On WooThemes Pricing Changes

On WooThemes Pricing Changes
On WooThemes Pricing Changes

Update to this post is here.

The WordPress community has lost a lot of my respect in a very short period of time, all centered around WooThemes’ changes in pricing and the response garnered by those changes. This post comes after reading all 490 comments on Woo’s official post on the matter, the post on WP Tavern, and the post on DevPress (which is my favorite take on the situation).

The situation:

  1. Woo changed their pricing model for existing customers and new customers
  2. Existing customers who purchased unlimited licenses did so under the (marketed) statement that their license (read – updates and support) was unlimited.
  3. Woo ran a sale in July with no mention of these changes; many customers invested in multiple plugins (some by purchasing thousands of $ worth) with the understanding that they were investing in a continually updated product for a one-time fee.

It is my belief, in accordance with many others’, that Woo:

  1. Badly mistreated existing customers
  2. Arrogantly and incorrectly responded to the outcry that followed (read Adii’s comments)
  3. Did not mistreat new customers – these customers have the power to choose whether or not to initially purchase products under these new terms.

The talk regarding this topic I most agree with:

Sadly, I am not at all surprised that someone from Templatic would think that it is “a good move” to sell people unlimited lifetime licenses and then quietly change them to 2 year licenses. Yes, indeed, “you can’t really be surprised old customers aren’t all that thrilled about it“, and that is probably why, instead of notifying them of this change by email, Woo slipped it into a blog post so vague and deceptively worded that, even after the 492 comments that managed to get posted before they slammed that door shut, most people are still confused about what is actually happening.

Sure, Chris Lema writes that plugin authors should charge more … in a blog post packed with affiliate links to those plugins. I don’t doubt that getting a 20% commission on a $500 purchase is better than 20% on a $100 purchase, but even Lema isn’t suggesting that that it is acceptable to change the terms of a sale AFTER the sale has been made.

It is also worth noting that the $2000 which Lema grandly states he sets aside each year for plugins, would not get him very far under Woo’s new pricing – the figures being mentioned in the Woo thread seem to suggest that the licenses for the average Woo Commerce site will now cost around $1000 per year.

Nobody should forget that the availability of those unlimited, lifetime licenses – which cost considerably more that the normal licenses – were a vital tool in persuading Web designers to build their businesses around Woo Commerce rather than existing, more experienced competitors such as JigoShop, whose code they forked to create Woo Commerce.

Think about it this way: if I sell houses at lower prices than anyone else, I will probably become the leading house seller. Having achieved that position, and having sucked business away from all my competitors, would it be acceptable for me to then announce that, in order to ensure the financial future of my company, I must now not only charge more for houses but, also, all you folks who thought you bought a home, sorry, that was actually a two-year rental … and anyone who whines about that is not a “loyal customer”, if you can’t afford the new prices that is your fault for not charging your clients enough!

As I’ve already said, other commercial plugin and theme sellers will now undoubtedly decide that retroactive price changes are “a good move”, so, when will Templatic be breaking the bad news to all of your lifetime license holders? – donnacha of WordSkill source

 

Reading their comments to their customers makes me think they must be the most arrogant individuals around. Adii thinks a “loyal customer” is one who is willing to accept their fraudulent practices and breach of contract.

Mark Forrester on the other hand says they are being transparent. Where was this transparency on display when they did their July sale and only told their users that the prices would increase, but then withheld the fact that the licenses are changing and it’s now going to be an annual fee?

Is this your idea of loyalty Adii? Your customer who bought your plugins in the past and helped build your company now has to pay you a second time for the same plugin if they don’t renew fast enough for you. Even if they are not using your plugin and support they still have to keep renewing or else pay you full-price a second time because they let their license lapse. That puts them on the same level as a brand new customer of yours who never supported you in the past. You reward them for their past loyalty by making them pay full price again, not an upgrade fee. There is no justifying that from the perspective of your tech support costs increasing because the person in that scenario wasn’t even using any tech support or even making money with your plugin. That’s just a money-grabbing decision, not something you need to do to cover their support costs.

This is the “loyalty” that Adii believes he owes to his customers, but you should just accept whatever Woo throws at you or else you are disloyal to the “Woo clan”.

If Woo doesn’t give their customers what they paid for they don’t just risk civil lawsuits but criminal charges too for fraud. You can’t sell someone a lifetime license that you have no intention of ever providing. It doesn’t matter what your T@C say, misleading people for financial gain is a criminal offense. Your T@C will never trump the legal system.

