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Pricing mistake 101: You never ever change those old plans. Instead, you grandfather them. Especially so if you're still a young platform and have most growth a

Pricing mistake 101: You never ever change those old plans. Instead, you grandfather them. Especially so if you're still a young platform and have most growth ahead of you, the "loss" of not charging the new - and supposedly higher - pricing is gonna be trivial 2 years from now, with lots of new projects coming in. But the NPS hit from pissing your most loyal users off and the subsequent damage to your growth curve are huge. Also, I do love Bezos mantra of always becoming cheaper over time. That is the core of Amazon's brand. Whereas Oracle, IBM, and the old guard always make you pot committed and charge an arm and a leg, the Amazon guys will leave money on the table. That is how you earn trust.

manigandham 9y ago
> the Amazon guys will leave money on the table What? they're a business like any other and they're not interested in minimizing profit, there's lot of thought that goes into their pricing and you can be sure that your opinion and trust is an outcome of their strategy to make more money.
- philfrasty 9y ago
  „...you can be sure that your opinion and trust is an outcome of their strategy to make more money...“ Is exactly what the parent comment said...
  - thr0waway1239 9y ago
    ..making up in scale what you lose in margin. I think Amazon pulls this off because their prima donna is the paying customer, not the programmer who thinks talking directly to customers is the worst possible reflection of their ability to automate. Automation is great and all, but Google has a major problem when it comes to empathizing with the customers. Also, is there any possibility of legal action against Google for this bait and switch, which seems to be quite clearly the case here?
    - fovc 9y ago
      I would seriously look into small claims court. It's allegedly somewhat effective with airlines (e.g. https://www.washingtonpost.com/lifestyle/travel/small-claims-court-a-better-bet-for-stiffed-airline-travelers/2013/06/27/cf3a3410-dd04-11e2-bd83-e99e43c336ed_story.html?utm_term=.b50a6425538e https://www.washingtonpost.com/lifestyle/travel/small-claims...)
  - manigandham 9y ago
    What trust does that earn exactly? It's a strategy, not some noble cause.
    - 83457 9y ago
      Trust that you won't be ~extorted~ bait and switched in the future?
      - manigandham 9y ago
        How so? Because they haven't done it yet? Where does this extra trust come from?
- vthallam 9y ago
  > What? they're a business like any other and they're not interested in minimizing profit Of course, they are a business. But they look at minimising the price, increase the scale, have a monopoly and earn money.
- jhall1468 9y ago
  > they're a business like any other and they're not interested in minimizing profit Actually they are. Minimizing profit is sacrificing short-term gains for long-term gains. Increasing prices helps your short term profit, but you tend to lose customers to competitors. Decreasing prices means less profit right now, but you tend to convert more customers. Companies aren't purely RIGHT NOW profit-driven. That's why many companies burn cash and take on debt. They're driven by growth (whether vertical or horizontal). Bezos is obsessed with growth. That's why they've only recently started making money. Enormous investments in AWS, FBA and a host of other products put them in the red, but in doing so, Amazon has incredibly horizontal growth.
  - manigandham 9y ago
    The timeframe does not change between my first phrase and the last. Overall (as in lifetime) the company is maximizing profits (as companies are designed to do). They certainly aren't "leaving money on the table" unless it's a plan to extract even more, so I don't see why that's so great as the GP comment says. They're good competition for the industry but I don't understand how their pricing automatically engenders trust. Also value is not equal to price and many major companies understand that absolute price is rarely the significant factor. > Minimizing profit is sacrificing short-term gains for long-term gains. That would actually be maximizing profit...
