- After operating Vero for a little over a year and getting a handle on our costs along with the value we should provide, we’re changing our pricing to a per user model versus a per email one. Yes – this means that, on average, our pricing will go up.
- All of our current customers will be indefinitely grandfathered and won’t pay anything more.
- We’ll be using every additional dollar to invest into scaling Vero and making sure there will be no downtime on the API, no lagging behind on email queues and no other nasty issues.
- We’d like your input on what we got wrong and where we’re headed via the short form at the end of this post. Your replies go directly to my inbox.
It’s time to plan a pricing change and we’d like your input
When you’re running a company customers depend on it’s NOT acceptable to make errors. Many errors that are small issues on a small scale quickly become big issues when you’re sending tens of millions of emails per month.
When we came up with our prices a year ago we made some very rough estimates around the key elements that drive our costs. Since then we have grown and our operating model has changed considerably. We now have a much better idea of where things stand.
First and foremost, we’ve learnt that customers are using the software in ways other than we’d anticipated. This is great and it’s time we took these learnings on board to build a better Vero.
Recent events that have shaped our thinking
We’ve spent the last 1-2 months dealing with some intense scaling challenges. It is frustrating for us and even more so for you, our customers, when our platform doesn’t operate as quickly or as smoothly as it should.
The general thought process from customers seems to be:
- Emails are super important in my business.
- You guys send my emails.
- Make sure Vero does whatever it needs to in order to send emails quickly.
- Make sure Vero does whatever is required so that I can see the results of my campaigns accurately and in detail.
- Keep things FAST so I can get in and out and make decisions quickly.
Part of the scaling challenge has been a realisation that many customers record a lot of user actions and attributes that help shape their campaigns and segments but don’t necessarily translate into ’emails sent per month’. As our pricing is currently based solely on emails sent this presents a challenge.
At a base level, the key ‘unit’ in our software is individual customer profiles. The focus should be sending the right communication to the right customer at the right time.
With this in mind we intend to adjust our pricing to reflect the per-customer nature of the product and our ultimate vision: capturing data about your users and using it to target your emails and other communications so that each recipient gets a personalised message each and every time.
We don’t want to limit the data you can capture or put restrictions in place to keep you within certain bounds just to reduce our own costs: we want you to be able to capture what you need to in order to send killer emails and we want to make Vero a pleasure to use whilst doing that.
Going into slightly more detail, you might be interested in the core things your hard-earned money gets spent on at Vero. This is the good stuff you pay for as a customer:
Server costs. Vero’s database grows at the rate of gigabytes per day. Storing all of the awesome data our customers track to make their emails personalised is a BIG challenge. Moreover we don’t want to just ‘store’ this data but, ultimately, work on it for you and ensure everything you need in the UI is up-to-date in realtime and fast.
Redundancy. Tracking thousands of events every minute for businesses around the globe makes for some interesting challenges when it comes to ensuring our API remains up as near as 100%.
Product development. Our primary focus is always making Vero a product that delights. The little things matter to us as much as they do to you. We can do a lot better when it comes to improving our UX flows. We want to make Vero work simply and intuitively. This takes time and man power.
Friendly and timely support. Nothing annoys us more than not hearing back from our own vendors. On top of our email help desk we spend a lot of time chatting with customers in our public chat room. We want to improve on both of these channels as much as possible.
Sending emails. Sending emails is trickier than it sounds. As your mail representatives we want to help you manage your deliverability and reputation so that you can get as many emails into inboxes as possible. Managing an email infrastructure, even with a great partner like Mailgun, requires us to ensure we monitor each customer individually and constantly.
A rough idea of how we intend to structure the changes
Our current thoughts are to alter our tires and to base our new pricing on a ‘per user’ model rather than a ‘per email’ one.
We’ve come up with some proposed new tiers by looking at the costs of sending emails, storing data, maintaining our API and, of course, better and better support.
Here’s what we currently have drawn up for the new pricing:
$99 for up to 5,000 contacts per month
$149 for up to 10,000 contacts per month
$199 for up to 25,000 contacts per month
$299 for up to 50,000 contacts per month
$499 for up to 100,000 contacts per month
High volume plans will start at 250,000 users and go up from $799/month.
All plans will include the same features they do now along with some new features the help you store named segments, send newsletters and, on higher tiers, manage multiple users and projects.
The second aspect of our pricing is to consider the value our customers receive. This is where we are pleased to hear customers saying they are being undercharged. A customer sending emails to 5,000 end users should be making significantly more than $99/month from the emails they send.
If they’re not, we see it as our job to help them get there. Our blog, support and other resources are designed to help you tackle the tricky aspects of improving your campaigns.
Another realistic aspect of pricing is to be aware of what our competitors are charging. Reviewing the pricing of incumbents such as SailThru, ExactTarget, Campaign Monitor and Mailchimp makes it clear that, for a fully mature email marketing product, prices are certainly higher than our proposed rates. Although not as mature as these companies we are now much more than an MVP and we know we need to start charging in a way that is commensurate with this.
After all, we can’t build a product that competes and improves on these incumbents without valuing Vero for what it truly is.
To grandfather or not?
A final point we’d love feedback is grandfathering: an important aspect of any price increase.
From our side there is the inevitable debate between “don’t piss anyone off with a price increase ultimatum” and “many customers have already acknowledge we undercharge them so we should embrace this”.
Our thought is that grandfathering all current users indefinitely is the way to go. At the same time we intend to introduce some new, key features that will only be available on the new plans. Of course, all new customers will be offered the new pricing from the date it goes live.
We don’t want to put pressure on current customers to upgrade. We think this is only fair as you have supported us early in our existence and put up with many issues along the way. For this we are super appreciative and eternally grateful. Without you we wouldn’t be where we are right now so it feels right to acknowledge this in kind! This is particularly true when we have come to know so many of you personally and respect your businesses and your investment in ours.
Comments and feedback
The whole point of this post is to get your thoughts! If you’ve read this far you hopefully have a few ideas of your own. I want to hear what you have to say: it’ll have a genuine impact on whatever path we decide to take. Nothing is set in stone and there is a lot we can learn from all of you.
Our goal is to be the most effective, easy-to-use application for sending one-to-one targeted emails that convert. Tuning our pricing is an important part of achieving this goal.
Here’s a link to a quick, four-question, feedback form that fires the responses straight to me:
Alternately, if you want more space ,you can send me an email via firstname.lastname@example.org or call me personally on +1 (650) 843 9866. If I’m not around leave a message and I will call you back.