This week alone, I have seen two great companies stumble and suffer serious damage to their brand. Not only did they alienate customers and cause short term financial loss for themselves, they also cause long term damage to their brand and reputation. This is something that could have easily been avoided by simply following standard practices and putting effort into proper communication. In this article, I will give you my point of view of the events and some ideas on how this could have been avoided.
Atlassian - removing features and failing to communicate it
Atlassian have had problems with communications for a while now, and this in itself is a big problem. This week, however, I was preparing for introducing Advanced Roadmaps to a company I work for, and I was very surprised to notice that some features was missing. As it turns out, this was announced back in May on an obscured page in their documentation.
I assume that a notice was sent out around that time, but it seems it did not reach everyone (I never got the mails) and then apparently they did not think any more of this. A minor notice, barely noticeable in the release notes, can be found for the July 26th release. No marking to indicate that this will reduce functionality and rather than explaining what is being removed they refer to "live plans", which almost no one know what that is in reference to.
My question is: what information did new customers that signed up AFTER May 10th get regarding the fact that functionality they were buying would be removed later that year? When I upgraded to Premium, there was no warning and no mention of this, and I have not received a single email regarding this change.
To make matters worse, it seems that not even support knew this was happening so when I submitted a ticket to ask where my features had disappeared to, they referred to the differences between cloud and DataCenter. Obviously, they had no idea this feature was removed or that it had ever been a part of the cloud product.
So, how should this be handled to avoid upset customers that suddenly loose functionality from a premium product they pay a lot of money from? Well, the simple answer is of course to communicate. In this case, you have 2 communication paths to cover: existing customers and new customers.
Existing customers - Direct communication is a must. No one have time to read release notes or blog posts. People have companies to run, and removing functionality from a premium product is almost unheard of without a replacement product or alternative. On May 10th this should be a focused email to all premium customers where the changes in the product would be clearly communicated and detailed.
3 months before the removal, another letter should be sent to remind the customers about this change. Then again every month to ensure no one misses this information. Every release note from May 10th should have a notice at the top reminding of this change as well. This notice should be properly marked in red with a warning sign to illustrate its importance.
New Clients - Present changes up front. In the upgrade and order form, you should add a notice that the current implementation of Advanced Roadmaps will have changes happening soon that will remove features. You don't want to start a relation with a new customer with the feeling of lying and not being honest.
While not a lot of clients was effected by this change, it has significant impact on TRUST. Not only do I not trust that Atlassian will keep me updated on changes to their products, especially when it comes to removing features, I also do not trust that they will be open with me when it comes to financial issues. This is a huge problem and I know that this is not just me feeling this way as I hear many other Atlassian consultants and customers starting to feel the same way.
Atlassian needs to step up their communication as they seem to be stuck in their corporate bubble lately and focusing more on making money than their customers. I think Pete Morris, the roadmaps/Advanced Roadmaps product owner, displayed this well in his response to me.
While Pete is a great guy and his response is kind and professional, it also shows a distinct lack of understanding of how to communicate with customers. In-product notifications are nice, if you assume that people actually read those, or even understand what they mean. Passive communication does not substitute direct communication, and more often than not the people who need the information are not the day-to-day users. It is the people in charge of tools and work processes and finance that need it, as well as the system administrators.
I will of course reach out to Pete and discuss this with him and others at Atlassian, not to point fingers, but to give my point of view to hopefully prevent similar situations in the future.
Invision Power Services - massive surprise price increase and reducing support without notice
IPS, the company behind the software I use here on the site, stepped into a hornets nest this week when they sprung a massive surprise change on their clients. Instead of a simple update to pricing and their support, they now have a PR nightmare on their hands. Their new website refresh that was supposed to be filled with praise over the new design is now a sad tale of angry and disappointed clients. When writing this the thread has 384 replies and it is bad...
So what really happened to warrant such a massive surge of frustration? Well, it was a combination of things, where I think the biggest issue was that people realized big changes to pricing and support by browsing the new website. There had been no information on this change beforehand, and the changes was quite substantial.
Price updates - This was a huge price change where people not only saw their price go up with anything between 30% all the way up to 300%. Most seemed to get a 50-60% increase in price, however, and while that surprise in itself was bad...
Billing cycle changes - Payment periods was to pay the license fee every 6 months, but after the update this was changed to 12 months. Not only did people see a 50%-60% increase in license costs, it also doubled in size since it is now a yearly cost. For me, this meant that I went from $105 every 6 months to $310 every 12 months. That is a 50% increase for me.
No more support, unless you pay for it - This was a very strange one as IPS now will shift everything towards community support unless you pay a whopping $1250/year. Yes, you read that right... $1250. Unless you pay over 100 dollar a month for ticket support, your support experience will be going through an open support forum. IPS claims that you can ask for private support or use the contact form if you do not want to post sensitive information in public, which seems very odd to me. For me, that just add a step for IPS support, the way I see it?
It could have been different...
This could easily have been avoided, and it could even have been a positive spin on things if handled correctly. No one really mind the price change because we all knew that it had to come sooner or later. The change should have been done gradually, however, with the proper communication.
First announce the change 3 months in advance. IPS need to increase prices to up the development and support efforts. Everyone wants to see more features and bugs fixed faster. Everyone wants support to be better. Not a hard selling point to make.
