that is Easy Digital Downloads. Yes, I mean that: the problem that is Easy Digital Downloads. You see, EDD is seen around the WordPress community as this great plugin that is wildly successful and a model to look up to in the commercial plugin ecosystem. While this is a reputation that we take great pride in, the honest truth of the matter is our team has struggled with EDD for months because in many ways it has felt like a sinking ship. We've seen stagnated revenue growth (even declines), higher-than-ever maintenance costs, relentless support queues, and a whole series of other challenges that our other two primary projects (RCP and AffWP) simply do not have. In comparison to EDD, those projects are cake walks.
The price increase has been enormously successful in making the team feel good, and the importance of that should never be ignored.
Support tickets
One of the primary results we needed to see in order for this change to be successful was a significant decrease in support tickets. It has now been three months since the price increase, so how've we done?
- New tickets submitted: down 0.2%
- Total tickets handled: down 43%
- Total customers interacted with: down 35%
- Conversations per day: down 42%
The total number of tickets submitted barely changed, but the other three statistics are incredibly significant. A 42% decrease in the number of tickets handled each day. That means EDD handled 10-15 fewer tickets every day, which translates to a considerable less amount of time spent working on tickets for our team. We have an average handling time of 5 min and 49 seconds per ticket, meaning we have removed one to one-and-a-half hours of support work per day by increasing prices.
Assume, for a moment, that we pay $25 per hour for support technicians. Removing 1.5 hours per day equates to approximately $37.50 in savings each day, or, when extrapolated out, approximately $13,687 per year in reduced support costs (if assuming zero volume change).
Revenue and sales
Along with a decrease in support burdens, we hoped the price increase would also provide a much needed boost to our monthly revenue. As mentioned in my 2016 in review post, Easy Digital Downloads operated at a loss for much of 2016, so increasing our revenue was an important measure on the success of the price increase. If we managed to decrease support and increase revenue, we'd consider it a home run.
To gauge the effect the price increase had on revenue, I decided to compare three different time periods:
- January to February, 2016
- August to September, 2016
- January to February, 2017
These time periods are good representatives of our average revenue as they do not include any special promotional sale periods and they allow us to compare similar periods from before and after the price adjustments.
The summaries below provide a good overview of the revenue statistics for each of the time periods used for this comparison.
January to February, 2016:
- Sales (including free): 3,861
- Refunds processed: 106 - $8,765.40
- NET revenue: $100,530.39
- Average order value: $28.31
- New paying customers: 664
- Average value for new paying customers: $131.30
August to September, 2016:
- Sales (including free): 3,930
- Refunds processed: 74 - $4,454.95
- NET revenue: $100,262.55
- Average order value: $26.65
- New paying customers: 565
- Average value for new paying customers: $116.57
January to February, 2017:
- Sales (including free): 3,009
- Refunds processed: 65 - $7,530
- NET revenue: $114,376.70
- Average order value: $40.57
- New paying customers: 373
- Average value for new paying customers: $154.95
There are a few primary changes I'd like to highlight here. First, notice that the NET revenue increased by ~$14,000 in 2017 compared to the two 2016 time periods. With that NET increase, however, the total sale count decreased significantly, by more than 800 in fact. This also resulted in our average order value increasing from $28.31-26.65 to $40.57.
The total amounts refunded also possibly suggest that higher value customers are less likely to request a refund, perhaps because they do more ample research before committing than lower value customers.
This change also caused our average customer value (for brand new customers) to jump up to $154.95 from $131.30 and $116.57.
We are only part of the way through March, but the numbers are already looking even better than January and February. This is partly due to the promotional sale we ran for the end of winter, 2017. We shall see if the remainder of March and April hold up with the trend so far.
The price change has also had an interesting effect on commissions amounts that we pay to 3rd party vendors. In 2016, we paid an average of $16,000 per month to 3rd party extension authors. For February and January, this average has dropped to a little over $12,000 per month. While this is not an overly positive change for most extension vendors, it is a change that we see as an overall positive change for our company. This change primarily happened because of a decrease in the total sales, though it is also due in part to us reducing the number of 3rd party products we sell through the site. We have repeatedly learned just how difficult running a multi-vendor marketplace is and, as a company, we've determined that is not something included in our long term goals so we have continually worked to reduce the number of 3rd party vendors we directly work with. I hope to share more on various changes we've made over the years that have affected vendor commissions soon.
When combining the increase in revenue with the decrease in support burdens, this price change has so far appeared to be incredibly positive for us. It is a single move that might just be one of the most important changes we have ever made.
Customer response
Gauging the success of a price change based on customer reactions provides some really interesting insights. Using customer satisfaction as a metric, however, is something you must be careful with. In much the same way that star ratings tend to highlight the most unhappy and, oftentimes, unreasonable customers, the customer reactions to price changes typically show those customers that are the most unhappy. It's unfortunately rare to hear from the happy customers or those that support your price change.
Within hours of pushing the price change live, we received our first reaction from a customer that who been considering a purchase during the time we were updating the prices:
Can you please confirm what is going on? How price jumped to the sky in a matter of seconds, I'm client of you and want to include multi-vendor option, it is even an effort to invest those 91 USD.
That reaction is fully reasonable, especially if he'd already added the items to the cart (our system could not account for already-in-cart items).
The second reaction we received:
Did the price of the Recurring Payments plugin really increase from $83.00 to $199.00 since January?? This was an unpleasant surprise. :/
Technically this was true, though with a brief explanation from Sean, her reaction completely turned around:
Awesome. Thanks for the explanation. I'll look forward to exploring the features.
This customer did end up completing her purchase and has not contacted us since.
So within a few hours, we'd had two negative reactions but one of them turned into a positive experience for both parties. Over the next few weeks, we continued to receive emails from customers reacting to the price change. Many customers, interestingly, asked if the price increase was some kind of error.
Is there an error on your website or did your price in the last week just over double in cost? I was looking at making a purchase when I just did a refresh and saw the huge price increase.
We knew we'd get a decent amount of flack for our price increase, especially as we chose not to alert customers (new or old) of the price increase before it happened. Whether this was the right choice or not, it was one we made intentionally. We felt there was a good chance that publicly mentioning our price increase before it happened would simply provide a place for people to pile negativity on us, and it would create a permanent record of that negativity for others to stumble upon. Doing it silently was like ripping the bandaid off in one fell swoop. It's done, it hurts, but then it's forgotten a short time later.
I still don't know if doing it silently was the right choice, but there were numerous customers that were irate because of that particular decision. One person's response was perhaps the most difficult to stomach. They started out perfectly reasonably:
I am in the process of renewing my plugin licenses again, everything looks good but I noticed that you’re now charging $199.00 (139.30 discounted) for Software Licensing? What is up with that?
I paid like $42 last year and certainly can’t afford to shell out $140 or more every year for a plugin. Not to mention the additional $40 every year for the other EDD plugins I’m using…
Please, tell me that a 200% price increase is some kind of mistake..
To that I gave a calm, collected, though perhaps too generic response, which really did not go over well, as can be seen by his reply:
Wow, so calm and collected.
Well, regardless of what YOU think about it:
1) It’s a 350% price increase (!!!)
2) It’s called gouging the customer
3) It’s called betraying all those people who got on board for 350% less, thinking that, even if the price increases, it will remain an affordable deal despite the annual renewals
4) You should grandfather existing customers at the original price instead of screwing them over
5) I expected much more from you, Pippin.
6) Maybe it’s time to create a similar competing plugin, sounds like it’s a very lucrative market, and would be much less expensive than getting screwed for a 350% price jack.
7) You won’t get away with it
8) It was a horrible decision
9) Even if I do renew this year, I’ll be looking for a complete replacement of the very overpriced EDD plugin suite that I have to keep paying for, over and over and over and over again.
10) Raising prices by 5%, 10%, or even 25% is reasonable. 350% is just greedy.
11) Do your current customers get 350% more value? Nope. They get the same old thing, only YOU benefit.
12) This list will be the outline of my next blog post
13) A textbook example of a bad move, how not to raise prices, and how to screw over your customers.
Seriously unbelievable move. I was all on board with you guys. Not anymore.
350% price jack = unbelievable gouging of your “valued” customers.
I could go on and on, but I’ll save it for the post.
I have had a fair share of people throw derogatory remarks my way, but this one was a bit different. This felt incredibly personal because it came from a person I've respected and looked up to for a long time. In fact, this response came from one of the very first people I looked up to in the WordPress community. Having them express their extreme displeasure at my decision to raise prices and method with which we chose to implement the change was painful.
It should be noted that we did grand father in all customers that had an active subscription (one that automatically renews). The only affected customers were those with manual renewals and new customers.
When you get these kind of reactions, it's important to keep a fact in mind: companies do not need to justify their prices.
Perhaps the most telling thing from all of the reactions we received was just how horribly undervalued Easy Digital Downloads (and similar platforms) are in many customers' minds. Here we had a customer that was seriously unhappy about paying $140 per year for plugins that provided the functionality they needed to operate their own store. Previously this customer had paid just $42 per year to run their store with EDD.
I've had friends, colleagues, and advisors tell me our prices have been too low for years, and I couldn't agree more. It is absolutely crazy that we're more accustomed as a society to pay $5 for a latte from Starbucks, which we will consume in a matter of minutes, than we are to pay $12-$20 per month for platforms that allow us to operate our businesses. We are accustomed to paying $80-$100 per year for subscriptions to Netflix and Hulu but we react with revulsion and disgust when a company asks for $150 per year to provide software that businesses literally rely on to bring in their own revenue. In the United States (where the customer above lives), we're used to paying $50-$100 per month for cable TV subscriptions, but we expect software to be provided for so much less.
As a world, we are better at paying for things that rot (figuratively and literally) our insides than we are paying for things that help us provide for the health and wellbeing of our families and employees.
This disparity in pricing expectations is asinine. Unfortunately, huge companies like Apple and Google have perhaps single handedly helped to create this through the rock-bottom prices of their respective app stores. Between the 1980s and early 2000s, it was common for video games, which take hundreds of hours to create, to cost $40-$50. This price was normal and expected. Once the app stores rolled around, however, expected prices dropped so low that companies now get practically eviscerated if they try and charge just $10 for a full length game in the Android or iOS app stores.
Quote from a review of Super Mario Run:
With a £7.99 price tag, Super Mario Run certainly isn't cheap, but it's easily one of the best smartphone games around.
Isn't cheap? Seriously? It's roughly the cost of just two lattes or one-three pints from many pubs, both of which are gone within a matter of minutes.
It's high past time software providers charge appropriately based on the value they provide. If we cannot even ask for a decent price, how can we possibly continue to build platforms that power the web and the world around us?
My final reply to the angry customer was lengthy and has served as a good sounding board as I worked through this reflection post. I ended with:
Perhaps our definition of "appropriate" is different, but the last time I checked, EDD provides me (with the ability to run my stores) far more value than any monthly TV subscription or coffee service. Would I pay $500-$1500 per year to operate the stores that provide for my family and employees?
Absolutely.
Perhaps it was my explanation of why we chose to increase prices so severely or perhaps it was the price disparities provided that convinced this customer, but they did end up sticking with us.
Thanks Pippin.
This makes sense, I understand where you are coming from.
I went ahead and upgraded. The renewal discount always is appreciated.
Thanks for the great response. Enjoyed it.
Going forward
At this point, we are very happy with how the price change has worked out for us and Easy Digital Downloads. We were happy enough, in fact, that we decided to implement a similar price increase on Restrict Content Pro and AffiliateWP, which went live on March 1, 2017, just a few weeks ago. We did end up making some adjustments to how we rolled out those price changes and so far the changes appear to have worked well. It is too early to tell just how effective they will be, but we are confident that it will prove to have been the right choice in 3-6 months.
Do you have thoughts or reactions? I'd love to engage with you in the comments.
Yes! I think the price increase is much needed. For the amount of value I get from EDD products it’s a no-brainer. People, these products literally make you money.
I’m sure we’d much rather EDD devs put more focus on developing great software rather than being bogged down with support. Keep up the good work!
EDD is absolutely worth every penny. I simply could not run my hosting business or develop the advanced functionality needed for client sites without EDD.
Andre is right – the amount of value EDD provides, and the fact that people run their entire business around it, makes the higher prices more than justified. Keep up the amazing work!
Thank you for the update. Not only does your logic make perfect sense, it mimics what happened here. We found that low prices invited undertrained and over-needy customers who expected support that stretched the limits of good will into resentment and cost overruns. That immediately changed after dropping lowest tier packages. Yes, there was a backlash, and plenty of second guessing on my part. But we are more profitable and a better team, and our best customers stayed with us. I only regret not having done the same earlier. ☮️
That is exactly what we have found as well.
Hi Pippin!
I support your decision, it’s a fair change in the prices and even with the raise, I would say it isn’t expensive.
As you said, we are used to pay for really expensive things without even asking (entertainment, mostly or a brand new iPhone) – it’s just non-sense wanting a tool that saves you from hours of intensive coding/testing/reports for a few bucks.
All the luck and I really hope this improved your team’s daily workload!
Keep up!
Your prices are still very fair. If I consider how long it would take for me to build an e-commerce solution on my own, it would probably take months (if not years) to come up with something functional yet still not be as good. A few hundred dollars per year is a small price to pay so that I can focus on actually selling my plugins instead of “reinventing the wheel”.
I’m guessing you’ll see your support volume decrease even more a year from now. You still have “lower value” customers with active licenses from last year, who may get weeded out by this time next year.
BTW, your support team has always been top notch! Keep it up!
We should compare notes + and angry customer responses. 😉
I am part of those that considers Pagely to be very expensive 😀
I was at first a bit surprised when I renewed Software Licensing recently at $140, but in perspective, it’s a small cost for making online sales work. I think I currently have < $200/year in EDD software that helps me sell product. If I add in the other software I buy annually for my websites, it's still under $500/year.
Even with hosting costs and HelpScout, I currently come in under $1000/year to have a shop that sells product and works 24/7. I can cover that cost with 20 sales at $50 — that's less than two sales/month.
Nobody likes it when prices go up, but they do. Rain is wet. Sun is hot. Politicians lie. Interest rates fluctuate. Prices go up.
Personally, I'm just happy that it means EDD will still be there next year so that I can keep making sales.
> I’m just happy that it means EDD will still be there next year so that I can keep making sales.
I think this is a very important point that wasn’t mentioned. With out a price increase, the project could disappear. What would THAT cost customers?
Well, this is pretty inspiring. You make some great points and go well into detail. Basically I struggle with the same issues at the moment, and thinking about a price increase for quite some time now, but as probably know this is not an easy step, at least not for me. There was some fear that sales completely drop but your shared insights really helps to better understand how a price increase could work out and finally “re-vitalize” the whole team/company/business. It should definitly be considered as a win-win. Thanks for sharing
Any data from RCP and AF?
Not yet, it’s too early to tell.
The whole WordPress industry needs more of this thinking. Thanks Pippin!
Pippin-
Another great post, and one that strikes a chord with me.
In the same day we had one customer express displeasure over an increase in the price of a renewal (an increase made roughly 15-months ago…) we had another potential customer confused as to why we were priced so low given that they were used to paying $10,000 per year for their current learning management system.
Finding that “sweet-spot” is tough to do, especially when factoring in international customer expectations against the U.S. dollar (as your one example clearly demonstrated).
I firmly believe that a business must raise prices over time to continue serving both current and future customers effectively. As a product becomes more popular, so do the support demands, and well – employees require capital.
You mentioned that a business doesn’t have to justify their prices. I agree for the most part.
Funny thing is, I think EDD has fully justified its price increase by the commitment and innovation it has continued to show to its customers over the years. So, while not explicitly stated, your day-to-day operations have justified it.
Again, great post and stay well.
Kindly,
Justin
Very interesting story. I think the price is fair in comparison with the value that EDD gives to its customers. It takes years and thousands of dollars to build a similar product. I think the businesses, which are the main customers of EDD will be okay with this decision.