It’s obvious their July sale was based on fraud because they sold people things they had no intention of providing. A one-time fee lifetime license does not become a 2-year renewable license just a few weeks later. That has nothing to do with needing to increase prices to keep yourself in business. That was a deliberate effort to deceive in order to get as many people to buy plugins as possible knowing very well that they were not going to be providing them with what they had just purchased. That act of theirs shows their true colors IMO, you can’t pin that one on a lack of experience from someone who has just started a business.

If Woo Customers don’t stand up and fight against these unethical and shady business practices you can be assured that this will be the norm. Other companies will follow suit and their cheerleader bloggers will just rush to their defense trying to convince you that it’s just how things are done in the “real world”. – Bill Source

Having now read a lot more about what was sold and what they changed, it is pretty shocking. All the folks, particularly on the selling side of the WordPress community, who took Woo’s reasonable explanation at face value, well, they should take the time to find out what actually happened. I didn’t even realize the amounts of money involved.

Under any understanding of representation and sales law, what Woo did was blatantly illegal and this will cause a ripple effect which damages EVERYONE attempting to make a living by selling commercial WordPress products.

Adii defended this by saying that there was a clause buried in their T&Cs, stating that they could change the terms at will … doesn’t matter. Legally, small print cannot override the promises contained in marketing – just having a get-out clause does not magically allow you misrepresent what you are selling.

Neither Amber nor any consumer is obliged to comb through the small print, there is a reasonable expectation that terms which fundamentally alter the product being sold will be explicitly cited in all marketing materials, otherwise it is misrepresentation, plain and simple.

It doesn’t matter if you belatedly discover a structural flaw in your business, you simply cannot turn around to struggling Web designers, who have made the huge step of investing thousands of dollars into what you told them were lifetime licenses, and say “lifetime now means two years”.

It is also blatantly insincere to say “Well, we’re not taking the plugins away after two years, you just won’t have updates” when everyone knows that, as WordPress itself changes, plugins have to be updated.

Woo were free to sell their licenses at whatever price they chose, that was their business decision, and their customers bought those specific licenses at those specific prices. Now Woo suddenly claim that each customer is sucking up more support, at $5 a pop, than the cost of their licenses – I call bullshit. This is not about “making sure the company is still here in two years”, it is a simple bait and switch, designed to claw back a bigger slice of the perceived pie and completely undervalue the skill, hard work and entrepreneurial effort of Woo Commerce integrators.

Those individuals and small companies who invested money upfront in order to save in the longterm, many are now apparently looking at ongoing costs of around a grand per year per website. They acted in good faith but now they are the ones which will struggle to be here in two years.

Of course, what Adii is counting on is the fact that his buyers are insufficiently organized and insufficiently resourced to take this to court – just because something is illegal doesn’t mean you can’t get away with it.

Good for him, what a hero, and no doubt this retroactive strategy will now be copied by many other WordPress sellers, but let’s not kid ourselves that there is any sort of justification for screwing over the customers who invested most heavily in you. In the WordPress world, we often comment on how commercial the Joomla world is but I cannot think of a single example, there, of behavior as short-sighted, brazen and ultimately self-destructive as this. – donnacha of WordSkilL Source

It also grinds my gears to no extent to see articles praising this change from the “gurus” who many of us respect popping up all over the internet. Or comments saying we don’t want to invest in our businesses or care about developers etc. – AmbeR Source

Many are applauding their “bold” move, I hope it is on the point that they are moving to a more sustainable support model, which I support. If you are also encouraging them on their “bad” business practice of changing the key terms of their past agreements, even if it is legal (which I doubt so), this will be a sad day (in my opinion) for the premium plugin ecosystem. – smeherO Source

I DO mind that after investing $8k ish in my start-up business for those unlimited licenses that I’m now being told my renewal fees could set me back anywhere from $5k to $14k per year; I have over 75 extensions all purchased as unlimited. – AmbeR Source

“Although some think WooThemes are legally ‘covered’, in what they’ve chosen to do, and that it even shows good business acumen on their part, this episode does come across as shabby, at best.”

The biggest problem in the WP community today is that there is now an inner circle of high profile players who are all friends with each other. They agree with each other, support each other, and publicly slap each other on the back.

That leads to the false belief amongst some that they have been greenlighted to do things this and that it’s legal because people like Chris Lema said so and because he thinks it’s a good idea.

