How Not To Price

from the quick-lesson dept

While the mainstream press picks up on the (boring) obvious story that Six Apart has released version 3.0 of their popular Movable Type blogging tool, they seem to be missing out on the bigger story: the pricing structure they set up is being almost universally trashed by loyal Movable Type Users. I've never used Movable Type so I have no opinion one way or the other on the software or whatever they decide to charge for it. However, it seems that they've screwed up one of the most basic rules in pricing: never take away features and charge for them. You can charge for new features - but taking away features that were included for free before always pisses off your most loyal customers. They feel suckered. They feel like you've pulled a bait and switch on them. In this case, many MT users set up multiple blogs with multiple authors. That's what the software encouraged them to do. Now, they're looking at the pricing and realizing to continue doing so on the new platform would cost them around $600. "Costs more for doing less" isn't a way to make users happy. One other rule of pricing: recognize the competition. There are an awful lot of blogging tools out there, and more are coming out every day. Not all of these are free, and people clearly pay to use certain tools. However, ignoring competitive pricing (as Six Apart appears to have done, since the prices they're offering are well above the competition) doesn't make much sense - especially when the switching costs really aren't that high. Anyway, it looks like Six Apart has gone into damage control mode, trying to explain that this is just a "developer release." However, they (of all people) should have known how their users would respond to this offering.


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  1.  
    identicon
    Anonymous Coward, May 13th, 2004 @ 6:44pm

    No Subject Given

    Check out Wordpress blogging software. (http://wordpress.org/)

    It's based off the old CafeLog engine and gets more advance with each new version. Easy to hack onto.

     

    reply to this | link to this | view in thread ]

  2.  
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    Chris ODonnell, May 13th, 2004 @ 7:24pm

    No Subject Given

    I've got over 1000 entries on my MT based weblog - but I'll be looking to move to an open source solution as soon as I have time to investigate which one will be the easist to transition too.

    As a single user blog - I believe I can use MT 3.0 Free when it is released. However, its been my experience that the free version of paid software always gets worse with time. If they are going corporate I am going elsewhere.

    This is a perfect example of the dangers of closed source software.

     

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  3.  
    identicon
    Tim, May 14th, 2004 @ 12:39am

    Business lessons from MovableType's New Coke annou

    Business lessons I would take away:
    1. Trying to get people to pay for a product that they have been getting for free is very hard. Getting them to pay more for less is almost impossible.
    2. Don't comment on pricing until you have decided what it is. Certainly trying to appease users for being very late to ship a software product by making a promise about price that you can't or won't keep is very foolish.
    3. Do a cost /benefit analysis before you decide to enrage your evangelist and developer community, and make sure the benefits are worth it.

    Sometimes the benefits are worth it. As Alex King suggests, it may be the right business decision to get rid of the budget conscious, handhold-needing customers, and focus on bigger budget commercial customers. Just make sure the customers you shed aren't also your best salespeople.

    It may well be that Six Apart has enough in-house programming talent and enough of a commercial reputation that they don't need the army of volunteer contributors and salespeople any more -- I just hope they did this as a conscious decision, not as the bonehead decision it looks like.

    If not, I suggest they change it soon. The longer they wait, the worse it is going to get. Remember New Coke?

    More at Ben and Mena Trott: You forgot to dance with who brung ya.

     

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  4.  
    identicon
    todd, May 14th, 2004 @ 10:28am

    pull

    As someone who has done quite a bit with MT, I'm quite satisfied with its current feature set. not only have they disheartened me from an upgrade by announcing steep pricing (first), they haven't created (in me) any real need to upgrade.

    I'm much more likely to buy when the features have been teased in front of me for a while. They have tons of beta customers, and a "trackback" column that has always been on their site, but no confluence of the two. Surprising to me.

    The developer community is a different animal entirely -- there are about 10 people who have generate 80%+ of the plug-ins for MT. Appeasing them is easy and cheap.

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous Coward, May 14th, 2004 @ 10:42am

    most basic rules in pricing

    However, it seems that they've screwed up one of the most basic rules in pricing: never take away features and charge for them.

    Um, people said the same about RedHat when they changed their pricing.. but didn't their profits shoot up as a result?

     

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  6.  
    identicon
    Eric Rolph, May 14th, 2004 @ 3:06pm

    No Subject Given

    You've nailed it. Good post Mike.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    frankiejr, May 14th, 2004 @ 4:57pm

    Clients on MoveableType


    We had a client recently that wanted a MoveableType solution. We set him up, buying a commercial license for $150. They were very impressed by the end result, and overjoyed by the ease of use. The site has 22 seperate blogs and close to a hundred authors.

    Does that mean we'd have to negotiate a custom commercial license with Six Apart that could cost my client close to $1000 (estimated)?

    Also, are newly discovered vulnerabilities going to be patched, or are they going to force upgrades through non-support?

     

    reply to this | link to this | view in thread ]


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