What some customers don’t realize is the direct impact EDD has on their businesses. Obviously, they acknowledge EDD is the backbone of their store from a pure technical perspective, but they don’t bother figuring out the exact (positive) impact it causes on their business.
Say someone is paying $500 a year on EDD to keep their store running. Aren’t they making that money back in a whole year? Yes, they have other expenses, but if they believe EDD in their case it not paying for itself, I wonder if they should use it at all.
@Pippin, do you have a customer persona? If you do, you may have the minimum yearly revenue the ideal EDD customer gets defined there as well. I think that will be a key driver to EDD fate.
In my 2016 in review post, I mentioned that EDD’s average customer value was $128.69. I’m not yet sure where the ideal number is, but it’s higher than that for sure.
Oh, sorry I didn´t make myself clear.
I meant the revenue which EDD customers make.
Some EDD stores make $100 yearly revenue selling digital items. Others make $100K.
In other words, I believe you want to surround yourself with customers who make a reasonable revenue figure and subsequently feel extremely comfortable paying a premium (and very fair) price for EDD ecosystem, as opposed to customers who are (sadly) struggling to hit the $1K yearly mark.
We are going after the larger stores for sure. They are not only the more valuable customers, they are also the easiest to support and maintain good relationships with.
Very courageous move, I can hardly imagine the emotional stress you’ve been through handling customer displeasure. It was a bold and inspiring move, I totally agree.
I also support your move regarding RCP and revisiting a product from the ground up, instead of silently abandoning it, a challenge we, as theme authors are often faced with.
I am now following a similar approach to old themes, and instead of retiring them as products, me and my team are re-building them and reasonably adjust the pricing.
Thanks for the insightful post!
Cheers.
To be frank, i was very surprise when i saw the price increase when renewing my software licensing and EDD recurring extensions.
I think the price increase justifies the value of your plugins. I can’t imagine running my digitial store without EDD.
“Sticker shock” was a pretty common reaction for a lot of people. No one likes to see a higher price tag than they were expecting. In retrospect, I think we could have mitigated a lot of that by emailing existing customers ahead of time to alert them of the impending change.
I always appreciate the amount of detail you provide on posts like this – regardless of it’s one around a change in the business or a year in review.
Showing both the positives that come with and the negatives demonstrates the true nature and challenges that come with this and it’s an extremely “real” perspective of what you’re dealing with.
You and the rest of the EDD team are great people and are people who are respected, admired, and looked up to (regardless of what a fraction of what some of your responses to the price hike might show – I mean look how many remain silent and continue to pay).
All that to say, the EDD team does fantastic work, embraces challenges, evaluates them, chooses what’s best for the business (and those who make *up* the business), and moves forward.
Keep up the good work. There’s a lot of us who are fans and who *consistently* endorse your products even if you don’t hear from us directly. ?
This insight alone might be worth the price increase!
Hi Pippin,
Thanks for sharing; kinda fun how we’re all going through the same stuff.
Pricing is a major lever that influences a business overall strategy that leans toward exclusivity (high price) or ubiquity (low price).
A couple thoughts:
– How do you think these numbers (specifically Net Revenue) are affected by the automatic renewals that began on January 21st and not the price increase? There are several ways to look at this but if you compare the revenue from new customers in 2016 (~$87,000), compared to 2017 (~$57,000) that means you had a drop of $30,000 from new customers. You had to make that up, plus the extra $14k so is that $44,000 are renewals in 2017, what were they in 2016? (I hope I have that right)
– When prices change, it takes people a little time to adjust, but they often come back around to the current market price. You might see some of that happening now (hopefully).
– We’ve raised prices several time and will do so again. We’ve found that giving people waring is empathetic for the customer and profitable for us.
I find this fun and fascinating; especially when you consider comparing (or even benchmarking) the performance of our WordPress businesses to publicly traded software and SaaS companies.
These numbers weren’t affected by automatic renewals in any way because EDD hasn’t started processing auto renewals yet. AffiliateWP started processing auto renewals on January 21st; EDD doesn’t start until next week.
The auto renewals for AffiliateWP have had a significant impact there, so I hope to see a similar affect in EDD starting next week.
Thanks for the clarification. So, did the differential come from existing customers?
Here’s some additional stats:
Between Jan and Feb, 2017, $36,387.70 came from license renewals. $1,701.10 came from license upgrades. The rest came from new customers and/or existing customers that bought new plugins.
The WordPress community as a whole charges too little. For a platform that powers 27% of the web, the total revenue is probably only a few hundred million.
First of all, the highest amount of kudos possible to Pippin for sharing not only his thoughts but also his inner workings, it’s good to see that kind of transparency in business.
I do though have some nagging doubts. It’s like watching one of those quiz shows where the contestants answer most of the questions right and win some good prizes but then right at the end the host says, “ah but here’s what you could have won …”
For any prospective business owner wanting to sell on the internet, the self hosted WordPress choice largely comes down to EDD vs WooCommerce.
I think in years gone by it’s been fair to say that WooCommerce has been winning many battles with them being a more ‘household’ name, first to maket and it’s fair to say that they’re a well oiled machine.
Of course they now have new owners so it’ll be interesting to see where they go from here. I do think raising your prices so you’re going more head to head with them is a huge mistake.
How many folks with a WooCommerce site are going to make a swicth over to EDD? Well let’s look at some figures. A quick glance on Themeforest reveals 5,347 WooCommerce themes vs 180 for EDD, so it’s fair to say that your choice of themes are going to more limited if you make the change.
Pricing? Well how many webshops use Stripe? A heck of a lot. What’s the pricing on this most fundamental add-on?
Woo = free
EDD = $89
So whilst Woo were taking their plugin into free mode, you’ve hiked the price on yours. Bad move. Seriously, that’s a roadblock for a lot of people straight off the bat.
I can start a basic Woo shop and take payments in PayPal and Stripe right from the get go for free. With EDD it’s going to cost me $89. I mean I accept your skinny latte example and $89 is small change in the grand scheme of things but it’s still $89. I wouldn’t go buy a coffee from Starbucks for $20 when I can go to Costa next door and pay $5. It doesn’t make sense.
Mailchimp is $49 in both places. Your checkout field editor that I see a lot of is $89, Woo’s is $49. PDF invoices is $29 vs Woo’s $89 so it’s not all bad news but like you’re charging $49 for a shipping plugin when it’s baked into Woo from the get go.
Your advantage was always your pricing. You’ve just given it away. There’s little to no incentive for existing Woo customers to move across to EDD with all the technical aggravation that will cause. And for newbie website owners they now have to make decisions that are not factoring price into the equation. You’ll lose more times than you win.
There’s also the elephant in the room that is Shopify. $29/month including hosting and no aggravation such as having to mess about updating all the plugins. 24/7 support. That’s your competition right there. I see more and more of our customers migrating away from WordPress altogether towards these kinds of solutions. It makes good sense to be able to run a shop without hassle, for small business owners it means more time being spent on the customer and marketing without faffing about updating a plugin that’s just broken your sidebar widget. You need to be capturing this traffic and encouraging them to stay with WordPress and make the move to EDD. All you’re really doing is pushing them out the door. Once they’re gone they’re gone.
Sure we all need to make a living and if EDD isn’t self sufficient then you need to react to that but I have strong doubts this is the right move.
The other elephant in the room is trust. When you lump the prices up by 340% you make people think twice about getting locked into EDD or any of your other products. What will next years price rises look like? Or the year after, or the year after that? When you want to lose some more customers how much will you raise the prices again?
I think people can accept that prices will change over time but that’s a kick in the nuts. Sticking with EDD is like saying well you’ve kicked me in the nuts once, but I’m going to hang around and see if you do it again. I think the guy who sent you the mail above with his 1-10 points on it had it pretty right if I’m being honest, I wonder if his tone softened because you gave him a discount … ?
No, sorry Pippin. You’ve screwed up on this one no matter how many of your fan club above enjoy paying more for the same cup of coffee.
Thank you for your thoughts and comments, John! I sincerely do appreciate them!
That may have been true in a small part, but that was never an intentional advantage that we crafted. Our focus has always been selling digital products and only selling digital products. That’s where our advantage lies and has always laid, not in pricing. That’s also precisely where we will continue driving this ship.
We did not offer him a discount of any time. His tone softened because he realized that everything we’d done was justified and made sense, from all angles.
Let me ask you this: what do you believe we would have won had we chosen not to do this?
I happily accept that not everyone agrees with my decision here, and that’s perfectly fine. I do not write open posts like this to get slaps on the back or words of encouragement. I write about the decisions made in my company as a way to share our experiences in a hope that they help others in their own adventures. If you read this and think “wow, I’m never going to do that” that’s great! If you read it and think “okay, I see the value there” that’s also great!
At the end of the day, the real determining factor will be how this change affects my company in the long run. My prediction? We’ll be 10x stronger, better, and more focused because of it.
Since we are talking about elephants in the room…
Do you know WHY the PayPal and Stripe extensions are free for WooCommerce? Do you think it’s out of the kindness of Automattic’s heart? It is not.
The PayPal and Stripe extensions for WooCommerce are free because Automattic gets a percentage of every single transaction that is executed by users and their customers via the WooCommerce PayPal and WooCommerce Stripe extensions. Every. Single. One. Of. Them. Not only that, but they are able to use Automattic’s clout in the industry to get a higher rate on this revenue share arrangement than a smaller software developer would be able to get.
This is why those payment extensions are free yet the other WooCommerce payment extensions are not.
If it weren’t for the fact WooCommmerce had economies of scale and great deals with PayPal and Stripe they would most definitely not be free extensions. From a support standpoint alone they wouldn’t be sustainable. It’s only sustainable because of the fact they get kickbacks from PayPal and Stripe, this allows them to make them free, which in turn increases their transaction volume, which in turn makes them more money from the revenue sharing.
Small software developers like Pippin and EDD don’t have this luxury. They have to charge more and differentiate their offerings from that of the competition or they’ll run themselves into the ground both mentally and financially.
What happens when a big business runs all the small businesses out of the marketplace? The big business then gets to capitalize on this by charge whatever they want and the consumers will just have to suck it up and pay it. It also means less choice and less innovation. None of which is a good thing for consumers.
But I shouldn’t have to tell you this because you sound like you know everything anyway. Which begs the question, who are you exactly? What successful product business have you run? What is your experience running a successful software business, or any business at all?
I ask because all of that matters when you are dolling out advice on business. And from where I sit I can’t find any information on a “John Epps” as it relates to successful WordPress businesses, or WordPress as a whole. So I can either assume you don’t have the experience and success to back up your statements and opinions on business OR you don’t have the balls to say them using your real name. Which is it?
Truth be told, I’ve never once experienced any degree of blowback from any direct site owner when recommending they purchase RCP, EDD, AWP, or Gravity Forms for that matter. Not before or after price adjustments, including Pippin’s latest.
The only people who pitch fits are nickel and dime, kitchen sink theme enablers who gut prices to slam sites together and hire out for anything remotely technical.
I described them early on as the 10% of customers taking up 90% of our time.
We put up with them for three years, and they sucked the joy, productivity, and profit out of the business. I wish I had priced them off our services much earlier. I lost good team members and nearly my will to operate because of it.
If we can provide outstanding service and support, and raise per customer hour revenue by not having to deal with the kinds of soul killing clients I let us get sucked into before, I say thank the forces of (insert yours here).
I evaluated exactly the choice between WooCommerce and EDD when I set up my shop.
I build websites based on WooCommerce as part of my living, so I know a fair bit about WooCommerce. I even build extensions for WooCommerce, and heavily customise it through hooks and filters to meet client’s requirements. I know this animal well.
I chose EDD for my shop because of what it does, not what it costs. EDD is a better fit for digital products (IMHO). Performance was a factor too; EDD lets me host a shop on a smaller VPS than I’d be happy doing with WooCommerce.
Not all cost is in dollars.
Is it cost effective to have a monthly subscription service like Netflix? Thanks.
Yes it can! Tons of majorly successful companies are based on monthly subscriptions.
Wow I don’t think I’ve ever been cyber stalked before, I guess I should be flattered. Bit of a creepy thing to do just because I disagree with a post on a website though don’t you think?
As for WooCommerce. If they’ve negotiated a deal that means that they’re able to give their customers the Stripe gateway plugin for free then that’s great news. Why would I not be happy to save money?
As for monopolies then yes, for sure I’m against them in principle. They usually lead to prices going through the roof … 😉
I’ll leave it at that, I can see from Mr Hancock’s behaviour that comments which disagree are not welcome here. I was just trying to give you your customers persepctive which to be honest seems to be a little lacking in some of the comments. You might have customers that understand the price rises but you’ll have few that are doing cartwheels about it.
Good luck with your plugins. I just think you’ve made a mistake with the pricing. I’d be more than happy for you to prove me wrong though 🙂
I welcome all opinions here, in agreement or not.
My comment has nothing to do with agreeing or disagreeing with anything Pippin has said.
When expressing an opinion or giving advice on any subject, not just things specifically related to this blog post like pricing and business models, the experience of the person giving the opinion as it relates to the subject at hand matters greatly.
You are giving your opinion and advice on software product pricing and business models (free vs. paid) in these comments. Therefore, I don’t think it is out of line to ask who you are and what you have done as it relates to this topic.
Carl, while I deeply disagree with Pippin’s pricing change (though I’m grateful for him for sharing the logic behind the move), I have to agree with you about people using their real names. John Epps should be linking to his own site before throwing dynamite around.
While talking about pricing, what finally got us on the GravityForms train was that you chose to have a single stiff fee up front, included all the extras in the package and the renewal fee is very reasonable. If you keep up the good work, we’ll be customers for as long as we work on WordPress. GravityForms sane pricing policy is a credit to you and asset to your business. I can’t recommend GravityForms highly enough. Carl, please don’t change your pricing model. You have a good one which is keeping your customers happy and quietly making you wealthy.
EDD Pricing Change
We’ve spent thousands on Pippin’s software and not required much support. We’ve been mainly happy with support (1). I count another four or five support requests over three years across three major product lines and three minor products we own. That’s about $500/support request. This is just to say not all customers are creating a lot of support requests.
The main selling point for us over WooCommerce and to our customers were the reasonable maintenance costs for EDD. WooCommerce offers ridiculous pricing – it’s sad to see Pippin chasing the market leader. We were offered lots of ecommerce projects and always sold EDD to our customers for the reasonable maintenance costs. Pippin has made liars out of us. I feel like I’ve deceived our customers. Our clients could have gone with WooCommerce and enjoyed the larger platform and more robust support infrastructure (there are lots of venues to talk about WooCommerce, there’s lots of third party stuff well-packaged).
Pippin had a lot of other options than gouging those of us who’ve helped him build his business.
Other options to increase revenue and/or control support load
He could have added a pro support option as we’ve done for our pro video plugin. “Yes, but support is included with a plugin purchase and updates,” I hear you say. Yes, it is. Email support. When customers go beyond asking for email support for plugin features and require hands on training or even manual intervention on their websites, that’s not support. That’s web development. We went into the product business not to do more web development for far less money or free but to sell products.
It remains that customers do need the extra help. Those who don’t have the technical skills (our FV Player is easy to use for everyone and the advanced features and API are easy for web developers but difficult for normal publishers) can always get hands on help from FV. But at a price. The price is ridiculously low in fact (our pro support incident is $70). In exchange you probably get an hour of hands on development and support from a developer who normally cannot be booked at less than $200 hour (as it’s our product we use the pro support incidents to improve documentation and simplify processes so we offer a discount). A pro support incident covers one issue but we’ll stretch to cover 1.5 where we can.
What additional hands on paid support does is threefold:
– it sets boundaries on support
– it makes customers think for themselves and read documentation before requesting extended support
– it makes it easy for those who need the extra help to get it
– it allows one to price one’s product attractively to make it available to a wider audience
In the beginning with WordPress we were all here to share free code with one another, to democratise publishing. As true open source advocates, our revenue was supposed to come from service work. Our model with lower prices and paid support is much closer to where we all started.