There will be a wake-up call coming for developers who think that this is how things are done, that if your buddies support you then it’s all OK, you can do whatever you like.

If these contracts are not honored this will be a defining moment in the WP commercial space. A line has been drawn in the sand. – BilL Source

Jane, you perhaps only own a handful. I have nearly 50 all of which I purchased Unlimited Lifetime updates and support.

Multiple that by $300 and you will get why I am so peeved about this. Most of my clients (the vast majority are very small businesses selling one or two products per month and they pay me around $480 a year for support, updates and hosting.

Now I am asked on average to charge them $1000 per annum for the same thing they signed up for, most of which goes to woo. This is a $14k increase in fees I am being slugged for.

I remind you, I purchased Unlimited Lifetime updates and support for all of these. Now does that make it clearer? – lucifer666 SOURCE

@Warren, agreed that the products need maintenance and are in a ever-changing environment.

However you cannot let someone purchase a lifetime subscription to something and then, because you practiced a non-sustainable business philosophy, start charging that custom extra out of nowhere. – Mark SOURCE

 

You guys have thought so much about Woo’s sustainability. Did the sustainability of small developers with individuals as clients not cross your mind? That is a huge percentage of who you service. A lot of websites I do for people cost $1,000 or less to develop. Now I’m supposed to expect those individuals to pay that much in just software maintenance? They won’t be able to afford it. I won’t be able to afford you. Not the definition of sustainability. – hoodoofactory SOURCE

“The former group of customers are what I call loyal customers, because they are the one’s that are helping us correct our wrongs from the past.”

Adii, your entire response above and this line in particular makes me hope I never have to pay another penny to WooThemes. I am shocked and disappointed by the lack of respect that you and the WooThemes team have shown towards your customers in your arrogant and dismissive responses to genuine customer concerns. Most of your customers are not complaining about an increase in price, but are rather confused and upset by drastic changes to licensing. They purchased “unlimited” WooThemes products specifically because of the promises that came with those products, and to have all of those promises suddenly taken away feels like betrayal (particularly after the recent “sale” that encouraged many to proactively buy more WooThemes products). To then imply that customers who are questioning this change are somehow disloyal, even after some have paid you tens of thousands of dollars already, is a kick in the teeth. If you are unable to respond to customers in a courteous manner during this stressful time, perhaps you should hire someone to handle your PR and social media. – SoDisappointed SOURCE

It’s not about us not wanting Woo to be around in the future, or being unwilling to support your new pricing and structure.

The majority understand and agree with the reason behind the new changes for purchases on products going forward. We accept that.

We don’t agree with the stance that you (Woo) told us one thing, encouraged our purchases under that pretence and are now going back on your word. We don’t agree with being sold unlimited licenses/updates then being told “oh btw, we’re changing what you bought”. You essentially mislead your users and have caused distrust. If you do that once you can do it again.

Additionally many of us invested thousands of dollars in Woo, under the assumption that those pretences would be honoured. Not only is that false but you’re telling us that we have to shell out those same types of fees yearly and our license are going to be reduced; again not what we bought.

For the individuals that will end up with $5k – $14k renewal fees (and I mean let’s face it no one will want outdated plugins), that’s a huge hit to the pocket each year. Top that off with the “if the grace period lapses you have to pay full price” is just a swift kick while we’re already down.

Adding to the pot, what about the users who bought all those plugins at unlimited that you want all these yearly fees from for support that don’t actually use the support. Again, we get punished.

It seems much more viable than instead of angering the majority of the community with this type of change for established purchases to instead implement some sort of “support tier” since that seems to be what’s causing the most issues. – Syrehn (Amber) SOURCE

I have approx. 75 plugins/extensions that purchased from Woo, ALL at UNLIMITED pricing over the years. Seriously, do the math, it’s not cheap. This was me, trusting Woo and investing in both them and my own business. Hell I also have a theme subscription but I barely use it.

I also rarely use support and when I do it’s for things that are usually determined as actual bugs that get passed on to developers and get fixed. I always try to research the KB articles etc. before I even touch a ticket

The first time prices were going to be increased we were told “hurry and get your licenses while you can” and “anyone who buys before the increase is grandfathered in” so many of us shelled out hundreds and thousands of dollars to invest in those unlimited site licenses… why… because Woo TOLD us we would be grandfathered in!