    - jhall1468 9y ago
      > The timeframe does not change between my first phrase and the last. The timeframe dictates behavior. But, you responded to a comment that said Amazon will leave money on the table, arguing that they won't. They will, and do, leave money on the short-term in order to benefit their long-term strategy. Short-term vs Long-term profit motivations are actually MASSIVELY different sets of behaviors. > That would actually be maximizing profit... Yes, if you assume a company is infinite that's true. But since there's currently not a company that's existed forever, I can safely assume that such a thing doesn't exist. You can't argue profit without arguing time. Particularly when your argument was that all companies focus on profit at the exclusion of all other things. Growth companies focus on growth over profit. And while, yes, over time that can result in more profit, it also may not. If pure profit were the only motivation, short-term MASSIVE profits would be the only goal ever, since it's vastly more real than potential profits if everything works out.
- draw_down 9y ago
  Boy, how do you look like a company like Amazon and conclude they're not interested in minimizing profit. That is exactly what they do.
  - manigandham 9y ago
    Bezos is worth 80B. Amazon is a global empire operating in practically owns the ecommerce industry and extracts an enormous amount of profit. What exactly are they minimizing? Charging less to make more is actually maximizing profit for the company.
delhanty 9y ago
Tell that to FastMail, who have pissed me off by deciding to end-of-life the "lifetime" 16Mb member account I set up for my father with a one-time $15 payment. 16Mb is modulo zero these days, but it's enough for him - he just deletes some emails when it gets full. He also gets imap access and FastMail's spam filtering, which is really very good. I can also assign him an email address from a domain that I own that is associated with my FastMail enhanced account. I don't want my $15 back. What I DO want is for FastMail to honour our existing agreement, which was a LIFE-TIME 16 Mb member account in exchange for $15. See also here: http://www.emaildiscussions.com/showthread.php?p=599512 http://www.emaildiscussions.com/showthread.php?p=599512 Text of their latest email is below the line: ============================================= Back in January we contacted you with some important information about your @.* FastMail account. We're now contacting you again to remind you that from 31st July, 2017 our 'Member' level plans will be discontinued. To continue using your FastMail account after this time you'll need to select one of our current plans. Please note: your email address will remain the same. As a long-time FastMail user we're offering you 50% OFF all upgrades until the end of July, which includes our already discounted multi-year subscriptions. And if you upgrade now we'll also add all the remaining time until 31 July for free! As an added bonus we've also given you $15 credit to put towards your subscription, which is equal to the amount you originally paid for your account. This means if you were to upgrade to a Basic account today for one year, with the discount and account credit you are effectively getting FastMail at no charge until 31 July 2018 with a massive 2 GB of storage (up from 16 MB)!
- jbob2000 9y ago
  There could be technical issues with keeping grandfathered plans around. Maybe the 16mb email accounts were on an old system that was getting increasingly difficult to maintain?
  - delhanty 9y ago
    I'm sure that's true. But then it's not my problem. FastMail made an agreement - $15 in exchange for a lifetime member account. Now they don't want to honour that agreement. And they've created work for me: What to do about my father's email account? I have his email address as part of the domain that I have associated with my (legacy) FastMail enhanced account. They've discontinued family accounts for new signups.
user5994461 9y ago
Pricing mistake 202: Relying on services that don't charge enough to be sustainable. They will go bankrupt sooner or later, it's only a matter of when.

