Oct 11

Chargify News: New Pricing, Features & More

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UPDATE

Over the last few hours we’ve received a ton of feedback from our merchants based on the Chargify pricing announcement.

We want you to know that it has not gone unheard.

As an existing Chargify merchant, we appreciate your support over the past year and we want to continue to see you grow with us.

To meet your needs when you’re starting out, we’re offering our existing merchants the Bootstrapper Plan for $39/month. It allows you to manage up to 100 customers.

To signup for the plan, login to your account, go to My Account >> Manage Your Plans, and choose Bootstrapper.

We know that this is still an increase, but we hope you see the added value in our :
* 24/7 U.S. based phone and technical support
* Level 1 PCI compliance in a few weeks
* fully coming out of beta in order to serve you better
* and listening to your Uservoice feedback to develop Spreadable

Please feel free to reach out to us at 800-401-2414 with any questions or concerns. Thanks

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ORIGINAL POST

Over the past year, Chargify has grown as merchants sign up and grow their businesses. We definitely appreciate everyone’s business and support.

But the needs of our merchants and the economics of our business and market have shifted from what we projected when we set pricing in 2009.

A key concern among merchants is knowing that they’re depending on a long-term vendor for their billing provider. As part of Grasshopper Group, we have a lot of advantages, but we’ve also done a lot of work to specifically meet concerns of Chargify merchants, such as moving our processing to one of the top facilities for financial companies in the USA, as well as bringing US-based teams online for 24/7 L1 support and network operations. And two weeks ago, we added our first L2 tech support person who’s a serious developer himself.

One specific thing we’ve noticed about pricing is that relatively few merchants make use of the distinction between free Users and paid Customers. But our support costs are affected because businesses that have a lot of users generate more business activity, even if it’s free activity. More users just means more activity. In addition, the distinction between free Users and paid Customers generated a fair amount of confusion. So, we decided to just count everyone you manage through Chargify as a “Customer”.

Now, having said all this, I’ve communicated with merchants who asked about the new pricing and I let them know that while we do need to migrate everyone to the new pricing, we also understand that some merchants who came on-board recently may have a more difficult time due to the new pricing and the timing of it relative to their business.

We’ll work with everyone to make sure we remain affordable for your business, but we are moving away from free Production accounts. As one merchant said, as long as we remain a “reasonable business infrastructure cost”, then he’s happy.

Here are the new pricing plans. The new pricing plans include four plans and are based on the total number of customers (paying and non-paying combined) you have in your account. The new plans look like this:

image

Why we’re changing our pricing

  • Supporting a large number of free merchants doesn’t pencil out

    In a large, consumer-oriented market, the model can work, but as other famous Freemium bloggers have written, it doesn’t work well for B2B services, and we’ve found that out in the past year with 3,000 merchants on board. The number of SMBs who need our services represent a relatively small market; it takes a long time for most of these businesses to grow; and those that do make it to 100+ paying customers realize that they really want a solid organization in Chargify - 24/7 people working in Support, Network Ops, Data Center, etc. These forces mean we have to raise prices to run an effective and long-term sustainable business.

  • 24/7 US-Based Staff

    As mentioned above, Chargify is much more than software. It’s a lot of dedicated people here to help our merchants anytime, and to keep our service moving forward with new capabilities.

  • Level 1 PCI Compliance

    We are working toward Level 1 PCI Compliance - the highest level of compliance a business or financial institution can achieve. It’s a process that started early this year and will continue toward the end of 2010. Level 1 gets deeply into our business processes. For instance, it requires us to have records of management sign-off for software changes, etc. It’s burdensome in some respects, but makes Chargify a tighter organization and is required by some of our merchants and partners.

Again, please note that we will work with our merchants to make these changes work for your business. We are shifting away from free Production accounts (those processing real money), but we will be flexible in working with our merchants. And test accounts are still free.

If you have any questions or concerns please feel free to call our support team at 800-401-2412.

 

bummer, we just signed up for chargify and we could barely afford the old prices, but these new plans don't seem very fair at all, especially when you add the free customers to the paid subscriptions.

also, it seems like a big jump from 2000 - 10000 members. if i had 10,000 paid members, i could see paying $999 a month, but i have just over 2000 members and $999 seems steep. can you put a plan in for up to 5,000 members for $499 or something?
By becker on October 11, 2010 at 12:04 PM
Wow, no more freemium model huh?

