This post was contributed by guest author Sami Keijonen. Sami is a math teacher who enjoys learning about the web, accessibility, and WordPress. He juggles between freelancing, building themes at Foxland, and teaching.
That’s a bold move, but I expect nothing less from them. They want to think outside of the box and push the boundaries. Based on the theme shop’s wild yet functional designs and the anti-corporate thoughts expressed in the co-founder’s Our Saga article, I have to say that I like PixelGrade’s approach.
Vlad Olaru, co-founder of PixelGrade, was kind enough to answer a couple of questions about the Pile theme price increase.
Why did you raise Pile’s price by 281%?
The first obvious answer is that now we can set our own prices on ThemeForest due to Envato extending the Author Driven Pricing to the WordPress category. We’ve been preparing for this for a long time.
But just because you can do something, that doesn’t mean you should, right? We have been thinking about our business strategy for quite some time now – and not in a shallow way.
We’ve gone through a painful process of rediscovering our core values and purpose, what kind of experience we wish to offer to our customers, and what kind of customers we want to attract and keep aboard.
A direct consequence of this whole process is rethinking our pricing based on our firm belief that not all products are created equal. We haven’t thought in terms of percentages (it’s the first time the 281% comes to mind – thank you for doing the math), but in terms of our overall effort and value delivered to the customer.
Why $225 and not $150, for example? Did you do some research before making the decision?
Yes we did, and it was very thorough. We did not base it on market fit, market tolerance, or anything like this. On the contrary, it was an internal research focused on the the two pillars mentioned earlier: how much do we work for something (effort invested) and how much does it help our customers (real value).
First, we needed some numerical relation between the various types of themes we produce, in terms of complexity. We’ve divided each theme’s design into components and identified the overlaps, meaning work that is built upon to deliver higher level functionality (i.e a style guide is used to create a blog section).
So, with a clearer picture of the overlaps and the actual effort needed for each stage, we’ve analyzed how much value a customer gets from these specific components.
This helps us to fairly and wisely distribute our efforts, while at the same time identifying where we can decrease or increase the price. With higher delivered value comes a greater acceptance for higher prices.
In the end, we’ve come up with a set of price multipliers starting from our lowest offering, the blogging theme. By the way, we don’t intend on selling the core design separately. With this clear relation between the three categories, we’ve ran simulations to see where is the point where we can generate a healthy monthly income and get a manageable number of customers.
“Manageable” is a very key concept in this whole scheme because it relates directly to the experience we wish to craft for each customer through our Customer Happiness department.
We feel personally involved in the success of our customers’ online endeavors. You can’t really do that when you focus on volume. A close and personal relationship needs a thoughtful balancing act for it to flourish.
So there you have it – the “magic” revealed.
What kind of customers are you looking for with this price change?
As I’ve said before, we are currently focusing on three main personas:
- Hobby-driven people (storytellers, journalists, travelers, life/fashion/design bloggers)
- Creative Entrepreneurs (photographers, visual artists, designers, architects)
- Small Local Businesses (restaurants, coffee/tea shops, boutiques, small studios)
I don’t think all the people that fit these categories can digest the prices above, at least not in the current state of the market. On the other hand, we are not delusional. But I highly believe we can make a pretty good case to enough of them about the added value they get when trusting us.
Of course, it will be an uphill struggle with the habits and assumptions ingrained by the years of “bazaar marketplace.” Our bet is that we are doing things right and the right thing, at the same time.
So if a $59 customer won’t buy a $225 theme, what is PixelGrade going to do to attract $225 customers to the platform and specifically, the item.
First of all, you need to see this whole (not so new) pricing structure in a more global approach. We are currently selling our themes through our own shop, on WordPress.com, and ThemeForest.
For about two years now, all of our shop and WordPress.com themes have been priced at $125. They are all blogging themes. We are pretty happy with how things worked out. So we don’t know if ThemeForest is the place where people would be willing to value our themes at these prices. We are hopeful and we will definitely give our best, but it is still too early to tell.
We are going to focus most of our marketing efforts on attracting the right kind of customers to our own shop because we are in full control of the whole experience. On ThemeForest and WordPress.com we can’t do the same due to how a marketplace at this scale functions. Hopefully, Envato will do its part (as it has been in recent times – kind of slowly for our liking, but still) and the right type of potential customers will get to judge our offering.
Are you experimenting with your top-selling themes or just doing a trial with one of the themes in the collection?
Once again, I think times are changing on ThemeForest and we are taking it one step at a time. The ideal future would be one where all of our themes, regardless of distribution channel, would be priced the same.
We are definitely keeping an eye on the opportunity to take the next step, but it is still too early to give a time frame.
How do you bring the rest of the marketplace into 2016 pricing without being accused of price collusion?
Price collusion? I had to google that.
We have no plan to make any sort of agreement with anybody. We will do what we feel is right and aligned to our core values, talk about it, and, hopefully, others will follow suit.
Now that I have read that definition, I realize that you might be referring to the concern (expressed by some pre-sale comments on ThemeForest) that we might be driven by greed here. Far from it. If that was the story, we would have lowered our prices and driven out the competition (as I suspect some will do). Like they say, with great liberty comes great responsibility.
We will shape our message on value-pricing and do our best to live up to these self-imposed standards. The customers will be the most accurate judge of our stance on this.
Are you ready for higher prices?
Thanks again, Vlad, for answering the questions. It will be interesting to see how it goes.
I don’t have a strong opinion about the company increasing prices to that degree. I can see myself selling themes for $125, but I hope $225 works well for PixelGrade.
As a customer, would you buy a theme for $225 and what would make it worth it?
Any other theme shops have plans for increasing prices?