Pippin is a giant among us for creating some very high quality code systematically with good documentation. At the same time, he maintained customer friendly pricing. He was a model for the WordPress development community. To see him join the price maximisation crowd really makes me wonder what it is that makes WordPress special. Not much at this point. It’s slow and insecure by design (caching and security should be built in up front). The development pace is absurd, breaking publishers and small business sites willy nilly for dubious enhancements. Almost all good quality code is going commercial or freemium. There’s very little free left.
The goal gentlemen is a higher one. It’s to democratise publishing. Alas I don’t see anything in Pippin’s pricing change which advances that cause.
There’s one support incident which left us deeply unhappy (we offered to help fix broken automated backups in AffiliateWP brought on by SQL views). Pippin just kept this ears closed even though we could have fixed the issue for him and his team. The issue remains unsolved which is a pity as we could have solved it. In any case, Pippin’s biggest support load from our company has been an offer to fix a major failure.
Last paragraph of previous comment should be preceded by an hr break and it should come with a number one in front of it. I created the footnote style using a numbered list (ol doesn’t work in Jetpack comments (I see). My comment was broken into two sections as the fancy quotes were causing a security failure which I tried to solve by breaking the comments into pieces (I thought it might be a length issue). Anyway, my apologies for the strange formatting. There’s no way to go back and edit a comment. A preview button would be great. Perhaps something besides Jetpack whether our Thoughtful Comments or Postmatic.
A big thanks to Pippin in any case for hosting such an lively and important discussion.
Alec,
Would you be willing to share an example of why you feel the new prices are gouging? I’m going to specifically request that you refer back to my price comparisons of monthly subscriptions and drink items that I made above?
I agree fully that when you compare our new prices to some of the existing plugin prices on the market, they can seem high (that was not unintentional), but that does not in itself equate to the same thing as gouging.
I am running WordPress plugins development studio (much smaller then EDD and other Pippin plugins), and I completely understand the reasoning behind the price increase.
Problem with current WordPress plugins (and themes) pricing is that most users expect low prices because large markets (like Envato’s ThemeForest and CodeCanyon) have set very low prices in attempt to drive large number of sales. But, the more you sell, more support is needed, and in the long run, support and future development is the most expensive part of running a plugins/themes development business. Large market that doesn’t actually create products or support them directly has the interest in large sales volume and they don’t care much about the continuing support someone else has to provide.
And, I think that many negative comments are product of this tendency to sell more at any cost (and no cost is too low). We are not creating spoons or forks, we are developing complex software that requires constant maintenance, improvements, support. To do it properly and to provide best quality to customers, that requires pricing that can cover all that and leave enough to drive development and to ensure that plugins and themes will remain active in the future and that customers can rely on them to grow own businesses.
Large number of plugins and themes on Envato markets are abandoned by authors because the low prices can’t cover the future development and support. In the end, customers are left behind because the whole system is based on prices that can’t sustain future development and support.
Stablity is the most important thing. If I as a designer/developer want my set of tools to be around for as long as possible, then I’ll pay. Generally plugins are too cheap and that’s the concern.
I was lucky enough (this is always the way with me lol) to buy the plugin a day or two after the price increase (RCP) and before the 20% discount offer. Nice eh?
However, I don’t care… I’ve made the lifetime account cost back on the first project I used it on. 20% means very little. So I was happy.
I’ve always appreciated Pippin’s approach to business being, at it’s core, a non zero sum game.
This understanding forms the root of my knowledge that John Epps ain’t right.
Both in doubting his dissenting opinion being welcome on Pippin’s site and in thinking the price increase is the iceberg to Pippin’s titanic.
I see EDD blooming beyond the 24th century.
EDD may be worth its price – old and new prices alike – yes, and I certainly believe in the product. However, I fully agree with those customers who complained about the price increase. Such a high increase – silently – is something a company should not do at all. It’s just really bad customer service in the end. And laying out those negative reactions of customers in a blog post which serves “explaining”/ fighting the price increase doesn’t make it any better.
I’ve bought a lot of products in the WP ecosystem so far, and I experienced a lot of price increases over the years, but in most cases I was grandfathered in as an existing customer or I got special offers for a limited time and had enough time to think about all consequences. Ending up with higher prices, but no info all around must be really a burden. I never want to experience something like this.
No one likes price increases as a customer. Period. But the practices laid out in this post really making me think if something may be starting to go wrong a bit in the WP ecosystem?!?
And so you don’t get me wrong: I have a business myself and currently working as head of customer support for another company — I do know both sides of the thing here very well.
I appreciate the feedback, David!
In case it was missed in my post above, we did grand father in all customers that had active subscriptions. No active subscriptions were affected in any way and those keep the previous price forever, so long as they remain active.
Hi Pippin!
I must somehow really missed this piece about grandfathering in existing subscriptions – sorry about that. That shines another light on it for me 🙂
Thanks, Dave
As someone who has purchased nearly every plugin you’ve built, both for personal and client projects, as well as someone who has done support for commercial plugins and themes, I applaud your decision. I can understand why the average end user may not see the driving forces behind price increases, but I’m thrilled you recognized that EDD support was a source of burnout BEFORE your team got fed up and ran away screaming.
In my experience, clients who don’t see the value in paying for well-coded, well-supported products either (1) don’t anticipate enough sales to justify paying, which makes me question why they open a store if they don’t intend to make money, (2) are just inherently cheap or entitled and will suck the souls out of your team members, or (3) aren’t working with a developer or other professional who has properly explained the value of what they’re getting.
Between EDD, RCP, and AWP, I’ve probably opened more tickets with your team than every other plugin I use combined. Support is something I generally don’t need, but when I do need it, there’s a problem or a gap in my knowledge and I need an answer ASAP. I’ve never waited longer than maybe overnight for a response. I’ve received answers that go above and beyond. I’ve seen documentation updated on the fly because something was not 100% clear. I am happy to pay a premium for that type of support. People will always compare EDD to Woo, but if they’ve ever opened a ticket with the Woo team, they have to see the difference between the replies they get from your team members vs. the generic (and usually irrelevant) answers they get from Woo support.
I can’t wait to hear how these changes take shape in the long term, and I appreciate your transparency as always. Don’t let anyone make you feel bad for doing what’s best for your people and your business!
This is something I did last year. Of course at a much lower scale being a 1 man only company and with much less % increase so I totally understand the change and I really appreciate the transparency to communicate it as you always do.
On the other hand as a customer it hurts a bit to pay more than I pay for my phpstorm license 🙂
I have some more numbers for you from the other end of your ecosystem.
As you know, my Stocky theme requires EDD and has built in styles and support for a number of the EDD extensions. I implemented a mere $3 increase in December. Using the same months you used above, the sales (minus refunds) were:
January 2016 – 28 sales – $1321.60 + $133.56 EDD affiliate = 1455.16
August 2016 – 30 sales – $1416.00 + $75.14 EDD affiliate = 1491.14
January 2017 – 24 sales – $1200 + $202.61 EDD affiliate = $1402.61
Obviously I don’t have as large a pool as you, but it looks like sales are down, but with a bit of increased earnings from affiliate sales it balances out.
I’d also like to note I have had an increase in refund requests that note the price of plugins as too expensive. Users seem to be coming in on the ground floor, buy the theme, and then rethink it when they realize they need to spend 500% more on plugins than they did the theme. In fact, this one came in a few hours ago:
> I see much of the functionality is not available without spending a considerable amount more. I think your theme could be a great option but at this point I don’t have the capital to invest to meet the needs of the project. I purchased your theme an hour ago, can you please offer a refund as I am not going to use the product for my project.
Perhaps I’ll bump the price up a bit more… Though I don’t know about 250%.
Thanks for sharing, Jake!
Theme Forest customers typically seem to be the lowest spenders so that reaction does not surprise me too much. I’d be really interested in knowing if increasing your own theme’s prices mitigated those kind of reactions.
I hate hearing that changes on our end have a negative impact on developers and designers earning a living (all or part) from their own EDD products, but at the same time we have to ensure we protect ourselves, otherwise we cannot benefit anyone.
If you ever have any suggestions that you’d like to share that would help reduce our impact on you (and others), I’d love to hear it!
Having made over $100,000 selling my plugin via EDD and Software Licensing over the past 5 years, I think the few hundred dollars I have spent on it has been the best investment. Pippin has always provided great support over the years and that alone has been worthwhile.
I have no problem with price increase, but IMO any preice increase should alo reflect in quality and frequency of updates for some extensions.
ATM I’m testing WooCommerce in order to replace EDD. Their Vendors plugins has way more updates than FES.
If FES will be better I would be happy to remain with EDD, but we’ll see.
Thanks!
Major updates are coming to FES very soon 🙂
Awesome work Pippin & team and thanks so much for sharing. Keep it up and you customer support is the best in the world in my opinion and well worth any price!
No question, price increases are going to create some pain and friction. But it’s not in EDD users best interests to have EDD go under. Sustainability is a big deal for businesses that use EDD, and it fundamentally rests on EDD’s sustainability. Thanks for creating and supporting a great suite of products to enable ecommerce.
Hello Pippin,
No one is entitled to tell you how to run your business or price your products. However, I think you have missed an important way of reducing support cost, which by the way was implemented in the past since I am a customer for a few years: Support forum
Large companies like Goggle and Microsoft pay less for support by letting customers help each other. These forums are very important because they also let you anticipate issues faced by others. However, at some point you decided to cancel the forum. You probably had valid reasons but you may want to rethink about it now. To me it was very useful.
At the end of the day, if someone is going to start an online store with the aim of making 100K sales per year an upfront cost of $49 or $149 makes no difference but the problem is that people try many solutions and cost accumulates. I must say that I was lucky and I tried your solution (RCP) first which was OK for my limited business but it has ways to go to serve more complex settings. For example, allowing multiple subscriptions with different expiration. Looking forward to that. Right now I am using clumsy schemes to do that. You understand…
In addition, the login redirect should be an integral part of RCP and not some different plugin in my opinion for all users. The more complete the solution, the more justifiable any increases. But the pricing is your business. This is a free market. But you may want to reconsider the forum.
Good luck.
Thank you for the feedback!
We actually had a public support forum for Easy Digital Downloads for nearly three years. It was closed down last year. Here’s a couple of blog posts about it:
https://easydigitaldownloads.com/blog/changes-to-our-support-system/
https://easydigitaldownloads.com/blog/retiring-old-support-forums/
It may seem counter-intuitive to many, but our support costs (financially and mentally) actually decreased dramatically when we closed the forums.
One of the best aspects of a support forum is the idea of community members helping others. Unfortunately, this isn’t really the norm. While this certainly happens, it’s actually far more rare than I think many realize. Mostly a support forum is managed by paid team members with a few occasional helpful community members that answer the odd question here and there.
One of the downsides to a support forum is also the lack of control it gives a company over the support experience, which matters a very great deal. The moment a company leaves it up to community members to answer questions, that company’s reputation is also largely left up to those community members. Sometimes this works, sometimes it drastically hurts the company.
Love your software, love your posts, and it was all too cheap before. People do not value products when they are too cheap, ask Apple – thats why they call it a value proposition 🙂 It is about value not cost and a brand is built by the customer loyalty that is maintained at a higher price than the sum of its inputs or parts. Look at Woo Extensions /Plugins are they cheap no, are they great and properly supported, robust and reliable and the choice of serious ECommerce folks yes. EDD is the leading brand for Downloads because it also the best. It might have been a pinch point with the silent launch but the value of what you folks do is indisputable. Heck actually I don’t want it to be too darn cheap, or the end customer thinks it is all darn too easy and it is not. Time you were earning more than chicken feed from it all. It makes me wince when I see people moaning about paying for premium plugins. Would they give away what they do for a living…KEEP GOING PIPPIN – you deserve it. Seeing Cid and Tony cash in on Sucuri with GoDaddy, good for them another great team of folks who deserve what they have built. 🙂 Shame it is GoDaddy though… Good luck all and THANK YOU PIPPIN again.
I’m really glad you raised prices and flipped on auto-renew. I want EDD and those who make it to be in tip-top shape, long-term.
Thanks for sharing how this has worked out for you so far. I am sure it will give others confidence to experiment with their own pricing.
It’s fine Pippin. You know we have to have EDD and all the frills to sell our plugins.
Just don’t let it happen again.
At least not for a year or so….AFTER we renew our subscription…then you can raise them again.
Thanks for taking the time to go into so much detail. The only issue I have is with not posting something like this BEFORE the changes, because the normal first reaction is to feel like one is being cheated. As this comments thread shows, most people who are your clients get it, and the ones who don’t are free to leave.
The plugins you offer are certainly affordable, even after your rate hikes. I doubt anyone who is serious about what they’re doing would have thrown a tantrum if you explained it first, and that would likely have saved you some time in explaining it afterwards.
I think Adobe and Netflix both got that right when they changed their business models, and for all of the complaining I don’t think much of it came from their important customers. There was a lot of noise, but it worked out alright for both of them.
But all of that is irrelevant now. I hope this allows you to be a stable business for years to come.
Not announcing it is probably the one area I wish we’d done a bit different. That’s actually precisely why we decided to do exactly that with the RCP price increase. We emailed customers ahead of time. We did not, however, email AffiliateWP customers even though we increased its prices at the same time. Since we were making two price changes at the same time, it was an opportunity to do a real experiment and see which method worked better.
WP Rocket does this type of stuff WAY SMARTER!
I love your transparency with your business, Pippin. You’re a real inspiration in the WordPress world! I sell plugins and child themes for the Divi theme. I recently launched a new plugin, and rather than continue the same pricing model for plugins that the Divi niche is used to (unlimited sites, unlimited updates, for life) I took a leap of faith and adopted the same pricing model that you have for AffiliateWP (minus the addons). I got a decent amount of pushback from people, however I stuck to my guns and sales have more than exceeded my expectations. I completely agree that software is undervalued. But doing what you’re doing is a step in the right direction. 🙂
One day your product cost X and the following day the product cost 2X or 3X. You added no value for the increase. It was the same product… nothing new… nothing better… just more expensive.
I seem to recall a drug company doing something similar with their EpiPen device and everyone went postal. I bet you did as well.
I don’t use your product… I don’t even know what EDD (in your context) does (as opposed to that other EDD product!) But I do know that given the the way you handled it… raising the price without providing added value… shows me a company that we would never do business with.
Reputation, honesty, and integrity are everything in the software biz.
You were not thinking about your customers… you were putting yourself first and you can get away with that for a while… but eventually a competitor will come along and put you out of business.
Good biz decisions need to be win-win for both the company and the customer and so far you have not convinced me that your customers are getting any added benefit from your product at the new price vis a vis the old.
You have only two intrinsic offerings to your business… the value of your product and your reputation. Maybe your product is as valuable at 3X as it is at X, but I noticed you never surveyed your customers about that.
As for your reputation, well I think you trashed it.
What if your ISP tripled their prices tomorrow with no notice and/or no value added?
What if all the oil companies doubled the price for no reason and without even a press release?
What if your insurance company doubled their rates… and offered no added coverages?
You would trash-talk them… as I’m sure a lot of people will trash-talk you as well.
Perception is reality… and for a seemingly smart guy you don’t seem to get it.
Take what I say as just electrons on a screen, but I’ve been starting, running (sometimes into the ground!) and selling software companies for the past 30 years and as the commercial goes… I know a thing or two because I’ve seen a thing or two.
I don’t know whom your advisors were but my guess is that none of them are over 30 nor had much in the way of formal business education and experience because no one with any biz creds would tell you to double or triple your price overnight without explanation and without added value (unless you were a virtual monopoly.)
If I were your customer I’d be hunting for an alternative mainly because this kind of business decision makes you look like the kind of company we don’t want as a vendor or as a client. But that is us. Obviously others see you in a different light… and so there is the possibility that I’m totally wrong… I’m not in doubt about one thing… you need some better business advisors… someone who is not afraid to speak truth to power.