We went from having to pay $0 until our business made enough to pay more (what was it? 50 customers?) to $99 a month.

That came a little quickly without much warning.

I truly appreciate all the work you've done and the service you are providing, I just wish we had been given more notice and a little more clarification on what's happening with the legacy plans.

And I also wish you had kept some of the freemium model that allowed really small startups to get up to speed before they are comfortable paying $99 a month for the service.

Germán
By German on October 11, 2010 at 12:31 PM
Without a plan for very small, early-stage startups, you're going to lose a few customers—possibly us included. The free and $49 plans were going to work well early on for our low-revenue per subscriber service. We're ramping up slowly over a period of several months, which makes it worse. $99 is too big a chunk of our early income.

The other plans don't look nearly as good either. Chargify is a great service, but now its a premium one too, which is sad for the few of us who were excited about not having to choose based on economics!
By Evan Owen on October 11, 2010 at 12:34 PM
The only unfortunate thing about these new plans is that there isn't any pricing tier that allows you to have any amount of customers (even a small amount) without paying at least $99.

When we originally decided to use Chargify for our new app (not released yet) we did it with the confidence that we wouldn't be paying monthly until we were pulling in some kind of revenue from paying customers. That safety is what sealed the deal for us over things like Saasy and SaaS Kit.

Don't get me wrong, the $99 tier is a very fair offer, its just that its a frightening starting tier for a small startup that isn't sure whether or not their new app is going to be a hit.
By Tyler Vincent on October 11, 2010 at 12:36 PM
Really disappointed that the free option has been totally removed, that was one of the big plus points of Chargify for me. For a new startup, like FlagBin Live, it meant there was no monthly outlay until some paying customers were onboard. Even if Chargify was free for a really low number of customers (say 5 or 10) it would be OK.
By Chris Richards on October 11, 2010 at 12:37 PM
As someone who will be looking for this type of service in the near future, I agree with Michah that the pricing for a start up, especially one that's bootstrapping is not attractive at all. At this pricing it makes more sense to build my billing system and use Authorize.net.

Someone else also said:

Spreedly: $20/month + $0.20 per transaction. .. and I'm using it on 2 apps.
I was considering trying out Chargify, but not anymore. Unlike Spreedly, Chargify apparently wants me to pay a lot more up front for users I don't even have yet.

Additionally: Your pricing page does not look right in Chrome 6.0.472.63 on Mac (latest current). Screen cap: http://i.imgur.com/ffxIy.png
By symkat on October 11, 2010 at 12:50 PM
If I was starting and online service I would never pay $99 a month for clients I don't havet yet. For Max and Grow I get it, you're helping me make money so why not get a good chunk yourself. Though for Start you're literally taking something for nothing. If I had 1 customer paying the average saas app price, is your service worth $99 a month to me? No. After the first 30-50 customers, sure $99 is worth it.
By Andrew McCloud on October 11, 2010 at 12:58 PM
I'm extremely disappointed by this news. Chargify's free plan made it the perfect way to dip your toes in the SaaS arena with a new app and see if it made sense. Sure, there were gateway and merchant account costs to pay, but an extra $99/month just to get a foot in the door is crazy.

I thought you also might like to know that you're receiving quite a beating on Hacker News. http://news.ycombinator.com/item?id=1780348
By Micah on October 11, 2010 at 01:57 PM
Sad - having built my integration for a web app we were supposed to go live with today, and finding out today that you were raising your prices on us by $1,200 a year. Maybe the cost isn't the biggest thing - it's that we were suckered into thinking that the free startup account would be around until we outgrew it.
By James Sullivan on October 11, 2010 at 02:17 PM
I'm extremely disappointed that more thought wasn't put in to this. Offering a Free plan allows users to buy into Chargify, and grow with them as their application grows. Not offering a Free plan for up to 10-20 customers is absolutely ludicrous. The new barrier forces startups to consider "Even if I have 1 customer, I'm already down $1,200". It just doesn't work.
By Grayson Koonce on October 11, 2010 at 02:22 PM
Does this mean that the user portal that has been talked about earlier this year will be one of the "new features." It would make sense for this to be the case, and I would be willing to pay $99/month, if I knew that I didn't have to get a programmer at $X-hundred/hour to build that into my account, similar to what the payment pages are like.

