WooThemes Raises Monthly Prices 33%, Backs It Up With Bad Math [update]

May 2, 1012: A late update that WooThemes eventually did understand my position which was shared by a few others and monthly prices for existing customers didn’t increase when new sign ups did at the beginning of this year. A big kudo to WooThemes for realizing the value in their long-supporting customers!

This is a classic example of how startups and growing businesses shouldn’t treat their existing customer base, especially for subscriber services. Companies like Netflix have taught us this lesson well. And, the dynamics of a community tell us that if you’re selling a subscription service with fixed goods, subscribers tend to use less of your service’s offerings over time (meaning, you make more of a profit from them over time).  These are all lessons WooThemes ignored, tore up, and pretended didn’t exist when they announced back in September they were raising their prices 33%.  WooThemes adds 2 themes per month, and, feels because of this the library has grown more and the higher monthly price tag makes sense.

While I’m sure this makes sense from a business standpoint (and, by business, I mean someone with a business major and no reality in sight), it doesn’t from a product or community standpoint. People paid WooThemes monthly expecting to get 2 new themes per month, and a one time setup fee for the rest. So, you pay $7.25 each month for a theme if you use it or not, and $100-200 to get started.

Increasing the monthly fee just means now you’re paying $10 a month for a theme, you’re not “gaining” anything.  If they wanted to sell that story, they should have raised their setup fee to account for all the available themes in their library for new users. Instead of just admitting they were raising prices in general, they did a corporate swan song on the size of their library and support options.  In the end, I wrote this comment on their original blog post:

I’m still irked that folks like me who have been club subscribers for a long time and /haven’t/ used your support (and, really only used a couple themes in the wild) are having our rates increased. We’re not “gaining” anything by it whatsoever. Increasing it for new members who are getting more up front makes sense, but, we’ve been “financing” and believing in you for a long time and we’re the ones being shafted. I still only pay $15/yr for Grooveshark, because I was an early subscriber. I pay less than half the monthly fee for Blinksale because I was “grandfathered” into their new plans. I pay $15 less per year for Skype’s calling plans because I got them when they first came out.

Other companies /respect/ the customers they were built on enough to let the older users who believed, held down the fort, and built their community to let them keep the subscriptions they always had. Heck, even most of the jerks at mobile phone carriers do. We’re the /vetrans/ of your community, and, if you aren’t able to respect us, we’re going to loose respect for you.

That is all,
/Robin

I’m still hopeful WooThemes will have a change of heart and make a more sensible change to their plans — all in all they are a pretty great service. But, if you need to raise prices to cover bad business decisions, say so. Don’t lie to your customers.

4 thoughts on “WooThemes Raises Monthly Prices 33%, Backs It Up With Bad Math [update]

  1. Hi,

    Just wanted to comment on why we are raising our prices on monthly subscriptions, as it seems you are looking at this from a wrong perspective.

    With a subscription comes three main things:
    1. Two new themes a month
    2. Updates and fixes on all current themes
    3. Support on all themes

    We’ve now gone beyond this and added two more things to monthly subscription:
    1. Free support on WooCommerce
    2. Free access to all WooCommerce child themes
    3. Free access to all WooCommerce parent themes.

    We’ve doubled our support staff, and also have two new developers on our staff for WooCommerce.

    With a club subscription we can’t cater for everybody unfortunately, so sure, we have some users that only use a couple themes and never ask for support, but we have to accommodate for those that use a lot of themes, and ask for a lot of support.

    I hope this sheds some more light on this topic, and although you might not agree with us, at least you know why we are doing it.

    Regards,
    Magnus

    1. I do hope you still realize this is like having your local water provider calling you up and going, “We’re taking your monthly bill from $60/mth to $90/mth because we’re going to start pumping koolaid to your home too. We know you didn’t ask for it or will ever use it, but our entire budget is based on everyone wanting and using koolaid from now on, so there’s no way to opt out. We know when you signed up we were a water company, but, now we’re going to be a water & koolaid company, so, get used to it”.

      You were a really good wordpress theme company, why are you forcing extensions on all of your customers? It doesn’t make any more sense than my water company example above.

    2. I’m a WT customer – I only use WC extensions and I have a lot of licenses for “unlimited sites”. Last time you raised your prices, about one year ago, you did justify the move because you had to make your business sustainable and ensure a better quality support. Fine. Except that each time I issued a ticket to the support, 9 out of 10 the answer was “We don’t support that”. That lead me to wonder “what I’m paying this premium for?”. Since then I stopped using support, it was just a waste of time for me. Nevertheless I kept purchasing some of your extensions and paying up the premium.

      See, I’m ok to pay for yearly subscriptions for plugins. When the price is reasonable to what I get. Gravity Forms have a yearly subscription plan. But first of all the dev license comes with a ton of add ons (and growing). Second, their support is stellar. I mean I had these guys working ON MY CODE that I WROTE to extend THEIR plugin. Third, an annual license costs I think 199$ (half if renewed early) which is the price of some of your addons for WC that don’t come even close to the complexity of Gravity Forms and furthermore your support wouldn’t cover anything except probably dumb questions from inexperienced users who could do great with a good KB, videos or other materials.

      I do not use support and even if I would, it would be unprofessional at it’s worst and barely “satisfactory” at its best. Why I have to pay for this? Why you don’t let users pay for support separately then? Lower the prices of your plugins, lower the cost of the subscription plans, add an optional subcription for paid support (perhaps with two options, basic and priority). Then your customers wouldn’t be so angry because they would pay what they get and get what they pay. Now, what we pay is hundreds, if not thousands of dollars per year for a bunch of plugins whose value can’t be equated to that of other commercial WordPress plugins, that’s the reason why people feel cheated by you.

      Honestly, at this point I do hope someone comes up with a better plugin or forks again WooCommerce and makes a better business out of it – something which you guys seem not able to. Sorry but it’s the facts. First, you tried to develop your own shopping cart, you failed, you “bought over” another. Then you failed at offering a professional and sustainable support for it. And every year you have to write a blog post to explain that your business model risks to fail. And on top of that every year you fail at listening to your customers. Congratulations!

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