The emails from clients started coming in pretty quickly. “Got any recommendations for alternatives to Hootsuite?” “Hey, we can’t afford this new pricing. Got suggestions?” and of course “What on earth are they thinking?”
That last one is what I’ve been wondering. At the time of this writing, Hootsuite, the popular social media posting and scheduling tool, has just emailed its customers. Maybe all of them. Maybe only the ones on Hootsuite’s free plan or on Hootsuite Professional. (Frankly, their free plan used to be pretty good, but that changed a year or two ago, so all of our clients who use it transitioned to Hootsuite Professional some time ago.) See below for the main portion of the email they sent to one of our clients. Short answer – DOUBLE the price.
What I’ve been able to glean from social media and various postings is that Hootsuite’s (now not-too-great) free plan is being discontinued completely, and the Hootsuite Professional Plan, which was the first level plan, is doubling in price. One person calculated a 128% price increase for his plan.
I have yet to see any post by anyone, or any comment in any thread, that’s saying “Yay, Hootsuite is SO AWESOME, I’ll pay them whatever they want.” You got it. NO ONE IS HAPPY.
Ahem, wait a second. That’s not completely true. I’ll circle back to that in a bit here.
I have many thoughts about this.
First off, I can understand why they made such dramatic changes to their free plan a year or two ago or whenever it was. People were getting the free plan and staying on it forever. Honestly, that free plan is why I suggested Hootsuite to clients with only 1 or 2 people doing marketing. It did the trick. When they changed it, that was a deep breath – and a recognition of a good ride while it lasted, right? So we moved into Hootsuite Professional and all has been well.
But consult the social channels today and you find a TON of people upset that the free plan is going away – and the majority of posts I’ve seen have come from solopreneurs and non-profit organizations who simply don’t have the wherewithal to pay subscription fees. Legit, but having customers who just stay on the free plan forever doesn’t really advance Hootsuite’s revenue goals, you know? So I get it.
But here’s where I get stuck. They’ve had a loyal customer base of Hootsuite Professional users that they’ve built over the years. I don’t know the exact size of that customer base, but it’s big. And I would wager that this base, this group of customers who pay for Hootsuite Professional, is likely the largest percentage of their user base AND the largest percentage of their revenue. I could, of course, be wrong about that, but I don’t think I am.
So my conclusion – and the conclusion many others have reached – is that they have made a deliberate decision to leave a substantial portion of their customer base behind. Wow. That’s huge.
Okay, I could rant about this for a while. But what are the lessons to be learned here?
Lesson 1: Users don’t care about features they don’t use
I’d have to attribute this to “failure to understand the customers.” Basically Hootsuite is justifying their price increase with language like “We’re committed to continuing to innovate and grow our product, and we have an ambitious roadmap to further develop a market-leading product that not only meets your needs, but exceeds your expectations.”
When people use this product, what problem are they trying to solve? A portion of the marketplace wants seriously advanced analytics, reporting, and a bunch of other enterprise-level capabilities. Those people – those companies – will definitely pay for those features.
Most other people just want one place to go to schedule their social media posts so they 1) don’t have to figure out scheduling in each platform 2) can sit down in one session and schedule for the week or the next two weeks 3) have a reasonable expectation that what they schedule will actually get reliably posted. That’s it.
So what we appear to have here is analogous to Microsoft saying “Hey, we love that you love Excel, and we’re adding advanced trigonometry features to it, so we are raising the price for everyone.” If all you do is add up columns of numbers, do you want to pay a premium for advanced trig features that you’ll never use? Of course not.
But Hootsuite seems to expect that its customer base won’t mind at all. They’re wrong. Every post I’m seeing is ABANDON SHIP!!! I’m seeing the word “predatory” thrown around, too. Not a good look, Hootsuite.
The lesson to take from this? Listen to your customers. Watch what they buy, Understand WHY they buy it. Make business decisions based on what YOUR market will bear. If you’re adding features, are they features that EVERYONE will want? Or would those features be better as separately-priced options? Evaluate carefully before making an announcement and codifying your decision.
