There’s a debate going on about 37Signal’s “hidden” “unannounced” price increase of their popular Basecamp service.
Apparently most of the uproar wasn’t so much due to the price hike itself, but the fact that it happened without any announcement.
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Not everyone agrees:
@benkepes Ben Kepes
If people have a problem with #BaseCamp #37Signals pricing they have two options, shut up or move on. No big deal cc/ @jasonfried
Hm. I guess STFU is an answer, too. On the other hand, competitors are ready to take advantage of the situation:
mikeerickson Mike Erickson
If you dont like the #basecamp price hike, check out #teambox!
bluecamroo BlueCamroo
Don’t like #basecamp price rise? Try #BlueCamroo. Project Management and Social CRM with Twitter from $24.99 p.m. http://bit.ly/c68rkR
Zoho (longtime CloudAve sponsor) even offered a conversion tool: BUMP. (not to be mixed up with the iPhone / Android BUMP)
But 37Signals Founder Jason Fried came back with a surprising statement:
This isn’t accurate. We have not raised prices. Our prices have been steady for years. Max is still $149. Premium is still $99. Plus is still $49. Basic is still $24. Free is still free. Same prices as last week, last month, last quarter, last year, two years before that, etc. Each plan has the exact same levels and features and projects and disk space as before.
So who is right? And more importantly, where is the $24 Basic Plan? Certainly not on the signup page:
Here’s the previous version – draw your own conclusion.
The Basic Plan disappeared – at least I can’t find it. Can you? But being invisible does not mean it does not exist. It’s out somewhere… you just have to find the back door. Hey, it’s Halloween, perhaps time for a game of hide-and-seek?
Here’s the trick: if you click on any of the signup button, you find yourself on the relevant signup page – no surprise there
. But pay attention to the URL, which will be something like this: https://signup.37signals.com/basecamp/Premium/signup/new?source=37signals%20home&__utma=1.673282167.1288387379.1288387379.1288387696.2&__utmb=1.2.10.1288387696&__utmc=1&__utmx=-&__utmz=1.1288387508.1.2.utmcsr=google|utmccn=%28organic%29|utmcmd=organic|utmctr=basecamp%20basic%20plan&__utmv=-&__utmk=10596276
Leaving off the tracking crap and with a little experimentation it’s not that difficult to come up with the URL: https://signup.37signals.com/basecamp/basic/signup/ – and voila! that takes us to the signup for the Basic Plan at $24.
So Jason is technically right: the individual Plans’ prices have not increased. The Basic one is simply hidden.. and of course the question is, how many prospects will interpret the above signup page as the entry level being $49. Even if it’s called Plus. Hey, as Isaac remarked today:
Even after all of these years – I still don’t understand why a Starbucks “Tall” is a small serving.
What 37Signals is doing is not exactly unprecedented. Recently I signed up for Sprint’s cellular service at a significant discount to any of their published prices. How? Somebody pointed me to this. An example closer to our SaaS-y world: when GAFYD took off and became Google Apps (more on it soon), for a long while the signup link to the free personal version simply disappeared. Of course being Google a lot of people noticed, and eventually they brought it back.
So perhaps 37Signals is just playing Google . The real question is, do they need this? Here’s where it gets complicated: 37Signals is not simply a software company. They’ve become thought leaders, Web 2.0 industry icons. Web 2.0 is not the real thing without transparency. Transparency about your features, usability, bugs and prices. No tricks.
Even if it’s (almost) Trick-or-Treat day.
I wonder which vendor will want to use STFU in a free market, especially when the cost of moving to a new SaaS app is negligible. Bad business practice IMHO.
What we’re doing is simple: We’re experimenting with the presentation and mix of plans we’re offering at signup. That is all. No price changes, no spec changes.
Our prices today are the same as they were last week, last month, and last year. What you’d pay $49/month for last week is identical to this week. This is true for all the plans we have on the account chart today.
Yesterday we didn’t have the free plan on the chart. Today we do. Right now Basic is left off. It’s possible that Max will be left off another time. If we removed the Max plan, would people be saying we dropped our prices 50%? That would be equally silly.
We’re experimenting with different combinations and words and layouts to see what we can learn. It’s basic business stuff.
One thing we’ve learned: Too many plans confuses people, and suggestion is powerful. We will continue to learn, as we’ve always continued to learn, by experimenting and trying new things.
One fact is clear: No one – not a single customer – is being asked to pay more for the same thing they had before. Our prices and specs are the same as they were before for each plan we’re exposing on sign up.
I feel it is a free market issue. they can charge the price as they see fit. I just wish they offer a free edition so that it is easier to test out more extensively
It is worth getting out http://www.thinkj.com , it is real time collaboration tool, it offers a free basic edition and focus on real time chatting and project management. it is also super lightweight.
I agree and have no issue with price changes at all. That’s not my point – pls. see comment response to Jason Lemkin below.
Zoli I think the more interesting part of this is that 37 Signals has obviously determined that it may not be profitable, or worth the effort, to support a $24/month plan. We struggle with this a bit at the “low-end” too. First, they deemphasize Freemium. Now, they deemphasize or perhaps eliminate the smallest plans. Given their success, this doesn’t speak volumes to the sustainability of larger-scale similar businesses focused on the very smallest of user and customers …
Jason,
Interesting point, and you may very well be right. And yes, it is a free market and they very well have the right to experiment with pricing. There’s no commitment whatsoever to always offer a low-cost plan. Hey, just try to buy any item @ Amazon over a period of a few weeks, you’ll see major price swings up and down.
What I don’t get is this mystification of “no price changes”. Let’s call a spade a spade, it’s that simple.
I’m on a trial with Basecamp and the plan is $49 a month. I found that you can downgrade to the basic $24 account by doing the following.
On your account page you’ll see buttons to upgrade to higher price plans.
Right click over the button and grab the url. For example,
https://fannedout.basecamphq.com/account/subscription/edit?plan=plus
Change the plus to basic and enter that url.
You’ll be prompted to downgrade to the Basic plan
Any more details on that cheap Sprint plan?
The link you provided no longer works sadly.
Forcing customers into an upsell structure is clearly a move to cut off support requests and resource allocation for SBM users. So even though the prices haven’t changed, the focus of service has. It’s a shame too, becasue I used to use the accounts they eliminated that was somewhere in the 5-10 project range (I forget which but I think it was $19/mo). Offering an entry level basic plan of 15 porjects is imply overkill for a number of small business’ and I think 37signals i simply happy with leaving them in the cold, their profit margins are clearly keeping them warm.