Hi Al,
Thank you for your comment! I genuinely do appreciate your feedback! There are, however, some issues here that I do wish to address. Let me step through them for a moment.
Did we increase the price? Absolutely! We’ve already cleared established that fact. Did we, however, leave the product exactly as it was? No, I do not believe so, but what’s my word mean? Clearly it means little here so allow me to show you instead.
First, our main blog and our development blog, are both quite active and clearly shows some of the more significant updates that have been released with substantial improvements over the last several months and years even: https://easydigitaldownloads.com/blog
January 13, we released a major update to one of the primary add-ons with more than 69 major improvements.
February 13 we released a major update with more than 75 improvements.
On February 16 we released yet another beta (and the final release a few days later) version of one of our main add-ons.
On February 22 we released a beta version to another of the primary add-ons that added more than 20 significant improvements.
On March 21, just two days ago, we released a beta version to one of our anti-fraud add-ons with numerous significant improvements.
Those are just some of the ones that we wrote complete blog posts about.
Second, we employ several full time developers whose sole job is to write code that makes improvements to the software. Interested to see just how much activity is on the main Easy Digital Downloads project? Take a look here: https://github.com/easydigitaldownloads/easy-digital-downloads/pulse – Within the last week there were 10 bug reports / improvements completed with work from 5 different people. In the last month, there were 43 issues resolved from 10 different people. Oh, and that’s just the main Easy Digital Downloads plugin and does not include any of the more than 200 different other plugins the team also works on and makes available to customers.
EDD is not a product you use nor even one you’re familiar with, yet somehow you innately know that we haven’t provided any additional value to the product? Let me share with you another URL that shows just how incorrect that assumption is: https://github.com/issues?page=18&q=is%3Aclosed+is%3Aissue+user%3Aeasydigitaldownloads+sort%3Aupdated-desc
In case you do not care to read that, it clearly shows not 1, not 10, not even 100 different improvements and bug fixes made since December 14 (the day we raised prices). In fact, it shows 434 issues taken care of since December 14 across the EDD plugins.
Just for fun, here’s the direct link to the changelog pages of several of our primary EDD plugins that shows precisely when updates were released:
https://wordpress.org/plugins/easy-digital-downloads/changelog/
https://easydigitaldownloads.com/downloads/software-licensing/changelog
https://easydigitaldownloads.com/downloads/recurring-payments/changelog
https://easydigitaldownloads.com/downloads/stripe-gateway/changelog
https://easydigitaldownloads.com/downloads/frontend-submissions/changelog
https://easydigitaldownloads.com/downloads/paypal-pro-express/changelog
I would recommend you read them since clearly you’re a man that values improvements and open information, and being well advised on your words and actions.
Frankly, I wouldn’t do business with that company either. Good thing we did more than 430 unique improvements instead of none 😉 Oh, and for the record, we did over 2,250 improvements in 2016 alone.
I will more than happily hear from anyone that is clearly educated on the topic they’re arguing for or against. Without being too blunt, however, it’s clear you’re not familiar with EDD nor any of the standard daily or monthly activity that occurs within the product’s ecosystem so I would kindly request that you refrain from making sweeping assumptions or generalizations about the product simply because you don’t approve of a particular news item about the product.
I understand your POV. But take a look at it from the customer’s POV. Tell me if I’m incorrect:
On day 1 the product cost X. On day 2 that same exact product cost 2X or 3X. The product didn’t work better, it didn’t have any new features, and didn’t have a prettier interface. It was just more costly.
If I’m correct in the above, if you were your own customer, what would your POV be?
I did some research into your product and it seems to be well-received in the market. As one poster here said, I would not be surprised in your huge increase becomes an incentive for someone to come into your market-space and compete with you.
We use as few non-open-source modules as possible because we want to guard clients and ourselves against the exact same thing you did… yearly increased license fees for little or no value added. We don’t want or need another “cable TV” company in our lives. (And at least when cable rates go up they usually add some channel no one wanted and spin it that way.)
We don’t like the pay now and then pay forever model that the industry has gone to. We feel it is fraught with fraud and fakery… which I hate to say it, it pretty much what your company has done in our eyes (readers: YMMV.)
When we need to buy a theme or plugin, we make sure that the product and company will NOT do exactly as your company did. People hate that sort of thing and no matter how you try to spin it, it never works. It always sounds like a ‘coverup’ for greed.
You said you didn’t bother to explain the increase in advance because of anticipated bad publicity. What do you think you are going to get by the action you took. You seem to believe that you had a strong argument for the increase NOW, but that argument was not strong enough BEFORE the increase? You bought into the old adage that “Once we have ’em by the balls, their hearts and minds will soon follow?” Sorry, sir, it was a bad decision.
As an aside to the issue we prefer one-off pricing… meaning that if we need support we pay for it. If we need the new upgrade we buy it. We look for companies that will do their best to support older versions, at least for a reasonable number of years or WP upgrades. We always look at the reputation of the company and the people running it. I can tell you of of several companies in the Mac world who put out what I call hostage-ware… they pop in code that checks for a major OS X release and then just shuts down basically holding the client captive and forcing them to renew their license.
Of course, sometimes we have to hold our nose and do business with outfits that do not meet our standards of honesty and integrity.
Instead of trying to spin this along the lines you have… and I’m sure many people will believe it, I think you would have a better shot at preserving your reputation by saying: “Hey guys… I think we $#@! this up, BIGLY.”
If you want to double the cost of something give the customer at least 50% more value. Otherwise you come off looking like the Gordon Gekko. (You are probably too young to catch the reference… but you can look it up if you desire.)
I’m curious. Did you ask any of your customer base how they felt about the new pricing before you pulled the trigger on it?
You didn’t ask for this but I will volunteer it anyway… and feel free to ignore it… but it is a life lesson that anyone who owns a business either knows… or eventually finds out. You will as well.
“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” -Maya Angelou
As mentioned in replies to a few comments above (and previous page), I do feel that not notifying customers ahead of time was perhaps something we should have done differently.
I’m not spinning anything because we didn’t fuck up BIGLY, not even “smallly”. I’m entirely okay with some people feeling that we did, but it’s important we as a company and team do not feel that way. Our team is happier than perhaps they’ve ever been because this has permitted us to work with fewer but better customers.
The nice thing about “reflections” is we get to look back on things we did and see what went well and what didn’t. From my perspective, I can tell you these changes have actually gone over incredibly well even when there are a few negative points that stick out.
> One day your product cost X and the following day the product cost 2X or 3X. You added no value for the increase.
A lot of people have this perception that one day it was one price and the next day it was a much higher one.
The problem with this thinking is that there’s no historical perspective. Sure, the price changed — in some cases dramatically — but it wasn’t one price one day and another price the next. It was one price for years and then one day the price changed. If you happened to have been a customer accustomed to the old pricing, this change was likely jarring, but it was long overdue and you probably knew it.
That’s why you see a ton of comments from existing customers praising the decision. They’ve continued to realize improvements on the software that runs their stores and membership sites and affiliate program for years without seeing price increases. It was frankly inevitable and long overdue.
This honestly is a case of you not having really any idea what you’re talking about.
“I understand your POV. But take a look at it from the customer’s POV. Tell me if I’m incorrect:”
Al, maybe you should read the dozens of supportive and approving responses from actual EDD customers,rather than trying to imagine yourself speaking for us.
Yes Ray, if it is on the Internet it must be true. It is a well-understood maxim.
Nearly every one of the comments on this post is from a real EDD customer.
Right. Interesting that the guy who claims to be educating all “us millenials” (for which we should be grateful) is not a customer, has never used EDD. People like that give boomers a bad name.
Pippin, I’m glad the WP plugin market is maturing enough to make itself more sustainable. Last thing I need is for EDD to go away or quit supporting their products. Professional designers and developers get it. My success rests on yours and the success of other major plugins (eg, Gravity Forms, BackupBuddy, etc.).
Thanks, and best of luck.
Thanks, Ray!
Hi Ray,
I’m an EDD customer (one of the largest I would guess over the last 18 months) and I promise you I’m not at all happy to see the infrastructure which I’ve invested in up front, triple in price overnight. I’d say the feedback split is about 60/40. Pippin changing his business model compromises many of our long term plans. I had no issue with maintaining our customer licenses in perpetuity with the previous business model and developing further sites for customers.
I have no idea at this point what Pippin will see fit to do with the business or the pricing.
At the new prices, there was no real reason not to just go with the market leader (for whom there’s lots of less expensive third party extensions) if you don’t want to pay full retail. In business terms (not personally, Pippin’s a great guy, has done some great development work, wish him all the best), I feel betrayed.
Coming into a market at a lower price point, disrupting the market and then turning on one’s customers like a crocodile is what Microsoft specialised (specialises?) in. Adobe did similar things. I didn’t expect that kind of a turn from Pippin. Blindsided me.
If you’re a large user, Alec, you probably own the developer versions, which means you spread the cost across several users, no? If so, the cost increase per customer would be relatively minor.
I’m not saying I or anyone else enjoys paying more. But if it’s a choice between buying cheap and watching software and support go down the tubes or paying more and allowing the company to take care of its customers (ie, you and me), I’d opt for the latter. If you’ve never had a plugin go away that you’ve built a site around, then you’ve been very lucky.
It’s time that quality WP plugins claim their real value and create a more sustainable and stable plugin ecosystem. That’s worth more to my business than saving a few dollars which get passed along to my customers (and it’s worth more to them, also). It’s about paying a fair price for value received, and if the plugin developer can’t support the plugin (assuming competent business practices), that’s below fair value.
I think it’s possible to overprice plugins. I just don’t think EDD has done that. We all agree some forewarning would have been a good idea, but would it have changed anything apart from shifting the sense of betrayal you feel to a bit earlier on the calendar?
Hi Ray,
No, for us spreading licenses hasn’t worked that well. I’m the kind of idiot who donates $100 to open source projects and contributes to open source projects so we bought heavy up front, expecting to enjoy maintenance pricing going forward and wanting to contribute substantially to Pippin’s business well-being. Having the long term maintenance pricing triple is not cool for us however you cut, slice or dice it.
Pippin had a lot of alternatives other than tripling prices.
1. charge additional fees for support above and beyond normal support
2. control costs more strictly (maybe wiping out/buying out the third party developers wasn’t the best choice)
3. build a third party developer store like Apple’s where Pippin takes 30% of the juice and passes support on to the third party developers
4. extend his market with aggressive marketing in the WooCommerce space, based on close to equal quality at much friendlier prices
5. not force subscribe people (cable, mobile phone companies, student loans are bad enough without software developers trying to make their customers where mortgages to the grave)
6. grandfather existing customers
The new model will work, but it’s not democratising publishing. It’s more like creating an exclusive fan club.
As his new prices are in line with WooCommerce prices, the rapid expansion of EDD may end for real this time. Why go with the product with far fewer third party extensions and developers (which are priced very competitively around WooCommerce if the main product is not)? Is the EDD core code and ecosystem really better than WooCommerce is the question. If not and the prices are roughly the same, why choose EDD?
I would much rather have seen a really vibrant EDD ecosphere with third party developers, open extension store and huge community. That’s how it looked when we jumped aboard. I was happy to pay more than my share of the freight to make sure an ecommerce microclimate like that existed in the WordPress world. Alas, since we jumped aboard it’s been shutting down forums, locking out/buying out third party developers, wildcat price hikes.
I’d like to address these a bit.
I could definitely be proven wrong, but I simply do not believe this model works at any kind of large scale.
What’s one of the easiest ways to make an already-paying customer really unhappy? Demand they pay you more when they come to you with a question or problem. Every single company I’ve ever known to offer support-based pricing like that has discontinued it in favor of higher up-front costs. I don’t believe that’s a coincidence.
By taking a higher up-front cost, you cover base sides: the company can provide continued support and the customer can be assured they will get support when it’s needed.
You make it sound like we bullied extension authors into selling us their plugins. This is very, very far from the truth. Every plugin we’ve purchased was already abandoned by the author or the author was seeking a new owner.
Also, purchasing those plugins has actually done two things:
1. It has raised our monthly revenue because now it makes more sense for us to spend money, time, and effort promoting the plugins more.
2. It has lowered our monthly expenses because we pay fewer commissions. We also pay fewer support costs on those extensions because we can better control the development, ensuring they run smoother.
I applaud the idea of this but his is not even remotely an answer to unsustainable costs. Running a 3rd party marketplace is one of the number one reasons we’ve gone down this road. Frankly, if we had never run a 3rd party marketplace, we probably would never have had struggles that led us here. We’d have been profitable for years.
Also this ignores the importance of branding and reputation. Do you know why we have such a strong reputation? It’s in part because we stand 100% behind every item we sell, whether we built it or only helped sell it. If a plugin is sold through our site, we help support it. Period. Perhaps you’ve had the gift of always getting great support, but frankly many company’s support (individuals and teams) is downright terrible.
We made the decision early on that we would never allow another developer’s support quality to negatively affect our brand and reputation and that is a decision I’ve never regretted with even an ounce of my being.
I could have done that. In fact I’ve had offers to buy out EDD that would have rapidly elevated EDD close to the WooCommerce scale.
It’s important to recognize that not everyone wants to be the “big player”. Some people do not wish to even get close to the “big” player.
I have many goals in life, and one of the primary goals that drives everything I do is being happy. Happiness is rarely proportional to how much marketshare one has.
We have never force subscribed anyone to anything. Not even sure what that means unless you’re indicating I somehow made your credit card numbers magically hop onto the screen.
We did. All customers who held an active subscription was locked into the old price forever.
As with any subscription service/product, if a customer chooses to cancel their subscription, they relinquish all rights they may have to future price lock-ins.
Pippin: about force subscribing. Effectively you are force subscribing people. If I bought plugins (and you know I bought a lot of them), I should have the choice to renew every year at the prices at which I bought into the system. With your forced subscription model, I don’t.
I buy a lot of software. If I left it all of it on subscription, often I would be paying for subscriptions I don’t want or use. When the software offers renewal on the same terms I signed up, I usually do. You don’t leave me that option. I don’t like it and I’d call it forced subscription. If you take the word forced away from me, I would replace it with the phrase extortion subscription.
Forced renewal (one has to renew within the year to maintain one’s existing price level) would be more palatable. We do this ourselves with FV Player. We offer a 66% discount on new for continuous renewal and offer a 33% discount on new for occasional renewal (outside of the support and update windows). I’m going to
***
While I appreciate your concern about your support levels, you are really shutting out a lot of developers here as most of us don’t need support. You do have an issue: your neediest clients are causing you issues with support. There are other solutions than tripling prices.
For example, those who need remedial level support are offered those options, either as pay with you or sent on free or paid learning programs created by others. It’s not our job as WordPress plugin authors to educate or fix the site of everyone who ever picks up WordPress.
With our video plugin, if we took on the task of teaching everyone who writes us all the intricacies of running a video business, we’d have to close our doors next week. Instead, we offer as much documentation as you do and a free support forum and suggestions to our customers about how to simplify their publishing ambitions to a level which matches their current expertise or where to go to get more training.
Keeping documentation up to date and at the quality level we’d like is a real challenge. But the challenge of maintaining documentation is identical whether one has 2,000 customers or 2,000,000 customers.
We also offer paid development support where for someone who just wants us it done and doesn’t want to spend more time learning about AWS or CSS, we do it for them. This actually increases satisfaction levels as no one is turned away without a working site. By taking money for the hands-on support (which doesn’t extend to bugs or normal support: based on my experience of our support and your support our support is about on a par), two things happen.
1. The additional support load pays for itself.
2. Those who should really do some more reading and legwork themselves, often do so.
It makes me sad that you want less people to have access to your products due to support issues. On the contrary I’m thinking about selling our product for less money as I believe everyone should have the opportunity to have first rate video technology on his/her site.
