WooCommerce.com is dropping its 50% extension renewals, and moving to a 100% renewal business model.
I found this out at WCEU 2017 and then via WP Tavern. Unfortunately, this announcement is not on WooCommerce blog, on its social media channels or even Automattic.
And yes, this is retroactive – we are now all paying 100% renewals. So, let’s see what I think about this “still not official” news.
The news
WooCommerce.com has already dropped its 50% off renewal subscription pricing policy for extensions and plugins since a few weeks ago. It’s now 100%.
This has been announced indirectly at WCEU Paris 2017, at minute 32:20 of Marina Pape’s wonderful presentation. Marina said “in my honest opinion, I think it’s healthy to renew products at 100%“.
WP Tavern published a short blog on the topic a few days later and the news spread out on social media pretty fast.
This is all we know so far – no announcement has been featured on WooCommerce blog or their social media accounts.
On changing pricing strategy
WooCommerce/Automattic run a business like we do. We’ve increased our rates, doubled them, tripled them without ever communicating this to the world. Changing business model and pricing strategy are, in fact, totally normal.
It would have been great to hear this from WooCommerce/Automattic first and not via a Q&A session at WCEU. Surely this will be announced in the next few days, and will finally clarify all the details 🙂
On changing pricing strategy for existing customers
The real problem here is retroactivity.
Existing WooCommerce.com customers purchased a product knowing it renews at 50% as long as you don’t let the subscription expire. Now, their automatic subscriptions renew at 100%. For millions of customers, this is a substantial change.
While it’s ok to change pricing strategy, existing customers should not be affected – or you risk to dramatically increase your churn rate.
On WooCommerce.com FAQ, Support Policy, Cart & Checkout Pages
As an announcement has not yet been done, I spent some time looking at the FAQ and policies on WooCommerce.com. Needless to say (and I’m not sure if these have been updated since the pricing strategy decision), there are a lot of grey areas.
But let’s start with the “single product page”. In here I’m willing to purchase the Product Add-Ons Plugin, a very useful piece of software that almost any WooCommerce site will need at some stage.
It clearly states “A subscription entitles you to 1 year of updates and support from the date of purchase“, which is pretty standard for premium WordPress plugins. No mention is given in regard to year 2 renewal.
If I click on the “Support Policy” link, I find this 2 paragraphs within the document:
——
How Do I Renew My Subscription?
If auto-renew is enabled, your subscription renews on the due date and your card is charged. An email notification and receipt are sent to confirm you paid for another year.
You are sent a renewal reminder email 60, 7 and 2 days prior to the subscription renewal date. You can also find a renewal information at My Subscriptions. These emails are also sent if auto-renew is disabled.
How Much Does It Cost To Renew My Subscription?
Subscriptions are billed annually. Coupon codes or other promotional discounts do not apply to renewals.
——
No mention of the renewal amount there. However, the renewal reminder email 60, 7 and 2 days is a great feature, and I wonder if any of you got already one of these with the 100% renewal notice.
Anyway, let’s proceed to Cart:
No mention of yearly subscription here. So, let’s proceed to checkout:
No mention of yearly subscription here either. If you purchased “WooCommerce Subscriptions” plugin in the past, you know it adds very nice order table rows that say something along the line “Pay $___ Now” and “Renews at $___ Every Year“. I wonder why this does not show on WooCommerce.com checkout page?
Conclusion: a lot of work is needed to make the add to cart / view cart / view checkout / view policy process more transparent, no matter if the renewal is at 50% or 100%.
On WooCommerce support efforts
I can see the support team has dramatically grown in the last years. WooCommerce has actively sponsored and attended WordCamps, has put its face in front of their existing and potential users.
The support ticketing response time has gone down and day after day I feel much happier with the level of support received for a premium extension.
Maybe you disagree, but I’ve seen an incredible step forward here. And for sure the new pricing strategy is to consolidate this – when you purchase a premium plugin, how much do you value support?
On WooCommerce.com future
More transparency is needed. We users and resellers (we indirectly sell WooCommerce.com plugins to our clients, don’t we?) need to be aware of the roadmap. We need to know when anything small changes, go figure why we still don’t know about this pricing strategy revolution.
Inevitably, this business plan change will affect many existing customers (and will upset many). A big churn is expected. Of course, brand new customers won’t be affected and will purchase extensions at 100% renewal as long as the Cart/Checkout process is transparent.
If I were WooCommerce.com…
I believe feedback should come with a list of suggestions. I don’t like to say “I don’t like this“. I prefer to say “I don’t like this. And this is what I would do if I were you: ___”
If I were WooCommerce.com, this is what I would do today:
- announce the pricing strategy ASAP
- existing customers – let them renew at 50% lifetime to avoid churn. This is vital
- new customers – get the Cart/Checkout/Policy process right and transparent to avoid upset
- make sure news like this don’t leak in the future, or at least be quick with an official statement
- never launch a new feature on WooCommerce.com unless it’s been announced and feedback has been gathered
- keep working as you’ve been doing recently. Support quality matters, response time is vital, plugin reliability needs to justify the product price
Now it’s your turn.
