The Business Part of Business

Benefits of a Price Increase: A Customer Service Study

It’s time to raise your prices. Maybe.

Back in the days of The WordPress Helpers, I came to know a young man who happens to be one of the more successful members of The WordPress Community. And Pippin Williamson has recently started questioning the way his company does business because customer service is eating him alive. In his reflection on the matter, Pippin seeks the benefits of a price increase. And he believes he’s found it.

So back to that “maybe”. Pippin may be on to something. Or he may be making a huge mistake.

I’m not going to say anything snarky about young people not being as smart as older folks. Pippin Williamson is both smart and experienced. He gets it. Seriously. And when the conclusion he drew about the benefits of a price increase of as much as 250% for his software is measured against the happiness of himself and his team it’s hard to argue with his decision.

But in a world where everything matters, price increases just aren’t that simple.

I feel a customer service rant coming on.

To lower your support load, all you need to do is have fewer customers

Smart as he is, Pippin’s decision to reduce his customer service headache by reducing the number of customers he serves is about as tone-deaf as many of WordPress’ biggest players present as, regularly. Yes, Customer Service can be a pain in the behind. Yes, it’s expensive. Nevertheless, when you stop listening to your customers you’re on the way to destroying your business.

And generally the kind of customers who endure a 250% price hike aren’t talking. Your chance to listen gets shut off.

Our Customer Service Wall of Shame is full of stories about companies that had simply stopped listening. They’re all big. Sad as this is, size positions you to offset a decision to stop caring about customer service. But while big in the WordPress Community, Pippin Williamson is not big.

Benefits of a Price Increase

As I’ve said before, providing customer service pretty much always forces you to confront growing pains. Once customer service becomes a ‘cost center’ you have decisions to make. And it happens. It always happens.

Pippin, if you’re listening, please reconsider the path you’ve chosen. Fewer customers isn’t a path to growth. And presented the right way, paid customer service isn’t the dumbest idea.