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I think you had other choices here. The issue is not that your choices will be bad for you. The issue is that your choices are bad for the community and for the commercial open source movement. I think there’s a lot more to live for than personal happiness. Eradicating poverty, stopping war, diminishing nuclear risk, eliminating toxic chemicals in the food chain, cleaning the oceans and even democratising publishing seem higher ambitions than happiness. While tackling those big issues which face humanity, happiness very well smiler her way into all of our lives.
Of course, this is a personal choice and I respect yours. You’ve done much in the past to create a better WordPress ecommerce and software environment and point a way to a sustainable commercial open source model which keeps the open source in the model. I understand the stresses of running a software business and/or a large agency. It’s not easy. I’m not sure it should be though. Perhaps our expectations of how pleasant and easy life should be are too high these days. As John Donne wrote, life “nasty, brutal and short”. Now it’s somewhat longer but a rich life and a life of service is never easy.
@Alec
You have some good input but I wanted to respond to a few thoughts, only because I believe it warrants further consideration.
1) “I should have the choice to renew every year at the prices at which I bought into the system.”
While I understand your view, do you have the same option with groceries, gasoline, internet, or other services? These products and services go up over time (sometimes while downsizing portions or benefits) due to inflation and other factors.
Just because a bought a cheeseburger from McDonalds for a quarter in 1950 doesn’t mean I should be able to pay a quarter for a cheeseburger today. We have to consider that the cost of living and businesses expenses go up every year.
2) “It makes me sad that you want less people to have access to your products due to support issues … I’m thinking about selling our product for less money as I believe everyone should have the opportunity to have first rate video technology on his/her site.”
I respect your decision to want everyone to have first rate video, but as a business plan, this will likely be disastrous. Great businesses that thrive don’t try to get everyone as their customer. It’s better to have a smaller community of people paying premium prices and delivering stellar value, than have a large community at lower prices all demanding more. Of course if your goal is to be like Walmart, I get it.
3) “The issue is that your choices are bad for the community and for the commercial open source movement. I think there’s a lot more to live for than personal happiness.”
I agree that life is not all about personal happiness or what we want, but I believe we can serve greater causes than ourselves while still having personal happiness. Should Pippin – or any of us – give up life, health, and happiness for some unwritten code or ideal?
Business decisions should not have to revolve around the open source movement and what is best for the community. Sometimes you have to look out for you and your team’s best interest first.
Hello James,
You wrote:
James, you’ve completely missed the point here. I paid up front my license fee already – what supposed to be the main fee buying into a licensed software system as opposed to SAAS. Yes, I expect to be able choose to continue to purchase updates and support on the terms under which I originally bought the software. If not, as a customer, I’ve been cheated.
I’ve already pointed out, our team doesn’t use support much. The incremental costs are almost nothing. Pippin even agrees with me here about grandfathering, we only disagree about forced subscription (i.e. I think I should have the right to choose every year to renew at the original prices rather than having to leave Pippin an open credit line to charge my Paypal account whatever he wants automatically). I very well may not want to renew all of the extensions we’ve purchased. Indeed I’m annoyed Pippin for finding such a sophist way of cheating me out of my original purchase. I don’t think that’s his intention but it’s the result.
I don’t know about that James. Serving a wide audience seems to have worked out pretty well for Apple, Microsoft, Google and Facebook. Unlike most businesses, software has limited incremental costs depending on how one handles support.
Leaving software behind, Henry Ford changed how automobiles were built, how manual workers were paid (for the better) and put automobiles into the hands of millions. How did he do this? By charging five times less and managing his support (i.e. production) costs better.
First, I didn’t say anything about Pippin giving up his quality of life or sacrificing his personal happiness or the well being of people close to him. You seem to be deliberately twisting my words again.
What I did say is that personal happiness will often arrive while pursuing a higher goal. If hedonism and self-interest are as far as your philosophical horizons stretch, continue reading Ayn Rand and hanging out with like-minded people.
To take this further, if everyone thought the way you did, life on earth would be hell. Those who believe in helping others and leaving the planet a better place are who make life worth living, whether as a nurse or an ecologist or a teacher. Surely you remember those teachers who really made a difference to you? Fortunately they thought differently about personal happiness, financial gain and contribution to society than you do.
Pippin did $1.5 million in sales last year. From his frank and fascinating analysis of his progress, it’s apparent he needs more experience in business to successfully manage a business of this scale. This is not unusual. Different sizes of business require different management skills or learning new management and process management skills. Throwing on the brakes as he has to lower support stress is one way of handling the issue.
My point (and that of Al or David or a few others) is that there were other methods – possibly better in the long term for his business and his customers – to handle the growth than tripling prices.
My sincere apologies for the harsher tone. Hopefully I’ve been clear enough this time not to give you room to twist and distort my views and try to put words in my mouth.
Alec,
I’m taking your words as you have written them. If I misunderstood, then I apologize. Perhaps the communication is not clear. For example:
” …. I should have the choice to renew every year at the prices at which I bought into the system.”
To me, this implies that if you paid $39 five years ago for a plugin, then you should only have to pay $39 each year you renew that plugin. I don’t agree with this and it’s why I responded the way I did.
The reality is that software agreements and pricing changes all the time. I don’t know of many software companies who guarantee their terms or pricing will never change. I don’t see many companies who promise you will ALWAYS pay the same price year after year. This is utopian thinking.
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“….The issue is that your choices are bad for the community and for the commercial open source movement. I think there’s a lot more to live for than personal happiness.”
Again, it sounds like to me, you are condemning Pippin for choosing personal happiness for him and his team, over the needs of the community and open source. You didn’t mention “that personal happiness will often arrive while pursuing a higher goal”.
I made a general response to what you wrote and how I read it. Nothing more, nothing less.
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“To take this further, if everyone thought the way you did, life on earth would be hell …”
That’s adorable! What do you know about me personally other than a few comments to a blog post? Do you know how much I’ve given to the WordPress community for years? Did you know the past three years of my life I’ve forgone a nice salary and benefits to teach and mentor military veterans for free? Before you jump to assumptions perhaps you should do some research.
“… fortunately they thought differently about personal happiness, financial gain and contribution to society than you do.
Fortunately I don’t follow what others tell me or think my life should be. I’m not perfect and have definitely made mistakes, but I sleep great at night because for the most part, I’ve lived my life right and helped hundreds of people.
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“Surely you remember those teachers who really made a difference to you?”
Yes I do. The teachers who told me I would never make anything of my life made a HUGE difference. They gave me the fire to be very successful in life and business!!
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Don’t apologize for your harsh comments. They don’t bother me. They made me smile.
I don’t have time to debate anymore or to continue a territorial pissing match. Life is way too short. I don’t agree with your comments and you don’t agree with mine. It’s all OK.
Enjoy the rest of your weekend.
Alec,
I don’t have the energy to respond to all of your points, but there is one thing you said I cannot leave alone.
If you believe for even a moment that software does not have on-going and extensive costs outside of support, you’re going to be sorely disappointed if you ever choose to release and maintain a software package of your own.
Where do you think the full time development salaries for multiple developers goes? Into the wind? No, it goes into:
– Introducing new features
– Maintaining support for older features as the software and hardware around it evolves
– Fixing bugs, those introduced by our own hands and the hands of others
– Improving interfaces, features, and experiences
– Accounting for changing legal requirements (ex. VAT taxes)
Describing software as having “limited incremental costs” is an insult directly in the face of every developer and grossly misconstrues the huge amount of development time put into software. Unlike customer support, on-going development is often times invisible to most consumers, especially when it’s done exceptionally well, but it’s anything but inexpensive.
“Describing software as having “limited incremental costs” is an insult directly in the face of every developer and grossly misconstrues the huge amount of development time put into software.”
I kinda, sorta, almost, pretty much agree.
We know all about support because we wrote and maintain the JAYA123 online application: http://jaya123.com which is about 150,000 lines of PHP code. (Try the demo… no personal info needed.) We charge $250 a year for it.
I will add this one comment to what Pippin said. Eventually you get the bugs out of the software and eventually you find the time to write ‘killer’ docs and a ‘killer’ FAQ such that you can refer your tickets to one or the other. That really helps keep costs and time down.
I am surprised to hear Pippin say that a forum actually caused him more work than less. We’ve never run a forum but thought about it from time to time because we assumed it would save us time and dollars. But if it didn’t work for Pippin, it probably would not have worked for us either. (Also, we had/have way, way, way fewer users than Pippin… we are not even close to his base!)
As a buyer and user of software I like user forums… I don’t think we’ve ever had a problem with any plugin or software that someone else didn’t have before us and which had not been answered in a forum. I can’t remember the last time I filled out a tix for some app we own or are subscribed to.
As an aside, we are going to EOL JAYA123… as it has been out there for 13 years now, we made good $$ from our investment in it so many years ago… and we either need to re-write it… or end it. When we started we were a pioneer of SAAS but now the market is crowded with order-entry/invoicing, bookkeeping systems… which are better than ours. Our user base is down to a small number of die-hards, and we’ve given them a year to find a replacement. Maybe someone here would like JAYA123… we’d probably just give it away… but it is pretty dated as you will see from the demo if interested.
Hey, can you have a plugin that is 200,000 lines of PHP code 🙂 If so, Pippin it is yours!!!
Hi Pippin,
Thanks for your note.
Pippin do you know so little about your customers? We have had a pro video plugin on the market for five years which has been best of class for the last two years (FV Player vs JWPlayer vs Flowplayer HTML5 Player).
So I already walk in your shoes.
I know exactly what software development costs. Yet all of the items you enumerate are not incremental costs. Whether one has 5,0000 customers or 500,000 one must do all of the following:
That you cannot make EDD pay on $700K year is more a testament to a process issue than an issue with pricing. You’ve admitted yourself that 2016 was a year of consolidation:
1) retiring plugins
2) buying out third party plugins
3) building a more solid support structure
Of course you didn’t have high margins in 2016. You were setting the stage for a future with higher sales, very high renewal rates and all the revenue going to your company. You’d seen plugins rebound with revenue given a bit of promotion. I don’t know why you think EDD would be an exception to that rule and to the synergy between the three plugins. What the future will bring is an interesting question.
By tripling your prices, you’ve certainly made the WordPress online store/ecommerce market much more attractive to someone like Syed Balkhi of WPbeginner who never saw a market with exclusively high priced competitors he didn’t want to undercut (ie. his WPForms plugin to compete with Gravity Forms, Ninja Forms and Formidable Forms in an already well-served and overcrowded market). Had you kept your previous pricing, you would have enjoyed a semi-monopoly position for the foreseeable future with WooCommerce as the expensive option and EDD as the popular option.
One winning hand would be to exceed WooCommerce code quality and functionality over a long period of time and take the entire market. Getting some of your existing customers to pat you on the back is not a win.
You’re a very intelligent man and I expect you will see some of this yourself over time. But it will take certainly take time to play out. A third serious competitor has not even arrived in your market. But it will. Figures like Larry Ellison or Bill Gates or Steve Jobs (or even Mark Zuckerberg) mainly thought very big: marketshare in five years not maximisation of today’s profits. When they did act instead on the here and now, usually they regretted it.
I have no interest in a “monopoly” and would happily welcome someone like Syed to come in and join us in the game of eCommerce.
I really do not, however, appreciate you coming to my blog and insulting my management. You don’t have to agree with how we’ve done things and I welcome the insightful discussions that have been had but you’ve crossed the line. You know little to nothing about the internals of my company beyond what I have shared publicly, so do not try and accuse me or anyone involved of poor management because some numbers don’t make sense to you. That puts you perfectly in the “petty asshole” seat and I would like to expect better of you.
You cannot one moment say how much you respect me as a developer and a person and then insult my financial management skills the next without also knowing all of the details. Pick a side or I’ll happily allow your comments to go directly to spam.
Hi Pippin,
I’m very sorry to have offended you. It’s the last thing I’d want. I certainly wouldn’t want to say anything about your financial management skills. I know nothing about them. When I mentioned budget numbers, I intended to speak more about process management and optimisation (to reduce support costs and stress without reducing support quality).
We cannot be equally talented in all areas. To give you an analogy, I’m a much better writer than I am a musician. Both are arts. I’m a far better cyclist than I am a runner. Both are sports. I’m a far better strategist than an administrator. Both are a form of management. In my own company, I’ve gradually had to learn to hire to my weaknesses and play to my strengths. What we are best at is not even necessarily what we enjoy most.
It’s an ongoing process for me as well. Huge respect to you for what you’ve achieved. You’ve set high standards for quality commercial WordPress code and documenting that code. It’s that you are a standard bearer which makes this decision on your part so important. Your decision will influence a whole generation of WordPress plugin creators. It will change our ecosphere.
Even this discussion will be read and cited for years when people think about plugin pricing and WordPress business models.
You’re right. I don’t know all the details so I defer to your better judgement. And once again, I’m deeply sorry to have offended you.
Confession: I don’t use your products but I love to read what other business are doing to address their problems. Thanks for sharing. I did have one question though….
If I’m reading this right, you raised prices in an attempt to reduce the amount of support requests you received but when that didn’t happen, you just reduced the the amount of tickets you responded to by 42%?
No, that’s not correct.
The total number of tickets being submitted has not yet dropped dramatically, but the total number of tickets that we handle each day has dropped by 42%. This doesn’t mean we just stopped responding (we respond to every single ticket).
What this number really means is that the number of tickets that stay active in our queue each day has dropped by 42%.
A “handled ticket” is any ticket needing a reply, whether it was initially opened today or a month ago, that was replied to.
For one reason or another, the price increase has made tickets get resolved faster so there are not as many clogging up the queues for new ticket submissions.
I’ll admit it’s really interesting and not entirely logical, but the numbers don’t lie 🙂
I’m guessing that weeding out the “lower end” customers is the reason for less back and forth on tickets. We’ve *consistently* seen that the customers that spend the least amount of money require the most support.
Al, you’ve made your disrespect for others’ opinions very clear. Hard to learn something new when you live in an echo chamber.
Fact is, many WP plugins that provide significant value have been priced unsustainably for years. Thankfully, EDD is setting an example and setting their prices at a fair, sustainable level, and it will likely enable them to continue supporting and improving their products.
Maybe it prices out people doing websites for $500, but you have to pick the part of the market you want to serve,
Ray your failure to learn or to even appreciate the POV of others, especially those who are critical is a typical millennial attitude which those of us who are a bit older and more experienced have come to expect (I’m age 69 with 45 years in the software biz… started with Ross Perot’s EDS around 1975.)
I gave you good advice which you should have just thanked me for and moved on, but you decided you wanted to express your ‘tude’ instead. Like I said above, no one forgets how you make them feel.
I also own a book publishing company (adams-blake.com besides newmediacreate.com) and have learned over the years that criticism is MOST often a much better teacher than acceptance. People will tell you what they believe you want to hear. Critics are usually far more honest and you would do well to at least listen to them, validate them, and then, if you wish, ignore them.
Yes, we do $600 (not $500) websites but not in WP… in Bootstrap and mostly to authors and publishers… which is a warm market for us … sites like this: kohanawolf.com. We don’t make a lot of money on them, but at least half of them come back to us a year or so later seeking a full-bore WP site which we normally charge from $1500 to $2000 for. The strategy has worked well for us.
I’m sure there are customers of yours that do some websites at a similar low price point and your dismissive and arrogant judgement of them does not seem worthy of a company as admired as yours is. I don’t know what you do for your company but in my opinion you would be best advised to step aside and let Mr. Williamson be the point-man on this as he seems to have the disposition for open and cordial debate.
I’ll give you one more piece of free advice that you are welcome to ignore: “People don’t care how much you know, until they know how much you care.”
Raise your price as high as you like.
As Jerry would say, “And good luck with all that.”
I wish you well.
Well, I’m 63, Al, so you’re intimation that you’re older and wiser falls flat. If you’re doing $600 websites, you’re a hobbyist, not a pro, and your opinions should be seen in that light, no matter how much you pontificate.