Right now, this is great if you know web programming language and communicate with your Chargify site and your website using the API. That said, my implicit costs just increased, considering I pay for Auth.net's CIM and have to fork out for a developer, too.
By Andrew on October 11, 2010 at 03:15 PM
We just want to say that we appreciate all of the feedback we've received from our merchants here on the blog, on twitter and via email. Despite some of the comments, it's nice to know that we have such passionate merchants!

We are giving current customers the opportunity to sign up for the Bootstrapper plan: 100 customers at $39/mo. We hope this will help in the transition for our smaller merchants.
By Casie Gillette on October 11, 2010 at 03:39 PM
I'm a bit confused. If I have 200 people who have trialed my app and are not paying for it (therefore they arn't free subscriptions), do these count towards my customers?
By Paul on October 11, 2010 at 03:40 PM
Paul - We are no longer deciphering between free and paying customers. Any customers you have in there will count toward your customers.
By Chargify Team on October 11, 2010 at 03:47 PM
While I can surely understand the pricing increase due to the new 24/7 support, I feel that without a free license, I cannot convince my clients to use your service. Even million dollar firms that I often work for give me hell about anything that they get charged a monthly recurring charge for without first seeing a return on the investment, and with the current gateway provider fees and reseller fees, I don't see them being convinced to incur another unnecessary, albeit useful, service.

While the "Bootstrapping License" may be nice of you to offer, I am now forced to use Authorize.net's direct cURL API, thus eliminating your service. This is unfortunate, since just today I finished an entire billing system for a client that I am now going to have to rewrite.

I wish Lance and the entire team good luck though!
By Allen Gingrich on October 11, 2010 at 03:48 PM
Bummer. I really felt like you guys had something with your other pricing scheme. 50 free customers is great for startups. Who wants to immediately start forking out $99/month when they're not even sure their product will sell?

Can't wait for some company to come along and just kill it in this space. Recurring online payments is the biggest PITA.
By Jeff on October 11, 2010 at 03:54 PM
Ugh.
I would expect some "Grandfathering in" of current clients at the rates that they came to expect. You have just more than doubled our budget for your service, without major improvement to the experience.

I know you are an incredibly committed group, and I have appreciated the service you have provided for us when needed, but this certainly came as a shock.

I can only hope that you have the capacity to shock us all with positive growth and sweet features to make up for the bitter taste left today.
By Jim on October 11, 2010 at 03:58 PM
In reply to "Chargify Team" - I presumed a 'customer' would be someone using the product.

Someone who had signed up for a trial but didn't pursue it (subscription would show as cancelled I presume) - how can this count as a customer?

I think we have large potential to have many paying customers in the near future however Chargify is really pushing us away.

Would love to chat with Lance but not had a reply to my email from yesterday.
By Paul on October 11, 2010 at 04:16 PM
Another +1 to the addition of a bootstrappers plan. $99/month seems fair for the number of users but for products that are just launching it is pretty steep. Put it this way - When you launch you are looking for your first 10 customers to at least prove there is some market. We are lucky in that our business has a reasonably monthly fee so once we have a few customers on board the cost is not an issue but it still is in the early days.

How about making a plan (say $19.95/month) for n (10?) number of customers. It lets people try the product live without the outlay.
By Glen Barnes on October 11, 2010 at 05:41 PM
I'm honestly not concerned about the lack of a free plan. For us, it certainly helped us get started, but we're past that now. I feel for the other startups that won't get the cheap startup costs that we had. Paypal is all you have now.

The one thing that bothers me GREATLY about these new plans is the counting of "non-paying" users. As has been mentioned, it totally destroys users planning on using trials or a freemium model. You'd have to be a nutcase to use Chargify for these types of plans now.

Fortunately for us, we don't use chargify to handle our "freemium" customers, and I can only recommend to other users that they handle their free users themselves as well. Unfortunately, over time as users subscribe and then downgrade to our free plan it is inevitable that these plans will become worse and worse value as "downgraded" users will continue to cost us money without making us a cent.

Further to this, we had planned on using Chargify to do "one off" billing, but again, the new pricing model has killed this idea off. In short, these new plans have made Chargify a lot less flexible as a billing system. Suddenly competitors that charge per transaction seem like a much better deal.

