There was a great post last week which combined 2 of my favourite topics (community & product management) – The Power of Community Support: How Forums Helped Us Manage Customer Conversations on the Pricing Changes.
It’s a fantastic mini case study of a company screwing up in the eyes of their customers, working through the problem via their own forums and making adjustments (see Sorry. We Messed Up). The situation was picked up by TechCrunch (Zendesk Raises Prices, Pisses Off Customers), apparently it was a hot topic on Twitter & I’m sure anyone who decided to evaluate help desk software that day wasn’t putting Zendesk at the top of their list.
(btw, I don’t use the product or have any info on this situation except for reading the online news)
With my product management hat on, Zendesk obviously felt the time was right for a price increase. I hope their product managers talked with existing customers (newbies & old timers, light & heavy users, people paying the bills & the actual users, whatever personas they track) and potential customers (win/loss analysis anyone?) about the changes. And I hope mgmt listened to what their product folks told them.
Talking with your customers to help make your decisions is an essential part of product management (IMO). Questions could have been along the lines of:
- What made sense for the packages – not just the price, but what about invoicing/payment schedule?
- How did it fit the customer’s budget & workflow?
- What sort of reaction did they have to different price points?
- What functionality w/in the packages are they using?
- etc.
That sort of information could have shaped the packages & pricing plus shaped the communication of the changes. It could have prevented this customer revolt which caused them to move from ‘point A to point B’ (quote below from their posting).
But one thing we realized while reflecting on it this week was how integral the forums were in getting us from point A. (introducing the price increase) to point B. (grandfathering all existing customers).
It would be great to have a complete case study on this situation & know how they got to point A in the first place. Was point B was ever discussed? Why wasn’t it part of the new packages? If point B was decided against originally, how did they reconcile moving to it? How much has this customer revolt cost in cancelled contracts & losing new business?
I’m not going to get into the right/wrong of the way the packages changed because I don’t know the market. From a community perspective, the company seems to have been surprised by the reaction they got to the announcement. Or surprised by the passion of the reaction. Or surprised by the level of venom. Or all of the above.
To Zendesk’s credit, they let the venom flow. The (approx 400) comments aren’t nice – people felt betrayed, anger, fearful of telling their management about large $ increases. There’s a facebook group setup to vent, list of competitor products are there, competitor recommendations are made and so on. From the messages I’ve read, it looks like there was no editing, no trying to sweep the problem under the carpet & there was the occasional comment from the CEO to clarify & answer some questions. It looks like they handled this well & that could save some customer relationships.
This is one story I don’t think we’ve heard the end of.