Hi Ray,
Your disdainful comments about Al’s business made me curious. What’s he’s offering is pretty clever and could be very helpful to many small businesses.
The sites are built with bootstrap and no WordPress.
Monthly hosting costs are $7. You also have to pay for your domain.
Where did you see safe hosting and maintenance for WordPress anything like that fee these days? The cheapest viable plans I know of are Flywheel at $15/month for just 5K visitors or SiteGround for about $10/month for 10K visitors. WPE starts at $49/month. Your site will probably break twice/year due to forced WordPress core updates (our BusinessPress plugin will help with that allowing you to stay on security upgrades only as long as you like and postpone site breaking major upgrades).
In any case, the minimum price is $599 with options to spend more. The templates are not all out of date. The design is basic but very functional (this is from someone who builds only high end sites).
The value in WordPress is for sites which do a lot of dynamic updating (weblog, complex stores). Otherwise let’s compare what Al offers small businesses vs WordPress on an annual basis:
Domain: $15 vs $15
Hosting: $84 vs $300 (average)
Ongoing license fees for some of caching, slider, theme, SEO, video, contact form, no store: $0 vs $200 to $600 with new EDD
Developer maintenance: $50 (could be zero) vs $200 (could be $500)
Al: $599 up front and then $149/year
WordPress: $1500 to $2500 up front and then $715 to $1415/year
The WordPress up front costs are for offers similar to Al’s, not real high end as that’s would not be a fair comparison. With WordPress, the business owner does get blogging software (if s/he’ll use it, most don’t).
Arguably the small business would not only be better served financially with Al’s solution, the small business would save a huge amount of time involved with maintenance and learning and downtime and security issues and choosing software in the WordPress category. For many small businesses, an extra $1000 means the business owner’s family can go go for a vacation or not. Or to have a website or not. Without Al’s services, the only choice these people have is Squarespace or Wix both of which give them no control over their site and facing monthly license fees forever.
On the other hand with SquareSpace at $11/month for an info site with weblog and $17/month for that plus store, WordPress and EDD (or WooCommerce) are starting to look like a very poor financial choice.
Again this makes me sad. But if we won’t offer what people want, we will force them to look elsewhere. Perhaps some of you remember the origins of WordPress. Moveable Type was the cool kid (and better engineered and far more secure with built-in caching) until Moveable Type introduced minimum $299/year fees for v3. The situation in the WordPress community seems very similar. We are setting ourselves up to be superseded. We should be making our money from new projects, not seeking to bleed our existing clients for all the blood we can. This isn’t just Pippin’s issue of course. Ten years later (i.e. now) core WordPress should competently handle security, contact forms, basic caching and basic SEO straight out of the box. It’s an embarrassment to us all that it doesn’t.
Pippin, maybe a follow up post about the cost to develop and maintain such a plugin would help people understand things a bit better. I find the accusations that your gouging customers annoying to say the least. I would suspect you have $100,000+ in development and that doesn’t count on-going maintenance, updates, support, marketing, payroll, etc…
I think the people complaining have no flipp’n idea what it costs to do what you do.
The people that don’t value what you’ve created likely aren’t in your target market…
I have customers complain about $30 a month for hosting yet they’ll spend 3-4 times that each month in lattes or cable TV, etc. (as you pointed out). I also wonder how many of those complaining are doing so using their MacBooks (the pinnacle of price gouging – I’m typing this on a MBP FYI).
If your customers can’t realize a positive ROI in the first month for what they pay for your plugins, I’m guessing it wouldn’t matter what your charge, their business still wouldn’t be a success.
I generally only use paid plugins (Gravity Forms, The Events Calendar, Envira Galley, Slider Revolution, Soliloquy, Woo Extensions, WooThumbs, etc…) and paid themes (StudioPress and Divi) when I don’t use the Foundation framework for custom themes. I’m not only paying for the development time but also the expectation that if I need help, I get it. The other reason is I can’t create or couldn’t recreate the functionality in a reasonable amount of time. Take Gravity Forms, it probably saves me 75-100 hours of time throughout the year in form creation. That’s more than worth want I pay each year for the Developer license.
You won’t do this, but I’d like to see you say, “If you don’t like, use something else.”
I’ve shared cost numbers in my year in review posts a few times. Last year, for example, it took $692,297.02 to develop, support, and maintain Easy Digital Downloads. That’s an all inclusive number, so contractors, vendor commissions, payroll, insurance, etc, is all included in that. Easy Digital Downloads made a total of $693,527.98 in revenue for 2016, leaving just $1,230.96 extra to “play” with.
I remember a post like that know that you mention it Pippin. Maybe starting with “I made $1,230.96 last year on EDD” would have made a difference in the push back. It is easy to understand that a 1% profit margin isn’t sustainable. The choice is become vastly more efficient and/or raise the price OR throw in the towel. I’m sure more than a few of your disgruntled customers would gladly pay more if the alternative was find a different solution.
Pippin, did you ever think of small price increase but charge for support? In your article, it states “Would I pay $500-$1500 per year to operate the stores that provide for my family and employees? Absolutely!” But the problem is not every customers is the same. If I made 10,000 a month from the store I would easily pay you $500 a month for EDD. But if I only make 500 a month, how can I afford the same pricing structure??? Not all customers are the same.
I totally understand when say ” I’m sick of this; I just can’t keep taking care of these people, maybe I should quit. I have had those thoughts and every member of my team has had those thoughts.” I have that thought every week. I also have the thought of “Why am I doing this”?? So I totally understand that side.
And as someone also stated, “It is your business and you run it as you see fit” Totally believe in that. So your loyally customers will stay and the rest will go and now you will be left with what you wanted. I just hope it keeps EDD and all of your team in business for a long time to come, as your Impact on the WordPress Ecosystem has been incredible.!!!
Thanks!!!
I’d be happy to be proven wrong, but I don’t believe support-based pricing will ever work at scale. The economics of it simply don’t work.
Hey Pippin, I’ve read much of your posts, but first time I’m actually engaging.
I can feel your pain, I really struggle to understand how people complain so much for the price of software – it’s like we’re on a gravy train, software development is very different from online courses, support eats away at profits.
Was wondering, have you tried Support driven development? I think it’s a very effective way of eliminating / reducing support calls whilst give the development team much better insight to what customers are actually doing.
Or maybe support calls were routine stuff which didn’t necessarily translate to bugs or real issues?
I’m not sure I know what you mean. Could you elaborate on support-driven development?
Pippin,
Would you consider doing a lower price brand but with no technical support what-so-ever? I’m a developer and just don’t need it so would happily pay less for a promise never to contact support!
No, I don’t think I would.
There are a few downsides to it I see:
1. It complicates the purchasing decision for customers. Perhaps one of the worst things a store owner can do is introduce too many choices during purchase (no, the irony of how many EDD has is not missed on me). The “tyranny of choice” is a problem.
2. Many customers would opt for the no support option and then later realize they need support. When in a bind, one of the last things customers want to do (or product owners want customers to do) is feel burdened by another required purchase when all they’re trying to do is resolve the problem they’re experiencing.
3. It’s a solution that benefits a very, very small minority of customers.
Realise that “support” costs include maintenance — updates for changes in WordPress, work-arounds for dumb things that themes do, fixing bugs that arise from new features and from new ways that people do things, and ensuring that security flaws are patched quickly. Even if you never submit a support ticket, you’re benefiting from fixes (and new features) from tickets raised by others. We all benefit from continued support and maintenance.
I’ve followed the discussion all day… one of the more interesting ones of late.
It looks like your current customer base is on board with you, and while people will often post what they think you want to hear, I have no reason to believe anyone here will be making a change right now, since they were grandfathered.
However, you have given some of your customer-base a reason to shop around at renewal time. Of course they always had that option, but you have given them an impetus to exercise it.
Beyond the developer license we have for Genesis and the Dynamik Web Builder, we try hard to stay away from buy-now and pay-forever plugins and themes. But we are different from many firms in that we have a lot of coding depth ourselves and it is not all that difficult for us to modify GPL code (I’m sure some of EDD is code from GPL modules.)
And to be honest, we don’t even like plugins that much… we’ve all been through plugin hell. It happens time and time again where some plugin developer doesn’t know all that he or she should know and writes a function with the exact same name as another function in some other plugin written by another guy who is clueless… and you know the rest of that story.
I was impressed that you prefixed your functions with “edd”:
function edd_resend_purchase_receipt( $data ) {
(line 40 of actions.php)
We find it easier to support our own code when possible. We have a nice library of GPL code that we have modified and incorporate into the WP functions.php or other files. It would not work for everyone but it lets us sleep a bit better at night knowing that all our functions start with nmc_cmn (initials of our company forward and backward. I doubt any plugin writer will use the kind of a prefix!)
As for shopping carts, we use Woo, but don’t like it much as it is poorly written code. We do our best to convince a client to forget about a plugin that will probably eventually break and use a stand-alone system… we tend to like ShopSite because it has been around a million years and has a solid business model.
It will be interesting to see what your retention rate is over the entire year. And what will be more interesting is if your bottom-line increases to your expectations.
With the exception of one guy with a bad attitude, you seem to have a pleasant, positive, and proactive customer-base. But everyone has a budget and perhaps some will find that dropping EDD and using something like Woo will increase THEIR bottom line… just as raising your prices has (or will) increase yours.
Sp you guys increased the price to 250% only to reduce half an our of support per day? Really? I am not seeing any improvement in your support. I have emailed about a security issue of EDD about months ago. Which is a very serious bug. I was assured that this will be fixed in near future. Which was not. I also opened a other few tickets in the past and in an average I received average response and “Not our fault” type of response.
The worst decision you made for the users was when you ditched the support forum. In past, whenever we had issues with edd or the extensions, we could simply search the forum and gotten a solution real quick. But with this ticket system, We have to wait 24+ hours to get our issues fixed. Which is really frustrating to say the least.
With this much price increase, you guys should make the Priority support forum open to all users who pay $$$ per year for the extensions..
If not, I have to tell you are being greedy..sorry.
It should be noted that only 3 plugins were increased by that much. The majority of the plugins had a much, much lower increase.
Regarding that security issue, that bug was fixed and emailed to you back on March 1. Here’s a screenshot to prove it: https://cloudup.com/ccqM6QVFjn2
Perhaps our reply landed in your spam folder? I’ll follow up with you again now to make sure you got it.
As we run a marketplace business (Elegant Marketplace). Your support has been great and, moving from WooCommerce (who don’t know what support means).
EDD runs our business and has allowed us to grow exponentially.
Software always seems expensive, it is just the way it is.
People love free and with all the n’er do wells out there giving away stuff on the back of GPL, All premium providers need to protect their business, staff and core products.
By raising prices, you are raising the bar on who your customers are – they are serious, they know that they have to invest to make their business grow and they will continue to support you, grandfathered in or not. – This is a Brave, considered and sensible decision.
Keep up the good work. 🙂
If you didn’t do it yet…Make a 80/20 analysis as well. You will see that 20% of your Customers do you 80% of your turnover and 80% of your Customers do you 20% of your turnover but…they are a pain, steal your time and many other not nice things.
It’s the way it is.
A price increase actually helps to get rid of a good portion of the 80% and that’s good for everyone involved.
Keep up the great work
Corrado Izzo
Hello
When a customer steps away from using EDD there is a chance they will step away from using WordPress. I think another poster mentioned Shopify as an alternative solution, there are also others of course.
So not only does EDD lose a customer that perhaps they don’t mind to lose but theme authors and other plugin merchants also lose their customers or potential sales and perhaps they rely on those sales. I suppose that is their problem not yours.
But of course, such increases may serve your business better but if all plugin authors were to do the same then you would end with a very elitist system in place.
It is difficult to square the circle between WordPress which is open source and encourages private individuals to start their own websites and maybe try at a little online store and plugins that are available only to those who can afford them. $1,000 or even a few hundred bucks might not seem a lot of money to some of your posters on here but to a college kid it’s money they’re going to have to borrow.
Maybe that college kid isn’t your target audience. Fine but where’s he/she going to go? He’s not going to WooCommerce because their pricing is comparable to yours now. So what to do? Answer: they leave the ecosystem. And the caching plugin author, the theme author, the forms builder and so on and so on all lose out not just this year but also next year and the next year …
Al is correct (above poster) you only have 2 things. Your product and your reputation. What you have done is build your reputation on a FREE product (WordPress) you have given the community some FREE plugins over the years and you have a well priced, well coded product in EDD (and also your other products)
What you have done is taken all that reputational collateral and trashed it. You have hiked your prices without fair warning and raised them through the roof. It looks like you have encouraged people along for the ride and then gouged them on price and pulled the ladder up behind you.
YOu may not have wanted this to happen, it may not be your intentions which I’m sure are decent but perception is everything and to my mind you’ve just dented all that hard work. Then when you read this forum and you see customers present, past and future being told they are not wanted if they don’t have deep pockets and how they are a drain on your time and resources. Well I think you will get what you wish for in the end.
In the UK there is a saying about ‘doing a Ratner’ and I think you may be close to achieving this, your belief that you have done nothing wrong and all the changes you have made will not be reversed is very admirable but it is helpful sometimes to be willing to change a direction if you are being told it’s not a good move. Did you try and survey your customers before and after the move? What did they say? I shouldn’t rely on feedback from comments on a blog post if I were you there is an echo chamber effect from such things.
I have yet to understand why it is not possible for plugin or theme authors to sell their products in two ways. You can buy the plugin with support or without it. Create a 2 tier system. What is the objection to this? I have yet to see a single plugin author do this across the whole of WordPress? If you don’t make money from support and it’s just one big aggravation then offer a no support option. Simple, no?
If over this next year we discover that we screwed up and need to backtrack, that’s always an option. I do not believe that will happen but if it does, we’re not so self-centered to ignore it. In the end, we’re here for the long game and are willing to make the necessary changes to keep playing.
Regarding support-based pricing, see my reply above for some of my takes on this model: https://pippinsplugins.com/reflection-on-a-price-increase/comment-page-2/#comment-764896
As someone who owned a software company for 8 years, prior to the Internet, I find myself thinking back on why I sold my company. One reason. The model was unsustainable. Like you mentioned Pippin, I too was burned out and overwhelmed with the shear number of support requests. This was before email – so it was all on the phone – and sometimes using a program like Carbon Copy to take over a customer’s PC.
Back then, there was a price war with another competitor that led to more customers for less dollars. I wish I would have had the courage at that time to do what you have done with EDD. Instead I sold my company to the competitor, and while it was a win for both of us – I often wonder what would have happened if I had stuck it out and raised my prices??
While many folks here are complaining about the price increase – I wonder how they would have felt if you had chosen to just discontinue the product?
What is the point of all of this – if it is not sustainable?
With my own web design and development business now – I’ve made a conscious effort to choose a sustainable model. That means less clients – but more valuable ones – that I can serve in a way that makes me happy to come in to work everyday and excited about what I do.
Finally I am an EDD customer – and I am going to renew because I want to be part of a sustainable community, one that thrives vs survives.
Thank you for writing this post and reminding me about my own journey.
I’ve had several offers to buy my company over the last three years. I often wonder what would have happened had I accepted the offers. There are days that I wistfully think I should have, but more and more often in the last 12-18 months I remain resolved that I did exactly the right thing by not selling. There are a lot of challenges my team has faced recently and I’m supremely proud of them all for taking them head on and working through them. Some will read this and assume the decision to drastically raise our prices was an easy choice made glibly, when in reality it was probably one of the most tormenting changes I’ve ever signed off on for Easy Digital Downloads.
I am resolute now that the following decisions will end up being some of the best I’ve made for our project:
– Raising prices
– Not selling the company
– Reducing the focus on a 3rd party marketplace
– Struggling through the burdens and challenges that some days made me want to walk away
These decisions have all allowed us to more greatly focus on what we set out to build in the beginning: a great eCommerce platform for selling digital products with WordPress.
Thank you for sharing your story, Jackie! And thank you for continuing to be a customer and an inspiration for us!