I'm looking forward to having further discussions with the guys about these issues. These are some of the most passionate and focused people I've ever had the pleasure of dealing with. I'm sure some sense of reason can be found amongst the furore.
By Alan Downie on October 11, 2010 at 09:48 PM
I have a feeling you are going to get some serious backlash for this. In our case, you just made it easy to decide between Chargify and CheddarGetter. After carefully evaluating both options, we had pretty much settled on Chargify. But with this change, you've lost our business.

The issue I have isn't related to the fees you are charging, although I do think they are unrealistic. I can totally respect you needing to make money with your service, but in my opinion you are going about it completely the wrong way.

The problem is that you changed the prices so drastically with no warning whatsoever. Plus, with no free tier any longer, you are creating a significant barrier to entry that many companies will not be willing to go past.

Many of your customers have invested lots of time and money into implementing solutions that utilize your service. You're essentially forcing them to decide between spending that time and money again to re-implement with a different platform, or just just suck it up and pay you.

In the end, it feels like a bait-and-switch tactic. How can I possibly trust your service after this? I'm just glad we haven't started implementation yet, or I'd be furious.

Best of luck,
Tauren
By Tauren Mills on October 12, 2010 at 03:10 AM
I was going to sign up our new business in the next few weeks. Now I am going to develop something myself. What's more is I only heard about you guys a few weeks ago. Oh well, seemed like a good idea. Maybe you need a competitor?
By Matt on October 12, 2010 at 03:46 AM
We were looking at your service for a number of clients but the old prices were already raising question marks, with the new prices it's put you completely out of contention.

Also, what's the deal with dumping non-paying customers in with the paid customers?

It looked like you had the beginnings of a good service going whilst you were in beta, it's a shame you've had to alienate yourselves so much from the startups which likely used and promoted your service.
By Kevin Ansfield on October 12, 2010 at 08:32 AM
$99 a month seems really steep. That breaks down to $5 a user!
So if I was selling a monthly plan for $50 then I would really be getting $45. That is just nutty. You only get charged $1.40 per user if I use Amazon Simple Pay.
By Donny V on October 12, 2010 at 09:40 AM
From Comment above:

"Further to this, we had planned on using Chargify to do "one off" billing, but again, the new pricing model has killed this idea off. In short, these new plans have made Chargify a lot less flexible as a billing system. Suddenly competitors that charge per transaction seem like a much better deal."

Oh man. I hadn't considered this. We too were looking at doing a lot of one-off billing; use Chargify as a all-in-one process portal for even single purchases of product, not just subscription/recurring.

We better not do that, otherwise we will quickly real the next level of pricing (349/month - OUCH).

Also - we are still not able to delete customers from the database that are no longer needed. Does that affect our count?
By Jim on October 12, 2010 at 10:13 AM
Hey,

Thanks Tauren for listing your alternative supplier. They seem great and are one that i had not heard of before.

Like most people here, i had started implementation of my new venture with the Chargify API. The new pricing structure is simply rediculous and does not make any sense for me to continue.

I've already signed up with the new supplier. It's a shame as i really thought Chargify were in touch with their users; it appears not.

Many thanks, and good luck to everyone who have invested so much and now need to start again.
By Gavin on October 12, 2010 at 12:52 PM
We were in the process of deciding between Chargify and Recurly. We were destined for Chargify but cannot justify the $99 a month for a boot strap startup. Its a long way between 0 and 500 paying clients so this is honestly, pretty poor. I am assuming you guys don't want to or can't afford to service startups any longer and thats fair enough. But this doesn't seem like smart marketing to me.

If ourselves as well as others (judging from the above) move to another solution to get better pricing as we get started, why would we move back as we grow? If it ain't broke, why fix it?

Huge disappointment on the lack of a freemium package anymore.
By Kate on October 12, 2010 at 03:15 PM
You guys have to make a profit. Totally understood.

But how sweet it would be if you could make the bootstrapper $39 plan available to NEW customers. Was just about to sign up!

(Kicking myself for not creating the account last week when I found you.)

Bootstrapper plan at $39 but without phone support - SOLD!
By markfig on October 13, 2010 at 03:29 PM
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