Lesson 2: Pay attention to your competitors
Without a doubt, Hootsuite is taking a hit for their decision to become one of the higher-priced social media management tools. It has already hit them right square in the brand, and it’s going to hit them in the pocket – potentially in a very big way. I’m sure they knew all that before they took these steps. From the outside looking in, it’s regrettable, but maybe paring down their customer base and focusing on big-pocket enterprise accounts is where they want to be. (Been there, done that – everybody wants the whales, so they’d better be prepared for lots of competition and onerous RFPs.)
So anyway, who WILL make bank off of Hootsuite’s move?
Their competitors. They already are. Remember when I said earlier that SOME people are happy about Hootsuite’s move? Yes, it’s their competitors who are currently doing the happy dance.
I’m seeing chief executives of other social media management software companies tweeting publicly about their platforms IN RESPONSE to the tweets about “what are alternatives.” I’m seeing fans of other platforms sending users to check out the other platforms they use. And I’m seeing that Buffer and Social Champ and others are already getting new users. People who were paying Hootsuite monthly are cancelling their accounts left and right. People on Hootsuite annual plans are asking how to turn off auto-renew. It’s a bailout, to be sure.
And competitors with a decent offering are picking up all the small and mid-sized fish that Hootsuite is leaving in the sea. In the words of one Twitter user, “Nice to know when you’re not wanted. #hootsuite”
The lesson to take from this? Watch for your competitors to make moves that create gaps in the market that you can fill. Be ready and fleet on your feet should such a thing occur. Be prepared to have your CEO, if appropriate, offer up a few social comments in the networks. Consider how quickly you can make decisions and perhaps set up a special process for addressing suddenly-opened market gaps. Would it make sense to have a “show us your last Hootsuite receipt for a special discount for your first six months” type of program? Maybe it would – but it would require making those decisions quickly should such an opportunity arise.
Lesson 3: If you do it, be transparent
If I had the time, I’d be hanging out on Twitter these last few days, simply typing “But we ALL want to know” over and over again. You see, any questions being asked about the reasons for the price hike, or what new features there might be, or how to cancel an annual subscription, etc. are being met with “Please send us a direct message.” That’s crap. Honestly, it speaks of secrets and deceit and… brrr, did I just shiver?
The way Hootsuite’s social media team (or whomever is doing their Twitter responses) is responding to these tweets is eroding trust, not building trust. Is everyone getting the same answer? Or are there deals to be made? Why is this all so secret? Why won’t they answer RIGHT HERE ON TWITTER?
The lesson to take from this? If you’re going to make a big move like Hootsuite has done, own it. Stand proud in your decision. Answer every question quickly, accurately, and, if the question is asked publicly, answer it PUBLICLY. Do not hide in the shadows. Don’t make people DM you. Use this as an opportunity to BUILD trust, not to damage the trust relationships you’ve already built. Maybe have YOUR team research the competitors who will be getting the customers you’re setting aside and recommend other solutions to those folks.
Just imagine the good will that Hootsuite *could* have earned by saying “If you can’t afford this or need a free program, we understand. We suggest you consider X solution and Y solution. In our research, they appear to do a great job for small and mid-sized businesses. We’ve even negotiated with them to offer you a discount on your first six months.” (or something along these lines). Rather than being virtually tarred and feathered, Hootsuite would be getting praised in the marketplace.
One last thing
Don’t hide things. If you go to Hootsuite’s pricing page, all the prices shown are monthly prices, with an asterisk. The asterisk means that the price shown is the effective monthly price if you pay annually in advance. I have not yet figured out how to know what the actual monthly price is if you pay monthly. It’s my understanding that the Professional plan, showing as $99 per month (when paid annually), is $149 a month if paid monthly. The only way to really know that is to start a free trial. Another trust-buster.
I’m irritated by this whole business, mostly because it didn’t have to be this way.
To recap the lessons this whole shebang has reinforced in my marketing nerd brain:
- Constantly and consistently listen to your customers and know why they buy whatever you sell.
- Watch your competitors, constantly evaluate market gaps, and be prepared to step in if they make a move that abandons a portion of your market.
- Be transparent and own your decisions, whatever they may be.
As I sit here, writing this blog post, I’m struck by how relevant this is to a webinar I’m currently planning, The Power of Knowing Why Your Customers Buy. I didn’t expect this correlation to land in my lap today. Thanks, universe. I’ll happily accept the gifts where I find them. I hope you do that, too.