A customer tried to add one teammate to a $24/month SaaS plan. Support told them to upgrade to $450/month instead. The speaker explores why this friction costs vendors money, even though they understand the operational complexity behind it.
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So I want to share a personal story about managing software plans. Anybody that has worked in B2B software on pricing and packaging knows firsthand that managing plans is notoriously complex and it often leads to really bad customer experiences. Here's an experience that I went through over the weekend that I think is instructive as well as illustrative of kind of what most customers are running into, uh, on a regular basis as it relates to plan modification. So the situation is that there is a tool that I use every day. I pay $24 a month for the tool. I love the tool. I think the vendor's incredible. And I wanted to add a teammate to my existing plan. Would've been happy to pay more for that teammate to be a part of it, assuming that more is reasonable. So the first thing I did is I checked the subscription management page in the, in the admin console. There was no direct option to add a seat. So then I started digging around into what were my plan options. There were 3 individual plans: Free, Standard, Pro. There was also a Business plan for teams, but that required contacting sales for pricing. Again, all I wanted to do is add a teammate to the Pro plan that I've been using for a year. I did not need any Enterprise features. So I decided to reach out to support and see if there was anything that they could do to help me, any guidance, and whether I could maybe double our subscription price to pay $48 a month. By adding another, another teammate. After contacting support, it took about 24 hours before sales responded. And when they responded, they proposed that we shift to a business plan that would start at $450 a month, a nearly 2,000% price increase from the $24 a month I'm paying today. The differentiation between the two plans cited by the representative was advanced features and unlimited storage. So obviously some customer experience issues here. I mean, first, the delay in response. This should have taken seconds. I should have been able to add another user to my team and pay more and be done with it. But instead it took a day for me to get information back. I won't be adding a teammate to the tool and I won't be paying the tool more money. Number 2 is the lack of personalization. The solution didn't fit my needs. I don't need the enterprise plan. I simply need another seat. And number 3, the steep cost increase. I mean, proposing that we jump 2,000% without any real understanding of our context, what we're trying to do, it's just not aligned with where we are with our current stage. And so as I reflected on this over the weekend, you know, I honestly, you know, besides being annoyed by the experience as a user, I felt a lot of empathy for the vendor. SaaS vendors face a ton of complexity with regard to how they manage plans. In fact, I once had a software engineer say to me, if I could wave a magic wand, I'd make it easier to change packaging without screwing up billing. And I get it. Little changes and little customer exceptions like the one I'm trying to procure trigger a wave of operations and adjustments across billing tools and CRMs and CPQs and ERPs. And application code. So again, I get it, but this experience is a risk to lifetime value, and it makes loyal customers more open to considering more agile competitors. It literally opens the door to curiosity into vendors that will make the purchasing experience and the user experience frankly easier and less frictionful. Nope. Final thought is without a way to easily modify plans, software businesses are risking not just the customer experience, not just customer satisfaction, but additional revenue opportunities, cross-sell opportunities, upsell opportunities. And that's exactly what happened to me this weekend and to the vendor that I would have happily paid more money to.
