17 Comments

  1. KTS915

    “It’s been said before and bears repeating, “the days of low-priced plugins and unlimited everything are going by the way side.” WordPress product businesses that operate with unlimited anything are almost certain to fail as it’s an unsustainable model. Customers need to realize this sooner rather than later.”

    Actually, it gets no truer when it’s repeated than it was the first time someone said this. Since when has there only been one way to compete in a marketplace?

    Each plugin developer needs to work out for him- or herself how s/he plans to compete and be successful (including financially successful). Sometimes the apropriate model will involve charging recurring fees and providing long-term support. But by no means always: providing support can be very expensive, and it can also be difficult to ensure consistency and accuracy among support staff. Lack of consistency and accuracy can undermine the brand so badly that the whole thing unravels.

    There is another way to compete, which you seem to have overlooked. That is simply to sell more units. (Interestingly enough, the world’s biggest corporation essentially follows this model.) Unless the market in WordPress plugins is already saturated, which it clearly is not, this will also continue to be a perfectly viable business strategy for some.

    I don’t think either of us in a position to tell each plugin developer which model will suit them best. All we can say for sure is that it is a question they need to consider and make an informed decision on.

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    • Jeff Chandler

      How many times have we seen theme or plugin companies find a way to get rid of offering unlimited updates, support, or anything else? The reason for the change has always come back to sustainability. I’ve been a long time advocate of unlimited anything is a recipe for disaster. Do you know of any WordPress product companies that are still doing unlimited updates? If so, how much time do you give them before they find a way to switch away from that model?

      I don’t have all the answers and as you say, business owners have to test the waters and find a recipe for success for their situation but I don’t understand how unlimited anything could be part of that equation.

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      • KTS915

        “I don’t understand how unlimited anything could be part of that equation.”

        Really? I know you aren’t one for travelling outside the US but, in Europe, it’s common for insurers to offer unlimited liability insurance. In the US, I get unlimited calling to over 50 countries with Vonage. I could go on.

        It all depends who the target market is, what is being sold, and — let’s be honest — the personal preferences of the developer.

        I can guarantee that someone will be repeating your mantra in a few years time, and yet there will still, even then, be developers providing something unlimited and making a profit. (They will probably be grateful for people like you, though, who may have scared away their competition.)

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      • Ben Fox

        Unlimited Liability insurance is a level of service that still requires a monthly or annual fee.

        Unlimited phone service is a level of pricing that still requires a monthly or annual fee.

        Unlimited Walkthroughs Plays on SIDEKICK is a level of pricing that requires an annual or monthly fee.

        Without MRR, all you have is a Ponzi scheme and/or a product that can’t be supported or improved upon while still turning a profit.

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      • KTS915

        Ha, ha!

        I was giving examples of where “unlimited anything” is sold. Those markets happen to be saturated, so some sort of recurrent fee is, of course, required. In a market where there is still a huge untapped pool of potential customers, just focusing on selling more units is, in some circumstances, a perfectly viable business strategy.

        And selling more units is not a Ponzi scheme. A Ponzi requires new money to finance old. Selling more units doesn’t require that at all. Enabling previous purchasers to upgrade to the latest version actually costs nothing, so there’s nothing to finance there. The cost is in creating the new version, which is financed by new purchasers.

        So it’s nothing like a Ponzi, and your hyperbole isn’t going to change that.

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      • Gary

        StudioPress still offer lifetime updates and support.

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      • Jeff Chandler

        Lifetime is substantially different than unlimited.

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      • KTS915

        Semantically, “lifetime” and “unlimited” are different, that’s true. But not in the practical world of WordPress plugins.

        There is a plugin — I won’t name it, because this dicussion is not about it or its developers — whose free version is currently downloaded on average over 400 times a day (around 12000 a month). Its Pro version costs an average of about $100 for unlimited use and updates.

        I don’t know the developers’ financials, but if just 100 of those users upgrade to the Pro version each month, that’s $10,000 per month or $120,000 per year.

        The plugin has been around for years, and has always been sold by the same model. Updates are produced every few weeks. Every so often, someone tells them they should move to a different pricing model involving recurring charges. They clearly have no interest in doing so. Isn’t it possible that they actually know what they are doing?