Offer anyone that want to commit to IPS to pay for a longer period of time now before the price change. - Show that you care about the current customers and also get a big chunk of short term cash to invest.
Next renewal price remains the same for all existing customers - Again show that you care and appreciate the current customers by extending the existing price 6-9 months depending on when their next billing is due. #2 above should cover any current cashflow need, and you get a ton of goodwill. New customers pay the new price, of course.
Offer multiple billing cycles. - Matt tried to motivate having just yearly billing with that customers can get confused or happen to pick the wrong cycle. I don't buy that as it is a UX issue and they own the product in charge of billing. I had a web hosting service for 15 years with multiple billing tiers and no one ever got confused by that. Having multiple options would help a lot for many that have problems funding $300 one time fee, but find it easier to fund maybe $30 monthly. Yes, you can do that anyway if you like with the ability to deposit money, but it is not something that people are used to.
Define your support properly and offer ticket support. - While I get the idea to move questions to an open area to reduce the number of same questions being asked over and over, that is not the answer to the problem. I am all for the community driven help with IPS staff doing the heavy lifting, but you need to have an option for ticket support as well. I think it would have helped to put classification on the support tiers to make it easier to understand:
Tier 1 support - Paid Premium support with response time within 1 hour and a resolution time within 48 hours.
You can even offer per ticket support where a customer can pay a sum for priority support either per incident or for say a month for example during a migration or critical sales period.
Tier 2 Support - Ticket support in a private forum with only own tickets settings. This is used only for technical support issues, meaning that something is not working with your software.
Tier 3 Support - Community driven support where you can ask any question and get help from the community as well as IPS staff.
The key point here is to communicate, in advance, present the negative changes with a positive that motivates the negative. A price change should lead to improvements for the users, like better support and faster feature cycles or investments. This way you motivate the change and you give time to absorb it. This is important because the human mind is very sensitive to change and rapid change has a tendency to cause frustration or even anger.
IPS did the complete opposite by letting their customers discover the changes on their own and then selling the change with no upside for the customers at all. Instead the customers now pay more for less as prices went up and support was removed. That is a double negative, which is extremely hard to sell to your customers.
This was a part of the email that was sent out hours after the release of the new website and the new price model.
The wording and the way this is presented is directed inwards. It tries to motivate price changes with an historical reluctance to increase prices, which is pretty much what every landlord in the world do when they want to make more money and care nothing about their tenants. It has never been received well and it was not in this case either.
Claiming that the services and products hold great value is a moot point to make towards their customers. We know this, that is why we pay in the first place. What we want to know is why should I pay 50%-60% more tomorrow compared to today? What has changed and how do I get better value for paying more? Making claims that major features have been adding and referencing gamification (which is not a complete system btw), anonymous posting and Zapier integration does not really motivate why you want me to pay you more. I already have those features!
Switching to annual renewal billing because it is a simpler way and in line with industry standard show a distinct lack of connection with the customers and it is again directed inwards. It is not easier and more wanted for the customers, but many would have loved to have that as an option. I am of course talking about companies, but they are not the only customers IPS have.
The fact that this came out hours after the release of new prices and changes to support models enforces the feeling that this was an afterthought and that IPS care so little for their customers that they only informed them after they started screaming. I know that is not how IPS see their clients, but the perception is still there due to this mistake.
IPS failed in communication and people are leaving
Due to this very simple mistake to not communicate and not making sure the customers understand the reason behind the price change this has now caused many customers to cancel their subscriptions. This will have a ripple effect on the mod creators either leaving or increasing their prices substantially. Less mods means less customers and less customers means less community support, which leads to a feeling of abandonment and ultimately a reduction in sales.
Worse though is that IPS loose their customers TRUST. Again.
IPS is on a very dangerous path, and has been for a while, due to the fact that they seem to lack a communications officer that have experience with communication strategy and financial strategy. While Jordan is doing an amazing job trying to communicate with the customers on the forum and social media that is not enough to save them from blunders like these. Not even Matt trying to do damage control will do anything in this situation.
The damage is done.
The ony question is how will IPS handle this now that they have screwed up. They can either continue to ignore the vocal customers that do not approve of these changes, or they can roll back and make a new plan to roll out later this year.
If they ignore the customers I think they are going to have a really bad 2022, especially as people get back to life again and spend less time online again. Many struggle with finance now and it is not hard to motivate a move to less capable competitor with such a huge increase in pricing. Customers will drop like flies, not just because of the changes to price and support, but because they no longer trust IPS as a company.
If they roll back and make a proper plan in communication with their customers, then they have a chance to salvage some customers at least. Many will still leave due to the lack of TRUST, but the chance for redemption could salvage that to some degree. With the proper communication they can even turn this into a win, but that would require a communication plan that is very different than what we have seen so far from IPS.
Communication is not a nice-to-have!
If you run a company then you sould know that communication is not nice-to-have. It is an essential part of your business and if you fail in communication you not only can, but you will, damage your brand and business.
Anytime you deal with change for your customers, make sure your communication is aimed towards them. Make sure you present the benefit for them, not for you. Change is never accepted up front, so you must always sell it to prevent backlash. It is very difficult to fully recover from a communication mistake, but you can mitigate and in some cases even improve your relation with your customers.
So don't ignore the importance of good communication and if you are not a communications expert yourself, hire one. It will save you a ton of money from stupid mistakes like Atlassian and IPS have stepped into and it can increase your revenue a lot.