Pippin,
As you know, I’ve stepped away from the WordPress community in general, but somehow I landed on this post and feel compelled to share my thoughts.
I applaud you and your team for thinking about the future of your company, being sustainable for the long term, and reducing the ridiculous loads (and unrealistic expectations) of support. Screw what everyone else thinks, because at the end of the day, no one cares about you and your team’s well being like you do.
As one who helped launched some of the very first premium WordPress products in the marketplace, so many customers expectations are unreasonable. They want everything for free or cheap and never consider the costs it takes to build products that make their lives easier or that helps them make money. For those of you complaining, have YOU ever created and brought a product into the marketplace and then supported it? Probably not. Check your responses.
If greedy is taking care of the people on your team and ensuring your business is around in the future, then being greedy is a good thing. But I can assure you that Pippin is not greedy and a humble person. He’s been very generous with his time and money since I’ve known him. Pippin is being a smart business person.
@AI – Your comments are ignorant and the fact that you are selling websites for no money and your work is outdated goes to show no one should take your advice seriously. You should spend more time working on YOUR business than spending hours telling someone how to run theirs, especially when they are VERY successful.
Keep up the good work Pippin and team.
“@AI – Your comments are ignorant and the fact that you are selling websites for no money and your work is outdated goes to show no one should take your advice seriously. You should spend more time working on YOUR business than spending hours telling someone how to run theirs, especially when they are VERY successful.”
And yet another member of this ‘community’ with an “it’s all about me” attitude. What exactly do you get from a post like the above? Are you trying to show how smart you are? Are you trying to show how successful you are? Are you trying to show how tough you are? Are you trying to show how creative you are?
James, my friend. Making a post denigrating a colleague does none of the above. It just makes you look small and petty and somewhat foolish.
I saw this on your website (which is quite nice BTW) and it kind of gave me a smile:
“Let me be your branding and digital marketing sherpa.”
Is this what you teach your clients to do… go out and beat up on someone else with the hope that everyone will think they are Mr. Terrific and sign up and pay them huge amounts of money? I ask because if it works, I’m going to go out and to the same thing!
That was a pretty scathing review and roasting you gave me. I hope it made you feel better and if it did I’m glad. Guys with your personality type need to do this… it is part of your DNA or something. I’ve been in biz for 40-something years… I’ve seen it all… or at least most of it.
Anyway your review above reminds me of the famous story told about Dorothy Parker (or attributed to her.) A newspaper editor had written and published a scathing review of her new book. She wrote a letter-to-the-editor saying:
“Dear Editor. I am sitting in the smallest most cozy room of my house. I have your review in front of me. It shall soon be behind me.”
My sentiments exactly.
@AI
My DNA is to be honest, straightforward, and not be afraid to defend others when it warrants it. This is what I did here — defend the decision that Pippin made for his company.
It’s interesting that you feel you can publish your negative and condescending comments, yet no one is allowed to call you out about them without being seen as “having an attitude.” If you’re going to share your opinions, you need to be able to receive opinions back without getting butt-hurt. People disagree with me and tell me things I don’t want to hear, but that’s life and freedom of speech.
Besides some of the thing you said to Pippin, the tone that you took towards millennials and younger people bothers me. Just because you have been in business 40 years and have age behind you, doesn’t make you an expert. I’m 46 years old and have seen a LOT of shit in my time, yet I’ve learned some of the best business/life lessons from people who were 18-27 years of age.
Don’t you feel some of your own opinions were denigrating a colleague? Perhaps my response was harsher than needed, but sometimes a harsh word is needed. If I seemed petty or small, then it is what it is. I won’t lose sleep tonight for standing up for something I believe in.
FWIW I don’t agree with Pippin on everything. He and I have had some big differences on beliefs and I’ve called him out and vice versa. Yet at the end of the day, I respect him and will have a beer with him. I’ll have a beer with you as well.
Hi James,
While you may be taking Pippin’s side, your attacks on Al are personal, vulgar and completely out of place. You characterize Al as “condescending” and “negative”, going on to use language like “butt-hurt” and “lot of shit”.
On the other hand, while Al disagrees with Pippin his language is always respectful and he discusses the business decision and not does not attack the man. Your interaction here has brought the discussion down two or three notches and is probably pushing Pippin to just shut it off.
This is the most important business decision of Pippin’s life and affects the future of WordPress as a democratic platform (open to all). Why? Pippin is seen as a thought leader in our community. People admire his coding, his open communication, his past generosity and the success he has enjoyed with his business. Pippin creating a software gated community in software that in the past was kept on GitHub and to which he encouraged open contribution is a shocking shift.
It’s important this discussion happens and your tone is doing everything possible to destroy it. I’m not one for censorship (at all) but I’d appreciate it if Pippin would remove the ad-hominem attacks, vulgar language, wild accusations from your posts. It’s Pippin’s site so he’s free to do as he likes of course. Secretly he may be happy to see the tone turn sour to give him an excuse to close the discussion. It would be early yet to do so as this news is still reverberating through the community.
Hey Alec,
Thanks for your input and taking time to respond.
It’s interesting that you support freedom of speech yet encourage Pippin to shut down the comments or censor my “vulgar” responses. Which is it? It can’t be both. I
If Pippin wants to delete my comments, he is free to do so, but if he does I do want to point out some things first.
1. You call me out about vulgar language but Pippin himself said “I’m not spinning anything because we didn’t fuck up BIGLY, not even “smallly”. Are you going to ask him to police his own language or just mine?
2. You said I made wild accusations? Can you show me where I did this? Everything I said is based on what AI said to Pippin. Now, I could have read his comments ALL wrong and it could be that I misinterpreted everything he said … and if I did, then I will be the first to apologize, but here is how I interpreted the comments (paraphrased):
AI believes Pippin screwed up royally and should heed his 40 years of business advice. He doesn’t care about his customers, puts his own needs first, his reputation is trashed. He said “Reputation, honesty, and integrity are everything in the software biz.” which implies Pippin has none of these. AI said for a “seemingly smart guy, Pippin doesn’t get it.” He also goes on to question his advisors and talk as though 30 somethings can make good decisions. OH, and by the way, I DON’T even use your products.
Can you tell me how this “language is always respectful and he discusses the business decision and not does not attack the man” as you said? When you question his integrity, character, and leadership it IS personal.
The way I read it is that this man is talking down to Pippin as if he were a child. Again, I could be very wrong and will apologize if this isn’t the case, but you have to admit that the tone is condescending.
3. I make no apologies for standing up for Pippin or others who constantly get based in the WordPress marketplace for trying to ensure their business is solid and profitable. The WordPress mindset is broken and I’ve watched many great people go out of business or suffer mental health issues because people in the community are ignorant about business.
This is the real world will everything can’t be free or cheap. People invest their efforts, money, blood, sweat, and tears into building products that solve a problem. They have families and teams to feed. Yet some customers only focus on their selfish needs and get hateful or ugly when prices are increased or business strategies are changed.
At the end of the day, it’s Pippin’s company and it’s easy for any of use to say what we would do when we’ve never walked in his or his team’s shoes. It’s OK to question the idea behind his strategies, but some of the comments question his ability and character which is not cool.
James,
Appreciate the support!
I don’t recall if you were at Pressnomics last year (was that before or after you stepped away from WordPress, I forget) but your comments about taking care of team, family, and self first are poignant and are very central to the why around many of the decisions made here. I’ve written on the subject (and spoke at Pressnomics on it) before: https://pippinsplugins.com/selfish/
This latest decision is one of the final major changes to be made in order to protect our team, our products, and our longevity.
I’m a customer. I agree with your decision to increase the prices.
However, I feel ambivalent about your reasons for taking that decision.
What I feel would have been good reason is something like: “We’re raising prices because we have really high standards of support — the best in the industry — and it’s not sustainable to provide such high quality support at the current prices. We’re going to use the extra revenue to hire more support staff and maintain our super-high levels of support.”
What I’m actually reading into what you’ve said: “We’re raising prices because we want fewer customers, and therefore less interaction with them and less time supporting them. We won’t lose money (even if we lose customers), because the difference will be made up by the price increase. And the fact that most of the customers we lose will be the ‘low quality’ customers is the best thing.”
As a customer, I felt sad when I read this from you Pippin: ‘I’m sick of this; I just can’t keep taking care of these people, maybe I should quit. I have had those thoughts and every member of my team has had those thoughts.’
It makes me feel like a bad person just for sending in a support request or a question or a bug report or even a suggestion. That I’m causing you and the staff harm. It just makes me sad.
I won’t speak for Pippin, but I don’t believe that you should feel that way. In our case, it was our commitment to service support combined with the needs and expectations of the base of our customers that led to our an overall unsustainable business model.
In significantly adjusting our prices upward I sharpened the focus on providing great support but to those who could pay to make that model viable. It just happened that much of the loss was on the lowest tier that statistically required the most support time, by 60% or more.
I don’t use “it’s not personal” because when humans interact it’s by definition “personal.” But, I struggled for months before I made the change precisely because I worried about how it would impact our customers and the business. I’m sure that was far from lost on Pippin.
Your good reasoning is actually much closer to what I really meant than your second interpretation.
We have always held ourselves to very high standards for customer support. Our high standards are one of the primary reasons we are not well suited for running a 3rd party plugin marketplace: we are not okay with relinquishing quality in customer support by allowing vendors to provide their own support. When product sales are sold under our brand, we will always be the ones to support them in order to ensure customer support meets our standards.
Thank you for sharing your thoughts!
As a customer who purchased software licensing for 200$ a month ago and a plugin developer, I do agree with you.
A year and couple of months ago, I decided to do “plugin a month” challenge, which at that moment sounded simple. Do one “premium quality” plugin each month for 12 months. After 4 months i decided to stop because support was increasing, and if you want to keep offering quality support, you need time, time that you are spending on full time job or with family. From 7000+ active installs across 4 plugins i have 69 5star ratings, none below that, because i really focus on giving great immediate support. BUT In order to keep giving free plugins with free support, you need sustainable model. One of the solution was to do premium version.
So for one of mine popular plugins at that time, I decided to build premium version. After adding all features requested by customers, I figured out that i actually added to much stuff. And If I sell it for any real price, i would still be spending to much time on support and with that price it wouldnt be sustainable for long term. So I never published that plugin nor ever will. But I moved to the next one, learned from my mistakes and instead of adding lots of features, i focused on biggest ones and even decided to make it more pricey then the competition and keep offering quality support (they have cheap price but support is lacking) .Published it, used EDD and its been going great for past 2 months. After 5 sales, i used that money to buy software licensing plugin. Actually i never thought about its price, It didnt make any difference to me if it was 99 or 199 or even 299, i would purchase it in any case because it does bring value to my customers who in return earns me money.
One funny fact is that paying customers can be more friendlier than customers that are using your free plugins.
All in all, most of the plugins are really cheap, take a look at shopify, their plugins are paid monthly. So when someone says that yoast is expensive with 70$ premium, well shopify most popular seo plugin is 240$. Maybe we should do monthly subscription, maybe people are likely to pay monthly price then once a year.
Good luck to you and your team in the future.
btw. There is some bug here, if i log in and refresh, i get logged out, also wp.com tells me pass is wrong but i still get logged in.
Thank you for sharing your story and for using EDD 🙂
Best of luck with your plugins!
@Alec: Thank you for the kind defense. It is appreciated. I surely did not intend to have my remarks seen as a personal attack on Pippin. In my (somewhat calcified) mind my words were directed to his products (well coded) and his pricing policy.
As for language, owning a book publishing company for thirty years and having made big(ly) money in non-fiction publishing before Al Gore invented the Internet (which killed-off the profits in the non-fiction sector) I was somewhat surprised at Pippin’s vulgarity as well as that of Mr. Dalman. But I find this to be more of a generational issue. Those far removed from my ancient age simply don’t interpret what I consider obscene as vulgar. I think it is is part of the dumbing-down of American culture, but from my continued activities in the publishing world ( http://bit.ly/1We4P7O) I know that that is very limited viewpoint and not shared by most (younger) people. I think there is a place for both sexual and scatalogical terminology in fiction, but I rarely see that need in a public screed or monograph, such as this board. My opinion… all are free to differ.
As for Mr. Dalman’s pejorative postings and his critical attitude (I’m being kind here) it is wasted on me. I remember when I wrote my first book called ComputerMoney (http://bit.ly/2nTA2Ca) which started my little publishing company (http://adams-blake.com) I got a fair number of bad (scathing!) reviews in the media (this was 1991 before the net) and I was devastated. Some technology book reviewers said the price $29.99 was way to high (even for a mail-order book) and the quality was too low, and the writer was an idiot! Think of Mr. Dalman multiplied by ten or fifteen. My wife and I had put a lot of time an money into the project (ads in computer publications like Computer World and BYTE magazine, etc.) After reading the reviews we thought we were the stupidest people on the planet for spending so much money on a book ‘gamble.’ But then the 800 phone number started ringing… and sales came in… and in… and in… and after we sold/shipped 15,000 copies from our dinning room table over the next 18 months (do the math… that was bigly money in those days!) we learned a valuable lesson… one that was enunciated so well by the famous composer Jean Sibelius:
“Pay no attention to what the critics say. A statue has never been erected in honor of a critic.”
So at the end of the day, we learned (and I propose here to) let the Dalmans of the world be who they they are… and move on.
@Drew Jaynes who said: “This honestly is a case of you not having really any idea what you’re talking about.”
Actually I really do know what I’m talking about. I’m really not as stupid as most people (and my first, current, and very expensive wife of 35 years) think I am. But I won’t rehash the points I’ve made previously about Pippin’s new price policy to defend that statement. Either you get it or you don’t, and at both the beginning and the end of the day, it matters nothing to me if you do or don’t. Be free to be Dalman Jr. here if you wish. It’s quite all right.
Getting back to Pippin’s new pricing, I agree with others who believe that it would have been a good idea to try fixing the process instead of raising the price so drastically. I well remember from the businesses courses I had when getting my MA from the College of William and Mary (1974) learning about price-theory, elasticity, supply/demand curves and marginal cost needing to approximate (or equal) marginal revenue. Of course most of that is theory, but there are practical applications that abound in the real world and I believe that had Pippin perhaps brought in a consultant with a strong biz and economics background that he would find a number of processes that could be tried (fixed?) before the drastic doubling of prices… which is sure to have an impact on sales.
Mr. Dalman and others denigrate us for being in the ‘low end’ of the market; for doing sites for $600 (http://newmediacreate.com/lim/). He fails to see that these are simple Bootstrap sites, four or five screens that take about six or seven hours from first client contact to delivery (spread over two days or so.) Since rolling out our “Less is More” platform it has done well for us. There is demand out there for the low-end, and as I said earlier we often get these clients to upgrade to our higher-end (and more profitable) WP sites (http://newmediawebsitedesign.com/wp2/)
There’s an old, wise saying: “Cater to the classes, dine with the masses; cater to the masses, dine with the classes.”
YMMV
AI,
You keep talking about how my attitude is critical, yet you are being critical yourself. That’s extremely hypocritical.
I also find it interesting that you really seem to be going out of your way to puff yourself up by insulting me more, talking about endless years of business experience and successes, linking to your books, using pithy quotes to make you sound smart, and talking down to younger generations and the dumbing down of America. Somebody needs a hug and affirmation.
FWIW I wasn’t trying to denigrate you for selling $600 websites, but trying to say that one who is NOT making money (your words) with their services or products, they should not be giving business advice to someone who is making an incredible living. This would be like me giving golf advice to Tiger Woods without ever playing professional golf. If you’re happy with what you earn for your services, who am I to judge that?
Additionally, I never said you were stupid. I think you have valuable experience and you sound educated. What I did say was that some of your comments were condescending and maybe ignorant. There’s a difference.
It’s OK if you don’t like me and want to keep up with the insults. Knock yourself out.