What do you think about this, based on whether you’re an existing customer or not?
Unfortunately, I have to disagree. We purchase a lot of WooComerce plugins, both for our clients and for our own projects. In practice, most times we raise *zero* support requests related to a plugin purchase, and on the occasions that we have raised support requests, one of two things has typically happened:
1. We’ve raised minor queries soon after purchase, then never raised another query for that plugin again
2. We’ve identified bugs within their code, effectively paying for the privilege of bug testing premium plugins (including offering some fixes – this is fine in open source, but grates when it’s a premium plugin)
So, from my perspective, the 50% renewal model seems fair. The support time that we require from WooCommerce is occasional, and usually stacked at the time period after purchase. If WooCommerce prefer a 100% renewal rate (of course they do), then I would expect the price of their plugins to be reduced.
I assume that the major expenditure for WooCommerce is support time, and they have indicated this as a reason for previous price hikes. WooCommerce’s documentation is pretty good (compared to many other plugin providers), but still it could be better. For instance I expect that video walkthroughs could reduce their customer support time. Better documentation should result in fewer support requests, leading in turn to reduced operating costs.
Excellent take Dan. We will definitely need to see what’s in their new business plan, so that we can understand better. Thank you for your feedback!
Been meaning to comment on other posts, but lost my way. So first time commenting.
Very interesting, thank for getting the word out Rodolfo.
I think the 100% renewals are a very bad idea. First it’s a HUGE slap in the face to current customers. “We had a deal with you, but now we are not going to honor it. Thanks for your money, but now we are going to stick it to you.”
Plus, a good model has always been, you get a discount on renewals as a loyalty reward. “Thank you for taking a chance on us, and staying with us, we are going to show our appreciation and show that we value your business with discount on future renewals/updates”. It’s an incentive to stay with the product/service.
I can see more people moving to other vendors like those on codecanyon. Lower price and you only have to pay for extended support in the future. Though quality can be risky there. I have always thought Woo brand plugins to be pricey. And I have to agree with Dave, many of the official woocommerce plugins do NOT get updated often or at all, but yet you still have to pay renewal? and now at 100%? Argh.
And how many even need to be updated much? You pay each year for nothing in many cases.
I switched from OScommerce (long dead) to WP/Woocommerce a couple years ago and have really like it. Much better. And I’ve been a strong supporter of WC, but honestly, more and more it’s like you are getting nickle and dimed at every turn. Like Natascha said, many are one man shows, small businesses and they end up paying and paying and paying. and oh YES, it’s pretty sad to take advantage of those dependent on the service/product.
At the very least they should HONOR 50% renewals for current customers. Gonna create alot of bad blood if they don’t.
100% agree Ron, thanks for posting your comment this time 🙂
Hi Rodolfo
I’m new to all this (WordPress and Woo), and my site is still in development. I started with Joomla and came to WordPress largely because of WooCommerce. I like their approach, their architecture and plugins a great deal, even though they are priced aggressively (sometimes absurdly so). They are much more stable and dependable than the alternatives (including YITH), and that’s always been the most important thing to me.
However, a big factor in choosing plugins is trust in the developer – I need to know that they will be there long-term, their work will be smartly done, and the plugin will be updated promptly when needed. I also need to trust that I will be fairly and professionally treated if I am dependent on a plugin – I spend countless hours researching, reading reviews as well as support forums to get a good idea of how a developer treats their customers. If a developer seems unpredictable or at odds with their customers, I will choose another plugin.
This decision on the part of WooCommerce.com rattles my trust in them. It underscores the fact that I am dependent on them, and brings on an uneasy feeling of being taken advantage of as a customer. I can’t help but think it’s a sign that they value profits more than customers, and I’ve got to think their profits are pretty healthy already given their aggressive pricing.
My money will always go to developers I can trust the most. Going forward, I’ll be looking more closely at alternatives to official Woo plugins.
Trust – that’s what WooCommerce.com will need to work on to avoid a disaster after this retroactive change of pricing. Totally agree John!
No one talks about the changelog of those premium plugins.
Everybody is willing to pay if a product get -from time to time- new (and cool) features.
But for some of my bought Woo extensions i’m dissapointed; hardly any new features, mostly very small tiny tweaks and fixed (the very minimum was done, you can say).
When you ask more, you gotta deliver more.
WooCommerce still be a bargain? Well, could be? But compared to what?
For a lot of shop-starters in need for just a standard online shop, they’re better of with Shopify. No hustle with hosting and updates, and most importantly “transparant pricing”.