manigandham 9y ago

> the Amazon guys will leave money on the table What? they're a business like any other and they're not interested in minimizing profit, there's lot of thought that goes into their pricing and you can be sure that your opinion and trust is an outcome of their strategy to make more money.

philfrasty 9y ago
„...you can be sure that your opinion and trust is an outcome of their strategy to make more money...“ Is exactly what the parent comment said...
- thr0waway1239 9y ago
  ..making up in scale what you lose in margin. I think Amazon pulls this off because their prima donna is the paying customer, not the programmer who thinks talking directly to customers is the worst possible reflection of their ability to automate. Automation is great and all, but Google has a major problem when it comes to empathizing with the customers. Also, is there any possibility of legal action against Google for this bait and switch, which seems to be quite clearly the case here?
  - fovc 9y ago
    I would seriously look into small claims court. It's allegedly somewhat effective with airlines (e.g. https://www.washingtonpost.com/lifestyle/travel/small-claims-court-a-better-bet-for-stiffed-airline-travelers/2013/06/27/cf3a3410-dd04-11e2-bd83-e99e43c336ed_story.html?utm_term=.b50a6425538e https://www.washingtonpost.com/lifestyle/travel/small-claims...)
- manigandham 9y ago
  What trust does that earn exactly? It's a strategy, not some noble cause.
  - 83457 9y ago
    Trust that you won't be ~extorted~ bait and switched in the future?
    - manigandham 9y ago
      How so? Because they haven't done it yet? Where does this extra trust come from?
vthallam 9y ago
> What? they're a business like any other and they're not interested in minimizing profit Of course, they are a business. But they look at minimising the price, increase the scale, have a monopoly and earn money.
jhall1468 9y ago
> they're a business like any other and they're not interested in minimizing profit Actually they are. Minimizing profit is sacrificing short-term gains for long-term gains. Increasing prices helps your short term profit, but you tend to lose customers to competitors. Decreasing prices means less profit right now, but you tend to convert more customers. Companies aren't purely RIGHT NOW profit-driven. That's why many companies burn cash and take on debt. They're driven by growth (whether vertical or horizontal). Bezos is obsessed with growth. That's why they've only recently started making money. Enormous investments in AWS, FBA and a host of other products put them in the red, but in doing so, Amazon has incredibly horizontal growth.
- manigandham 9y ago
  The timeframe does not change between my first phrase and the last. Overall (as in lifetime) the company is maximizing profits (as companies are designed to do). They certainly aren't "leaving money on the table" unless it's a plan to extract even more, so I don't see why that's so great as the GP comment says. They're good competition for the industry but I don't understand how their pricing automatically engenders trust. Also value is not equal to price and many major companies understand that absolute price is rarely the significant factor. > Minimizing profit is sacrificing short-term gains for long-term gains. That would actually be maximizing profit...
  - jhall1468 9y ago
    > The timeframe does not change between my first phrase and the last. The timeframe dictates behavior. But, you responded to a comment that said Amazon will leave money on the table, arguing that they won't. They will, and do, leave money on the short-term in order to benefit their long-term strategy. Short-term vs Long-term profit motivations are actually MASSIVELY different sets of behaviors. > That would actually be maximizing profit... Yes, if you assume a company is infinite that's true. But since there's currently not a company that's existed forever, I can safely assume that such a thing doesn't exist. You can't argue profit without arguing time. Particularly when your argument was that all companies focus on profit at the exclusion of all other things. Growth companies focus on growth over profit. And while, yes, over time that can result in more profit, it also may not. If pure profit were the only motivation, short-term MASSIVE profits would be the only goal ever, since it's vastly more real than potential profits if everything works out.
draw_down 9y ago
Boy, how do you look like a company like Amazon and conclude they're not interested in minimizing profit. That is exactly what they do.
- manigandham 9y ago
  Bezos is worth 80B. Amazon is a global empire operating in practically owns the ecommerce industry and extracts an enormous amount of profit. What exactly are they minimizing? Charging less to make more is actually maximizing profit for the company.

delhanty 9y ago

Tell that to FastMail, who have pissed me off by deciding to end-of-life the "lifetime" 16Mb member account I set up for my father with a one-time $15 payment. 16Mb is modulo zero these days, but it's enough for him - he just deletes some emails when it gets full. He also gets imap access and FastMail's spam filtering, which is really very good. I can also assign him an email address from a domain that I own that is associated with my FastMail enhanced account. I don't want my $15 back. What I DO want is for FastMail to honour our existing agreement, which was a LIFE-TIME 16 Mb member account in exchange for $15. See also here: http://www.emaildiscussions.com/showthread.php?p=599512 http://www.emaildiscussions.com/showthread.php?p=599512 Text of their latest email is below the line: ============================================= Back in January we contacted you with some important information about your @.* FastMail account. We're now contacting you again to remind you that from 31st July, 2017 our 'Member' level plans will be discontinued. To continue using your FastMail account after this time you'll need to select one of our current plans. Please note: your email address will remain the same. As a long-time FastMail user we're offering you 50% OFF all upgrades until the end of July, which includes our already discounted multi-year subscriptions. And if you upgrade now we'll also add all the remaining time until 31 July for free! As an added bonus we've also given you $15 credit to put towards your subscription, which is equal to the amount you originally paid for your account. This means if you were to upgrade to a Basic account today for one year, with the discount and account credit you are effectively getting FastMail at no charge until 31 July 2018 with a massive 2 GB of storage (up from 16 MB)!

jbob2000 9y ago
There could be technical issues with keeping grandfathered plans around. Maybe the 16mb email accounts were on an old system that was getting increasingly difficult to maintain?
- delhanty 9y ago
  I'm sure that's true. But then it's not my problem. FastMail made an agreement - $15 in exchange for a lifetime member account. Now they don't want to honour that agreement. And they've created work for me: What to do about my father's email account? I have his email address as part of the domain that I have associated with my (legacy) FastMail enhanced account. They've discontinued family accounts for new signups.

user5994461 9y ago

Pricing mistake 202: Relying on services that don't charge enough to be sustainable. They will go bankrupt sooner or later, it's only a matter of when.