About That 37Signals 100% Price Increase… Time To BUMP!

| By Rodrigo Vaca

Yesterday, 37Signals decided to increase their entry-level Basecamp plan from $24 to $49 dollars. ReadWriteWeb quoted:

Basecamp quietly increased its cheapest subscription option from $24 to $49 per month, a move that was criticized by some as as being unfair to small business customers.

I personally like and respect the good work that the 37Signals team does, like their design taste.. and they certainly have contributed a lot to the entire web community. But going from $24 to $49 in this economy is just not cool. We’re in the middle of mid-term elections in the US, and no politician in his/her right mind would suggest raising taxes at this time, would they? Well, with businesses, and particularly with SMBs, we’re always in election mode. We’re puzzled by the price increase. Even Steve Jobs lowers prices over time! They are profitable, why raise prices by so much? From $24 to $49… for the entry level plan? 
In any case, it is no secret that we at Zoho are philosophically opposed to overpriced software. And of course, you also know that we have our own project management & collaboration product, Zoho Projects, that offers a lot more functionality, like reports, task dependency, integration with Google Apps, import your Microsoft Project files, and integrated real-time chat. And that’s not all… our monthly subscription plans start at just $12 per month. Many of our customers are small and medium sized businesses, so we cater to them and offer affordable options that they will find attractive.

BUMP! 

In the last few months we have gotten an increasing number of requests from people to migrate from Basecamp and into Zoho Projects. So we created a tool that provides and easy interface for importing your project data from Basecamp into Zoho. Zoho Projects BUMP includes import of projects, tasks, milestones, users and forum posts. This is not something we created just in the spur of the moment yesterday. We had it for a while for those people who asked. Now, since 37Signals decided to increase to increase their prices by so much, we thought this would be a good time to more broadly publicize this. So head over to Zoho Project’s BUMP and get started! 

And if you have any questions, please don’t hesitate to contact us: support@zohoprojects.com.

UPDATE: Jason Fried from 37Signals contacted us (see below) to dispute the fact that they increased their plans. I think the way you look at it is very technical and splitting hairs. Yes, their Plus plan is still $49/month as it was before. My memory is not that good, but Jason says it has always been $49, we’ll take his word for that. I think we can all agree on the fact that before, their lowest paid plan was $24, now, their lowest paid plan is $49. Here’s a screenshot of that: http://yfrog.com/c8246p. I think that’s as clear as a price increase will be. It’s like an airline saying: we didn’t increase our prices, but now you have to fly business if you want to fly… but hey, business class prices have been always the same!

Rodrigo
ps. …and if this results in 37Signals going back to their older price structure… well, you’re welcome! 

COMMENTS (20)

  1. Man, after reading this thread I am sure I will never get a Zoho product. The owner apparently makes a claim and is proven wrong, and then twists the situation so he doesn’t have to say “I was wrong.” Unimpressive.

    Reply

  2. First off, I use Zoho products. I experimented with 37signals and their products did not fit our needs.

    This claim about 37signals increasing it’s prices is pretty bogus. 37signals did not *increase* their price at all, they simply removed the basic plan. This IS NOT a price increase. You could call an increase if they started charging all Basic plan subcribers $49/month instead of $24…they didn’t.

    As of today the basic plan is listed below the 3 main offerings, but if it wasn’t “big deal!” It is up to 37signals whether they want to offer a basic plan. I would like to know why zoho removed their $6/month plan! What you didn’t know about that plan? You know $6/month with 5 projects, 2 templates and 1gb of storage…oh wait! Even if you had that option in the past (which you didn’t) new clients would not know about it anyways.

    The post title should be changed to “About 37signals dropping the basic plan” (which would no longer be valid) or this post should be removed because it is false.

    Reply

  3. Pingback: Did 37Signals Increase BaseCamp Price or Not? The Backdoor Experiment. | Zoli's Blog

  4. Pingback: Did 37Signals Increase BaseCamp Price or Not? The Backdoor Experiment. | Zoli's Blog

  5. Jeppe,

    Ok. We’re beating a dead horse now.

    Let’s just agree to disagree here. I’m sure plenty of people feel like you do.

    And just the same way, plenty of people felt like we did – and you saw the reaction across the blogosphere, so we’re certainly not alone either.

    For the record, my tax increase analogy was just that- an analogy, keeping in sync with the mid-term election times in the US.

    Rodrigo

    Reply

  6. Rodrigo,

    That is such warped logic.

    You, quite blatantly, compare the value and features your products to their products, so you’re perfectly aware if the value aspect, which hasn’t changed on their plans. Whether or not experimenting with how many options to display leads to eliminating cheaper plans in the future, it has nothing to do with increasing prices. That’s just casting assertions on the conclusions of the experiment.

    If the price level of the cheaper plan is important to 37signals’ prospects, it will show from their experiment. Maybe more people will start with the free version. Maybe more people won’t sign up. Maybe more people will choose a plan instead of leaving in confusion.

    It’s perfectly legit. It’s not raising prices. And it’s certainly not comparable to a tax increase.

    When 37signals wrote in REWORK that you should “pick a fight” with the competition, I’m sure they meant “pick a fight intelligently”. Don’t fake outrage – it’s too obvious.