So now let me get this straight… after investing in my own company, and Woo, and purchasing products prior to increases, and after being told repeatedly I would be grandfathered in at unlimited sites/updates… that’s all just out the window? You’re telling me that now I have to pay each year for those 75 plugins if I want updates.

For god’s sake why can’t you just offer a “Support Structure” for clients with existing licenses. If we have unlimited we should still be able to use on unlimited sites/with updates but implement Support only tier of some kind. Slapping your loyal customers who’ve invested so much with a big F.U sign doesn’t make for a happy community. It doesn’t make us want to sing your praises or recommend your services going forward.

Essentially if I understand this right, you’re telling me, the thousands of dollars I have spent on “unlimited” sites/updates isn’t going to be available and I basically through my money out the window since you won’t honour the fact that you already told clients prior that they would be grandfathered into unlimited licenses.

I have 0 problems with a structure change going forward. I have 0 problems with paying for future products with that structure as needed.

I have a thousand ton elephant size problem with being told that a product I purchased as unlimited and was repeatedly told would always be unlimited (sites and updates) will now not be. – Amber SOURCE

For me it was something like $8000ish give or take. Additionally many of my purchases were done in mass quantities on when Woo was pushing “buy your unlimited quick and get grandfathered in”.

So… that’s what I did; because Woo guaranteed me something and I trusted them. Clearly that was a mistake.

Now I”ll have to pay what… %50 of the new fee each year on renewal for limited licenses. What about if the extensions that I bought as an investment (again you urged us to with the promise of being grandfathered in) aren’t being utilized yet?

If the users who were investing in the unlimited were startups it’s not necessarily feasible to be able to pay $8000+ each year in a lump sum for products purchased as unlimited.

If the renewal comes up and we don’t pay the $8000+ per year (say we can’t afford at the time to drop that down again) when we do want to renew them you want us to pay full price again. Are you freaking kidding me?

This was a HUGE slap in the face to loyal developers who purchased the unlimited licenses and who rarely use support; bug reports for the most part.

Like I said. The pricing structure seems sound going forward but to penalize the unlimited license buyers is not acceptable after your promoted over and over for us to pay for those license; I was shocked to read this article.

Add to that the arrogance of “it makes sense for us to earn a chunk of that, because Canvas has saved you a bucketload of time and effort” when you don’t know if you’re actually saving us a “bucketload of time and effort”.

They keep saying Woo is increasing in revenue and is thriving. If that were the case then they would trust in this new model going forward, honour their loyal unlimited user licenses (maybe add a support only fee), and wouldn’t make comments like “we’re simply not in a position to grandfather past mistakes; it will literally take us down”.

Their has to be a better way than this. I don’t like this Woo Scroo. – Amber SOURCE

http://www.farces.com/woothemes-succumbs-to-business-model-du-jour-subscription-pricing/

If you’re going to do this, you should work out a way to bundle things together, reward people who have lots of plugins, make the cost so low that it doesnt hurt, etc. – Maire SOURCE

 The talk I most disagree with:

Our Terms & Conditions have always included a clause that allows us to do this. – Adii Pienaar SOURCE

Perhaps you should explain to them that $500 – $1500 for a website a year is cheap and that they’ve been using fantastic software (WordPress + WooCommerce) completely for free. So paying even $1500 annually (for something that should generate them more money than that) is fine. Not? – Adii Pienarr SOURCE

If you’ve gotten this far; I’m out for the night. I’ll update this in the AM, especially if Woo makes their expected PR tomorrow.

3 thoughts on “On WooThemes Pricing Changes

  1. I think this will open up a third-party marketplace for Woo extensions. Woo may have shot themselves in the foot by making their own extensions so expensive with the new terms and conditions. The near-doubling of initial prices is bad enough, but charging one-half of the original price every single year for continued support is a killer. Ten or twenty percent would have been more reasonable, more acceptable to their customers, and still provided a nice income stream to keep things moving along internally. The don’t seem to have any understanding of the concept of “price elasticity”.

  2. I did some maths to prove how shallow WooTheme’s “support costs” illustrations are. Plus their history of changing terms and policies over last two years.

    I referred your post, and focussed on stuff that wasn’t covered anywhere else so far.

    Read here: http://wpavengers.com/

    More importantly, I’ve outlined a solution for WooCommerce extensions – a club membership.

    Love to have your feedback!

  3. My purchase is small by comparison but the promise was broken to me as well. I am in no position to go this fight alone but would gladly join the cause to right in injustice. Is there any growing movement to fight this? And where can I sign up?

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