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      • Gary

        Ok then, they offer “unlimited” support, and you can use their themes on an “unlimited” number of sites. This is taken from – http://www.studiopress.com/faqs

        “HOW MANY SITES CAN I USE THE THEMES ON?

        You can use any theme package you purchase as many times as you’d like, on as many websites as you desire. The purchase of theme packages allows you unlimited use of the themes, as well as unlimited support.

        In other words, we do not restrict your use to a specific number of sites, or a specific period of time in which they can be used. ”

        Jeff, you stated that “WordPress product businesses that operate with unlimited anything are almost certain to fail as it’s an unsustainable model”

        Do you think StudioPress are almost certain to fail? How much time do you think it will take them to switch from an unsustainable business model?

        I think subscription models are the most viable method for most WordPress businesses, but you can’t ignore the elephant in the room – one of the biggest theme vendors does use an “unlimited”, non-subscription based model.

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  2. cbunting99

    I would imagine that revenue for this sort of product would be hard. It’s new for WordPress, but we have had software and technology to do with already for at least the last 14 years.. With sites like http://www.videousermanuals.com that already cover WordPress and creating training tutorials.. If you know where to look, you can even get software to do it for free.

    https://wordpress.org/plugins/tags/tutorials
    http://www.woothemes.com/products/sensei/
    http://wp101plugin.com
    https://premium.wpmudev.org/project/unbranded-video-tutorials/

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    • Ben Fox

      You make a fair point. Educating an eco-system on why a new method of support, training and learning is better is never easy but I know we’re up for the challenge.

      There will always be a place for videos in the education system but only as a supplement to a fully guided and interactive Walkthrough library.

      We’re excited to see how we can disrupt and improve and look forward to your feedback.

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  3. Piet

    I agree with @KTS915, there simply cannot be one-size-fits-all for this as there is also no uni-size for development fees between companies…

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    • Ben Fox

      I don’t think anyone is advocating for a one-size-fits-all pricing model. What Jeff and I are saying is that Unlimited, forever, is an entirely unsustainable model in the long-run.

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  4. David

    Of course, every business has to find the model that works for them and I think it is totally cool that you share Sidekick’s experiment and their thinking and process. However, suggesting that there is only one sustainable model seems silly and is not responsive to the market.

    Here are two other options that might work, responding to the market and being sustainable:

    1) You can always decouple the price of support and the price of the plugin or theme. Provide the plugin or theme with a lifetime of updates but sell support separately.

    “Our prices would go up exponentially because we would need to make sure we’re covering the lifetime COSTS of a customer. Not a smart way to do business.”

    I find that 90% of my questions are answered in the product support forums by responses to other people with similar questions. I’m looking for support during the first few months while I’m learning to use the plugin or theme. Build up a knowledge base and make the forums open for customers but restrict posting to those with current support. Then charge for support separately after the first year. There is no reason that I should pay for the unending questions of people who cannot or will not use Google first.

    2) Price the lifetime version of the product separately. I imagine that over time you build up data that shows an average of how many years a customer will renew and maybe another number for your top 25%. Say an average is two years and the top 25% is 3.5, so you price the lifetime subscription at 3.5 times the annual cost. This drives sales towards the top tier level and grows your business, while providing a reasonable option for those who want a lifetime subscription.

    Do you really think there are no other viable options?

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  5. Hesham

    Obviously; one payment for unlimited updates offers are not for everyone. In some cases it’s a very bad decision, this goes for both the seller and the buyer.

    When I priced my first WordPress product I didn’t know what to do, so I just picked a number!

    Seriously; I just picked $67 with no legit reason! And it was selling “very good”, mostly for its value.

    I don’t believe in competitive pricing, I will try hard to make my product/service the best and provide the max level of support I can. I prefer to value my work, charge what I think I deserve and work with less number of clients to maintain that high level of support.

    I think that no one has to offer unlimited updated unless they get at least 2 years of support cost upfront, means I will set my price, then add to that two years of support cost, and every one should be happy.

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  6. Kaz

    I just wanted to say thanks for highlighting this article by Sidekick. I would say I am on the waiting list to see this go live and I missed that article. Ben has raised some key points that I am bookmarking my future SAAS projects.

    I think the article should be rewritten to help persons with pricing strategies. I would love to read more.

    Good luck Ben.

    Thanks.

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