    Jeppe

    Btw, Apple still sells FileMaker Server. It’s just not being promoted. A couple of months ago they promoted Bento 3 which is their cheaper, less feature-rich DB option. You wouldn’t call that a price decrease would you?

    Reply

  7. Rick -

    Sorry, but you are misreading our pricing. For Zoho Projects, we charge on features & number of projects. We give an unlimited number of users, so larger employer/users do not impact our pricing.

    Rodrigo

    Reply

  8. Jeppe,

    You are mixing two things. One thing is to entirely remove a product from being featured on the website (the Apple example you give).

    Another is to remove the cheapest option from your pricing page.

    I’m sure you can understand how those two things are different.

    Do you remember when Google remove the Google Apps Standard edition -i.e. the free one- from their website? Everyone caught on it and they called them on it. What was Google’s response? “Oh! Sorry! We were just testing”. And of course, fast-forward to today… try to sign-up for the free version using the main navigation option.

    Do you see a connection now?

    We have many interesting things to talk about – and we do that constantly. We just don’t talk about our sales/marketing experiments (for the record, NONE of which involve hiding lower prices from our customers).

    Rodrigo

    Reply

  9. Rodrigo, businesses constantly experiment with how many products to display in their store front or on their website. Too many options often confuse people into not buying at all. There is no way you can compare that to a tax increase, c’mon, man.

    Apple used to market FileMaker Server on apple.com. Now they don’t. Actually, try to find FileMaker Server without using Google – it’s a challange. So what is your take on Apple’s price changes on DB software?

    The priceless moment is when you say that you consider Matt B’s book quote the “Best Comment Ever on Zoho Blogs”. If that’s true, I consider your blog to be in deep trouble :) And it probably confirms that it’s just constructed outrage to get cheap traffic.

    Don’t you as a company have any interesting experiences or insights from your work to talk about, rather than having to make up stories about your competitors?

    Reply

  10. Sorry zoho but when your prices are 4x more expensive at larger employee/users, I will take 37signals pricing any day of the week.

    Reply

  11. 37signals website says the below on pricing. This experiment shows that they are violating their own promise – having the price hidden & keeping it as a secret. They are not showing their best price to their customers.

    No hidden fees or secret prices

    We believe everyone is entitled to the best price we can offer. Our prices are public, published right on our site, and the same no matter who you are.

    Reply

  12. Pingback: Did 37Signals Increase BaseCamp Price or Not? The Backdoor Experiment.

  13. Jason,

    You are sticking to the party line, that’s fine.

    The fact of the matter is, regardless how the price plans are named, the lowest paid plan until a few days ago was $24, the lowest paid plan today is $49.

    You might still be providing all of the $49 plan benefits at the $49 price point. But that’s effectively a price hike for new customers. The fact that you are honoring the previous price for current customers is good.

    The bottom line is, this seems to be, at least from my vantage point, a less-than-transparent way to increase your prices.

    For the record, it is of course your business, so you are free to increase prices, lower prices and experiment.

    Rodrigo

    Reply

  14. REWORK – page 141 – Pick a fight

    “If you think a competitor sucks, say so. When you do that, you’ll find that others who agree with you will rally to your side. Being the anti-_______ is a great way to differentiate yourself and attract followers.”

    Reply

  15. Pingback: Did 37Signals Increase BaseCamp Price or Not? The Backdoor Experiment.

  16. Pingback: Did 37Signals Increase BaseCamp Price or Not? The Backdoor Experiment.

  17. You can look at archive.org and compare prices. Our $49 plan today is the same $49 plan from a year ago. Same with our Premium plan, Max plan, and free plan. In fact, we’ve actually increased disk space across the board within the last two years without increasing prices.

    What we are doing right now is experimenting with the plan mixes and presentation of the plans on the sign up page. The $24 plan is still an option inside the product. You can sign up for free and upgrade to $24 if you’d like. It has not been eliminated as an option. We just don’t have it displayed on the sign up chart this week. Yesterday we didn’t have the free plan, today we do. Down the road we may remove the top plan to see what happens. We are experimenting with demand, display, clarity, and the overall mix.

    Many businesses test pricing. It’s a smart thing to do. One thing we’ve found is that the more plans we offer right up front the more confused people seem to be about which one to choose. Reducing the number of plans, and experimenting with different mixes, makes sense.

    That’s the full story. What is misleading is your headline. We have not raised prices.

    Reply

  19. Jason,

    On your pricing page, your lowest available paid plan is now $49. Before, your lowest available paid plan was $24. You can change the names if you want, but still… that’s more than 100% price increase.

    Rodrigo

    Reply

  20. This isn’t accurate. We have not raised prices. Our prices have been steady for years.

    Max is still $149.
    Premium is still $99.
    Plus is still $49.
    Basic is still $24.
    Free is still free.

    Same prices as last week, last month, last quarter, last year, two years before that, etc. Each plan has the exact same levels and features and projects and disk space as before.

    We’re simply experimenting with the mix of plans we are showing on the sign up screen. We used to show six, but that confused people. So we started showing five. Then we started showing four. Now we are experimenting with three main plans and one free plan. We may stick with this mix or change it up again.

    We’d appreciate if you would change your headline and post a correction, otherwise you are posting misleading and false information.

    Thank you.

    Reply

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