@James
You write:
“I also find it interesting that you really seem to be going out of your way to puff yourself up by insulting me more, talking about endless years of business experience and successes, linking to your books, using pithy quotes to make you sound smart, and talking down to younger generations and the dumbing down of America. Somebody needs a hug and affirmation.”
I don’t know what the purpose of your posts about me have to do with the subject of Pippin’s blog post. I don’t know what your fixation about me is all about.
If you want to engage me, I’m easy to find. I suggest you do that in lieu of venting your dissatisfaction with me and my postings in this public forum.
I will be happy to discuss with you any and all disagreements you have with me in private.
As always, a post full of so many invaluable insights with a large hat tip towards transparency. 1001 thanks for writing this. Keep it up. You were 100% right in raising your prices like you did.
I’m both a customer and a plugin developer, so I can see this from both perspectives.
As a plugin developer (who sells premium addons using EDD to run my business), I really, really, really, REALLY feel your pain when it comes to customer support. I work into the wee hours almost every night answering the questions, support tickets, etc that come in over and over relentlessly. It’s exhausting, just like you describe.
Customers really don’t understand what their requests cost us developers in time (and sleep and stress and even family life!). So, as a developer, I’m with you — I would gladly choose to have less customers and higher prices any day.
Like many plugin developers I have both free and paid users, and I’ve found what others have said to be true: the less customers pay (including free), the more unhappy and harder to please they become. There is some messed up aspect of human psychology that when people get something for free or cheap, they get MAD if it’s not perfect in every detail, yet if they pay $100’s of dollars they suddenly become way more patient and understanding. It’s weird, but I’ve experienced it many times. As a developer, who would you rather deal with?
Price is a great filtering mechanism.
Now, as a customer of EDD, I do wish the plugins weren’t so expensive. For example, to spend $199 for one plugin *feels* like a lot of money. Logically I know the $199 will pay for itself many times over during the year, but it still *feels* like a lot. (I guess that’s where I get sucked in to the same perception the rest of society-at-large seems to have, which says $5 for a Starbucks is okay but $5 for an app is expensive… it’s hard not to.)
But, in the end, I’m still a customer because I rely on EDD to run my business, and obviously the value these plugins provide is worth the price. The logical argument trumps the emotional one, and so I accept it.
So, bottom line, as a developer I say “Go Pippin!” Raise those prices. It makes total sense.
As a customer I say… EDD is not cheap, but it’s still worth it.
It looks like some comments were deleted?
No matter. The guy who said Pippin lacks business sense of course doesn’t know the full picture but I understand the point he was making because you generally see this happen a little bit in tech companies.
The founder is a tech wizard and understands the products and the customers who use them but of course then the company grows and grows and suddenly the tech guy is in charge of staffing and payroll and financing and forecasting and has to start making business decisions in areas where they have no experience. Being a jack of all trades can be good but sometimes it is difficult to be a master of them all.
The fact that prices have been raised so much suggests that the original forecast of how much to charge was way off course. Why? Where was the product research and customer feedback? When the prices were raised how were the new prices decided? What did your research say? What was the feedback from your focus groups or users? What was the outcome of the surveys you sent to customers old and new? How many of your current user base did you select for this research? How did you arrive at the timing of the price changes and so on. These are things that an astute company would consider before reaching a decision, not some kind of suck it and see. I have not received a single message in my inbox I must be unlucky I guess.
I think most of the people on here saying they applaud the decision have been grandfathered in at the old price? Well it is easy to say of course that you like the price rises when you are not affected by them. Now you get better support for the same price as before. It’s the new customers that are now subsidising the old ones.
Talking of subsidy. Why if I do not want support am I paying for it? This doesn’t seem fair. You will surely know what the cost of the plugin is and you then layer the support cost on top of this amount. If I don’t want to pay the extra amount why do I have to? The reason is surely that I am supporting the people who do need support. Why am I subsidising them? It does’t seem fair to me.
My final point is that you used to beat WooCommerce hands down.
– Better pricing
– Better support
– More trusted
Now I can say that your support will be better always because there support is so bad. I mean my dog could do a better job and it has been dead for 6 months. But, now your pricing is about the same and I am sorry to say that the manner in which these price changes have been rolled out has also made trust a little less. I am sorry but it is true.
So now you leave a vacuum to be filled. The problem as CafePress will tell you is that when you have a GPL product then there are plenty of willing takers to come along and bastardise your code and undercut you on price. And there are plenty of people willing to pay less 🙂
So you say you don’t want a monopoly and well this is good for customers because they get more choice but of course you have to be a little bit careful what you wish for because I think you may find that over the next few years extra competition in the market might be your undoing. Which would be a great shame. The WordPress ecosystem needs as many Pippin Williamson’s as it can get, so I hope you reconsider because I think you will find that you will start to lose customers and also friends in the community. I am not suggesting you should be allergic to money but for every positive there is a negative, such is life.
Leon,
I really appreciate your comments and feedback!
Note: no comments were deleted. If you’re not finding some, you may just need to click the “Older Comments” link at the bottom of the page: https://cloudup.com/cUnLImRkUTM
Your insights about tech founders being placed in a role where they are making decisions they’re not familiar with is exactly correct and is an experience I’d assume most company founders experience at one point or another. I am, for example, a much better developer than I am a manager of people. I am also much better at managing finances than I am with creating successful marketing campaigns. In the end, one of the defining characteristics of a successful company is the founder’s ability to bring the right people on to do the jobs she/he is less capable of or does not have the time availability to do. Filling the roles that I am not personally able (or perhaps do not want) to do has been a constant focus for me over the last two years, and I can tell you with absolute confidence that I believe I have done an exceptional job at this. The team I have working with me today is better than the best team I would have ever imagined.
You, along with several other comments, have mentioned a so-called lack of research around this price increase. I would like to address this because, while an understandable viewpoint, it is fundamentally incorrect.
We have been building and selling Easy Digital Downloads since April, 2012. In fact we’re approaching our sixth year of doing this. And before EDD we had more than two years of selling other plugins (more than 30 different ones in fact). While that may not seem like a terribly long time for many businesses, it’s actually a very long time for a 100% digital business, especially in the realm of WordPress. We’ve been around since the very beginning of commercial plugins and that means we have seen (and used ourselves) nearly all of the different pricing schemes and levels. We have massive amounts of “research” data that backs up any and all decisions we make.
Because of the long history and the amount of real-world data we have, we know very well how customers will react; we know very well how it will affect support volumes; we know very well how it will affect customer acquisition; we know very well how it will affect customer trust and happiness. None of these things were “unknowns” to us and they all helped us to form and execute a plan.
There has been some concern expressed about how customers are now paying more for the same support. This is also incorrect. One of the primary things that make a company’s support quality suffer is volume. When the volume gets too high, support teams are over burdened, stressed, and constantly overwhelmed. When a company drastically reduces the volume of support, the quality of support provided can increase significantly.
Our support will significantly improve because our capacity to provide better support is dramatically increased through lower volumes.
That’s certainly possible, though I hope for our sake and our customers’ sake that you are incorrect. 🙂 At this point in time I am more confident than ever in our longevity. We are here to stay.
What happens if the support costs do NOT go down per your expectations? What is Plan-B? Will you raise the price again? Do you have any idea (research) as to what the highest price you can charge is?
That was taken into account.
As noted in the original post, we’ve already seen a significant reduction in support. The price increase has already removed 1.5 hours of time in support each and every day for our team. It has also already reduced the average number of tickets we work on per day by 42%.
Those are hugely significant.
If, however, that is not sufficient, the price increase has also raised our monthly revenue by (thus far) $7,000. A portion of that could easily be allocated to a new team member to help out with support.
Keep in mind as well that lowering support volumes isn’t the only objective. The price increase also provides us with the means to put more time and money into development, documentation, and marketing, thus improving the overall platform for all customers. This also has the side effect of, ideally, lowering support even further, which then lends itself again to more development, documentation, and marketing efforts being possible.
@Pippin “In the end, one of the defining characteristics of a successful company is the founder’s ability to bring the right people on to do the jobs she/he is less capable of or does not have the time availability to do.”
Something I struggled with for several years, but so right about.
That’s a lot of food for thought. Thank you very much for this article. I am currently in the process of increasing prices so it’s perfect timing!
Just curious, is that “NET revenue” after paying you/your employees?
It’s before paying employees.
I’ve used several of your plugins before, as well as inheriting websites which have used your plugins. I can honestly say that I’ve always found support to be great and the plugins have always done the job well. Increasing your prices to reflect the effort involved in maintaining and developing them is perfectly acceptable. In many ways even by multiplying the costs by three times, you then only need a third of the custom to make the same money. I think getting paid a fair price for your efforts is perfectly acceptable and I applaud you doing so.
Its good to see you have written a post about this price hike. I think its good for your buyers and readers who will understand the reason behind the hike.
Great article. I was one of those customers considering a purchase of the Marketplace Bundle at the end of 2016 and then having made the decision to go with EDD early this year, found that my budget was going to have to be amended! However, it didn’t stop me going ahead as it is was clearly still a great value proposition. It’s great to read now the thinking behind the change and I am greatly reassured that this will only help your team in continuing with the product and providing the excellent support which I have already made use of a few times.
My minor problem is you already had a buffer and additional revenue by having products like Manual Purchases. Which to me should clearly be part of the core product. I believe in the past the justification for these very minor point products, that provide a single bit of functionality, was essentially the same as you are making for this out-sized price increase. But as a company who also develops plugins I understand the problem/cost/fatigue of support and perceived value of plugins. Hoping you help raise industry prices in general, even if this was a bit …bold?
Thank you for your thoughts, Mark! There are a couple of items I’d like to address here, however.
I find the very idea that anyone can be “wrong” or not justified in putting a price tag on any feature of their plugins silly. We are justified simply by the fact that we created it. Period. Regardless of how necessary or commonly-needed a feature is, it’s not wrong to ask users to pay for it. Ever. Rather than thinking of each premium portion of a product as a downside, every free portion should be considered a bonus. Whether it’s a wise business decision to price stamp certain features is a different discussion, but at a philosophical level there is nothing wrong with it in my eyes.
Manual Purchases, as an example, was originally made a premium product because it was something people would almost always be willing to pay for out of necessity. If you want to have a successful business that is built upon a free platform, you have to give customers ample reason to actually buy your premium offerings. To do that, put a price tag on features / systems that people need. It’s no accident that our most successful products are the ones that people need in order to operate their store. None of the best selling products in our company are “nice to haves”.
The Manual Purchases plugin is one of those features that people need and so are willing to pay for. It is, however, also a pretty low earner because, due to its nature as a single-feature plugin, it has a low price tag. Last year the plugin made a grand total of $6,117.80 in revenue. This price increase, however, is what actually allows us to discontinue it as a premium product and instead roll it into the core Easy Digital Downloads plugin, which we will be doing soon. By increasing the price tag of our primary product offerings, which are plugins like Software Licensing, we become able to remove the price tag from simple, one-feature plugins like Manual Purchases, as those little plugins are no longer required to sustain us.
I am a customer who went digging around after noticing the huge price increase, which I found quite frustrating as I made the decision to use your product explicitly on a long-term calculation of on-going cost – which has now skyrocketed. Sure the price is worth it, but as a business executive with 15+ years in startups I run my companies by the numbers and strictly only by the numbers, so I am not thrilled when the numbers suddenly change.
I realize that you’re not going to appreciate this post, but I think this needs to be said… I am sorry if this post upsets you, but I’d still love a straight-forward answer.
What exactly stops someone from purchasing your plugins, and then sharing them for free with others? Your code is licensed under the GPL and thus so are all the plugins, which is a requirement of the GPL license.
Your contract to which users agree at purchase time acknowledges that the product is licensed under the GPL. You attempt to place additional restrictions in the contract but those restrictions are absolutely not legally binding because they’re directly at odds with the GPL license which absolutely supersedes your contract.
I am curious what you have to say on this matter?
Here is a good summary (from http://wpandlegalstuff.com/understanding-gpl-licensing-wordpress/):
>> I’m a theme/plugin developer. I’ve put huge effort into writing my theme/plugin and I’m going to release it under the GPL but I want to make sure that everyone who receives my theme or plugin, even if from someone else, is obliged to pay me a licensing fee or notify me that they have it. Can I do that?
No. As the Free Software Foundation puts it, the “GPL is a free software license, and therefore it permits people to use and even redistribute the software without being required to pay anyone a fee for doing so.” Similarly, if someone receives a copy of GPL’d software, that person does not have to inform the developer that s/he has it. You are entitled to charge a fee for access to support and later versions, but this is quite different to requiring recipients to pay a licensing fee for merely using the software.
>> I’m a commercial theme or plugin developer. I sell my GPL’d theme or plugin online, behind a pay wall. People can only access the theme or plugin files after paying my prescribed fee. Does the GPL allow me to do this?
Yes. You are entitled to charge a fee for distributing copies of GPL’d software. Note, however, that anyone who obtains a copy is entitled to release it to anyone else, with or without charge; the GPL allows this to occur.
I actually really do appreciate this comment. It raises some important points for anyone selling or buying products under the GPL.
The answer is simple: nothing.
While I certainly do not appreciate it when someone takes one or more of my plugins and redistributes them, I understand precisely why it happens and I greatly appreciate the facets of the GPL that make it allowable to do and I intentionally do not put any effort into preventing redistribution. Whether it’s labeled as “piracy” or “legal redistribution”, my answer is the same.
I’m often a member of a rather small group of people that think this way, I actually believe very strongly that spending time and effort figuring out how to make it harder for dishonest people to take things from you is generally a waste of time.
Piracy (or legal redistribution) happens in just about every industry, but the impact that it has on your business largely has to do with how you choose to fight it. If you take an active approach and invest multitudes of time, effort, and money into combatting those that have no appreciation for the value of your product, you will actually undermine the intrinsic value of the product. How? Simply by investing time, money and effort in the wrong place. I prefer to take the time, effort and money that I could use to fight piracy and invest it directly into real customers and the people that have an appreciation for what has been built. Is some money lost due to piracy? Maybe. Is a whole lot more gained by investing in the customers that matter? Absolutely.
My team and I choose to invest our time and efforts into making experiences better for the customers that buy our products, at the old and the new prices. They are the ones that matter.
Pippin,
I am curious why you are choosing to conflate piracy (violation of the law) with explicitly permitted actions under the GPL?
I am not understanding whether you’re actually licensing all the code you sell through your website under the GPL or not?
Because it seems like you’re doing two things at the same time, which makes no sense. You’re saying “yes, this is GPL and you’re free to do whatever you want with it under the GPL license” and then “oh wait, using your rights under the GPL is piracy”.
Which is it?
I didn’t say it was illegal piracy, I simply compared redistribution of GPL code to piracy to answer your question about the effect it has on our business when someone takes our code (which they are legally permitted to do under the GPL) and redistributes it. To answer that, I compared this redistribution to piracy. My exact words were:
Here is the specific clause of the GPL that addresses this matter for your reference:
(From 7. Additional Terms. @ https://www.gnu.org/licenses/gpl.html)
All other non-permissive additional terms are considered “further restrictions” within the meaning of section 10. If the Program as you received it, or any part of it, contains a notice stating that it is governed by this License along with a term that is a further restriction, you may remove that term. If a license document contains a further restriction but permits relicensing or conveying under this License, you may add to a covered work material governed by the terms of that license document, provided that the further restriction does not survive such relicensing or conveying.
This is an wonderful post, thanks for taking the time to write it,
This was a really interesting read and glad that i came across it as it answers a few questions that i had.
Thank you for sharing.
Obviously, prices should be increased again. I have no answer for 4 days. All my recurring payments are failed and I do not have an answer.
It is very frustrating to lose thousands of euros without being answered.
Thanks a lot for sharing such a wonderful blog with us. Extremely happy to see this informative blog . I really appreciate your efforts, this blog helps a lot to me.
Hey, Thanks for sharing this article with us. It’s also like an alert for increasing prices.
It’s great that you are getting ideas from this paragraph as well as from
our discussion made at this time.