Thanks so much for your feedback Dave, good stuff there 🙂
I see a more ‘enthusiastic’ push towards paid products across the board with WordPress. If you have a WordPress.com site then you will see the paid options featuring more prominently when you sign up or start a new blog. And Jetpack pushes the paid backup option more than it used to do.
It didn’t surprise me when I heard about the change of policy from Woo.
Personally, I think WooCommerce is a bargain.
David, thanks for your comment! I totally agree, Woo is a bargain and still will be a bargain after the 100% renewals. All I’m asking here is transparency and avoiding retroactivity 🙂
Rodolfo, I totally agree on making the notifications much more transparent. I also agree the Woo should have definitely made some type of announcement (especially after the leak). We don’t want to create any sense of distrust with our customers now do we, even though it’s not intentional. I have my default go-to premium plugins I utilize for client installs and development. Recently I was given the option by one of my favorite plugin developers, to renew subscription now at the current price, before they deploy their pricing increase. They actually sent a few email notices and give me plenty of time. I will hope that Woo will do the same.
Jayson, yes, that subscription price increase alert is so much more transparent, isn’t it? Thanks for your feedback 🙂
Hi Rodolfo,
Thank you for putting this out there. I have to agree with you 100%. The retroactive renewal issue is the biggest part for me. I sold my customers on Woo premium extensions with full disclosure of the annual renewal costs (at 50%). Now to go back and explain to them that, oops, stuff happens, pricing changes, double your expected expenses for next year.
It’s been a very disconcerting disclosure of the new policy. I, too, would really like to hear some official word from Automattic on this. I need something concrete to tell my web clients.
We shall see.
All the best,
Matt
Thank you Matt, good point I didn’t think of – from a reseller disclosure point of view. Thank you for your feedback!
Thanks for sharing Rodolfo! We have a couple of new ecommerce sites in the works and it’s nice to have a heads up on this sot he client is aware when that renewal comes around and we aren’t eating the new cost. I know SkyVerge is the developer for many of the payment gateway plugins we use and are sold on Woocommerce.com too. They used to sell on their site but it looks like they just send you to Woocommerce.com now. We also use YITH plugins and have been really happy with their support as well. It’s my bank’s credit card that adds the International Transaction Fee when I buy from YITH which is a small add-on to their price.
Anyway… if their platform keeps growing the way it has, they do need more support staff and that comes at a cost. So I understand if their renewals are going to be 100%. I’m on the fence in regard to the existing customers also being charged. In my opionion most extensions are not that expensive as the platform itself is free to use and install. Just my 2 cents here.
Cheers!
Excellent, thank you so much for this detailed feedback John. I think we all agree that the 100% renewals are for a healthier business – and also we all agree that existing customers should not be affected 🙂 Thank you!
Hi Rodolfo
I’m very upset with this change. Even with a 60 day notice, I wasn’t be able to make changes to the site if I decide to not renew it. In my case; I run my business as one person show, run the website, the webshop and produce custom physical products for clients.
I’ve invested a lot of time to make WooCommerce run. Back when I decided for Woo, it was financially (not time) the more economic solution and in the long term it would give me flexibility.
Calculating all the plugins together it doesn’t make sense to use Woo anymore. I’m better (and more secure in terms of payment and credit card data) off with e.g. Shopify, Ticktail or Smoolis. And I also save a lot of time not needing to updating all these plugins.
I think this is bad customer treatment. If you increase your fees for new clients – ok. But existing, it should be communicated with more lead time or the model kept. I’m one of the users that hardly needs support and I’m by no means a WooCommerce or WordPress pro. So I don’t feel like paying for clients who are to lazy to google, use common sense or do try and error.
And personally, I absolutely hate and detest it when someone or a company takes advantage of my dependency on them.
I’ve updated, for now. To buy me time and I will certainly look into the above mentioned solutions and do the math again for me. I value transparency and predictability very very much.
Woo just lost it’s entry segment for small companies – which they proudly advertised in the past.
Best, Natascha
Natascha, you make very good point here, mostly considering the fact we’re all small businesses. Indeed, the upset will be huge once this is made official – hence why I wrote this article to “help” WooCommerce reconsidering the pricing change at least for existing customers. Let’s see how that goes… but for now hold on tight! 🙂
Not happy at all Rodolfo. Wondering what do you think of https://yithemes.com/ and https://gplchimp.com/ as alternatives to the Woocommerce extensions?
Hey Noelle, thanks for your comment! In regard to your questions:
1) YITH sells their own plugins and they are 100% legit (plus, their subscription gives you access to all their products)
2) on the other hand, GPL resellers such as GPLChimp are simply packaging premium WooCommerce plugins developed and sold elsewhere (WooCommerce.com included) into a unique subscription. Their business model and ethos are not fair.
Yeah i’ll be looking at YITH in the future. In contrast to gplchimp, you’ll get that all-important Support.
🙂