On January 2, 2019, Drip.com sent an email to their customer base notifying them of an upcoming price increase. It didn’t go over well. We’ll dig into what didn’t go as planned from the outside looking in and share a couple of options Drip could have done.
I’m all for pricing increases when done correctly and actually benefit the customer.
Table of Contents
Let’s start with the email
The tone of the email is friendly. The message is direct and not hidden. But the meat of the message…
Drip started by sharing that they are adding hundreds of ECRM features. We’ll stop here for a bit. If you don’t already know, ECRM stands for ecommerce CRM. This is an acronym Drip has coined as they continue specialize their product and niche their target market.
If you’re SAAS company or a blogger, you’re left with your thumb up your butt. ECRM features are not useful to you. It’s not completely from left field as Drip publicized their creative ECRM with their last redesign a couple of months ago (I still find their website confusing and the new branding odd but 🤷).
The Drip team doubled down by ending the sentence with “putting out tons of ecommerce content to help your business grow”.
Drip fails to communicate what the pricing increase is. You can upgrade to annual to avoid the pricing increase. That’s not a terrible offer. However, we still don’t know what the new pricing is after the annual plan.
Who wants to pay a non-refundable annual fee if the new pricing tier no longer fits your business and upcoming features will not suit your business needs?
I’ve read the email multiple times and talked to a few Drip customers and non-customers about it. It appears Drip may be using this email as a way to thin out
I’ve seen some chatter that Drip is running low on cash and needed to increase revenue quickly.
Another issue with the email is the timeframe for the pricing increase. Best practice is to give your customer at least 30 days notice before a pricing increase. Drip said “nah – 12 days is plenty”.
Drip did offer to send several reminders between now and the date of the pricing increase (Jan 14) so there’s that.
Twitter is still heated as you can see here.
What could they have done differently
There are several things they could have done right off the bat.
Even if they were wanting to softly nudge non-ecommerce customers off the app it doesn’t make sense to do it all at once. A huge exodus is not good for accounting, reporting, team morale, or your public perception.
Drip’s perception is definitely damaged but maybe only in the areas where they are no longer seeking customers.
They should have shared actual improvements they made to Drip – not just we made hundreds. Prove it. Even if they are ecommerce related improvements – show me.
They should have offered some level of grandfathering. This is purely an opinion and what I’ve had direct experience with at numerous companies which has appeared to work well when communicating with customers and reducing churn.
Patrick Campbell of ProfitWell makes a convincing argument for not grandfathering. I agree with much of what he is saying but still think grandfathering has its place in a pricing increase strategy (grandfathering segments and an end date).
Here’s how a pricing increase email should read.
If Drip really wanted to clean house of customers that are not in their target market, why not strike a deal with a competitor. Who knows if that would be possible or if any of them would bite?
Competition
A deal where Drip could “sell” leads with their competitor would maintain the customer’s perception of Drip because they had their customer in mind.
Nathan Barry and the ConvertKit team were working around the clock to contact upset Drip customers. There are plenty that have a bone to pick with Drip’s decision – publicly.
One of Drip’s biggest advocates, Brennan Dunn is even leaving. Brennan has been a huge advocate of Drip through his many online courses and even his Drip Course. Brennan took to Twitter like many others to express his frustration and hint at an upcoming ConvertKit course.
Sadly, it appears that the Drip team has removed Brennan from the Facebook group where he has spent countless hours helping their customers.
Drip also replaced their pinned tweet which promoted Brennan and his Drip expertise shortly after his last tweet.
Take Aways
Pricing increases are always hard. The most important parts of your business are often the hardest. Increasing the price of your application is incredibly important as you continue to add features, build out your team, and improve.
Keep your customers in mind when writing the pricing increase email, deciding on an increase percentage, and settling on a timeframe.
Yes, it’s painful for the business but it’s even more painful for the people paying you as the amount they budgeted for your tool is no longer enough.
Start collecting examples of pricing increase messaging – both good and bad. Put those in a folder to review when it’s your time.