I have been reviewing WordPress themes and plugins actively since 2007 and have always been aware of all the major players in the industry; however my experience at WordCamp Europe last month in Paris opened my eyes to so many WordPress companies I was never been aware of.
There are so many new companies fighting for a piece of the WordPress pie.
One way to look at it is that the WordPress market is much more competitive today than it was just a few years ago. Others would argue that the market has become saturated.
With more people fighting for a share of the premium WordPress market, we are seeing many companies change the structure of their business in order to survive. Along the way, I believe many companies are forgetting about the customer.
Watch my video below to hear my thoughts on this issue.
Prefer to read my thoughts? Keep reading on :)
Building a Sustainable WordPress Business
ManageWP.org is one of the best places to find out what is currently on the mind of WordPress developers. Great articles are being published and shared by developers every day; which gives you an insight into what problems WordPress companies are facing.
I check ManageWP.org semi-regularly and one of the common themes in 2017 has been about how to structure a WordPress business. There have been countless discussions on topics such as pricing, automatic renewals, renewal discounts, and more.
These problems have arisen because of a changing WordPress market that is becoming more competitive every day. Companies are trying to adapt to changes in traffic, search engine algorithms, customer spending habits, and more.
You have no doubt heard of SaaS, which stands for Software as a Service. It's became the latest buzzword within the WordPress industry and refers to the fact that many WordPress companies are changing their business structure to a subscription model.
One reason companies have moved away from lifetime licenses is because it was not seen as being sustainable as all profits are generated from bringing in new customers, not looking after existing ones.
We are also seeing many companies adopt automatic renewals for customers and the figures being reported suggested it is very profitable to do so. You may recall, for example, that Ninja Forms saw their renewal rates increase from around 20% to 80% by just making customers opt-out of renewals instead of asking them to opt-in.
Pricing has been a hot topic too. Earlier this year Pippin Williamson explained why he increased the cost of many Easy Digital Downloads extensions by as much as 250%. He talked about how this price increase was necessary as the volume of support tickets being raised by customers was very high and could not be maintained moving forward.
The most recent discussion have focused around the cost of renewing WordPress plugins and themes.
Last month WooCommerce upset many customers by removing their 50% discount for renewals.
I think everyone agrees that the way WooCommerce handled their recent price increase was poor. I discussed the issue last week in my article “The WordPress Community Needs a Good Alternative to WooCommerce“. Vova Feldman from Freemius also wrote a fantastic article about the topic of renewal costs a few weeks ago in his article “The Do’s And Don’ts of Renewals Discount for WordPress Plugins And Themes, Following The WooCommerce Blunder“. I highly recommend reading Vova's article as it will give you a good understanding about why WordPress companies are changing their business structure.
It may seem to some WordPress users that some WordPress companies are being greedy and hiking up their prices in order to squeeze more money out of their customers. Perhaps that is true in some cases, but generally speaking I think most WordPress companies are restructuring in order to maintain a profitable business in a highly competitive market.
I do believe, however, that WordPress users (i.e. customers), are not being made a priority.
A Misunderstanding of Sorts
Let's start off this section with some stereotypes.
- WordPress users don't understand the difficulties WordPress developers face
- WordPress developers don't understand the needs of WordPress users
Are these statements true?
In my experience, they frequently are.
As someone who has reviewed thousands of WordPress plugins and themes and run WordPress communities like Rise Forums, I regularly come into close contact with the developers who create products and the customers they create products for. This has allowed me to get a better understanding of both sides.
WordPress Users Can Be Such a Pain
You cannot attend a WordCamp without hearing people telling stories about providing support to customers. This is understandable as providing good support is one of the largest drain on time for a company.
I believe part of the problem is that many WordPress users have unrealistic expectations about the kind of support a company should provide to them.
When an error or problem arises, users do next to no research into resolving the issue. I frequently see WordPress users go to their hosting company or theme provider with…well, just about any WordPress problem they experience; regardless of whether it has anything to do with the product or service they purchased.
The problem is that many WordPress users have no desire to improve their knowledge of WordPress and just want someone else, anyone else, to resolve problems for them.
I experienced this firsthand when I helped people with WordPress support in the discussion rooms for my old blogs Blogging Tips and WPMods. People would ask for help with problems that could be resolved with a simple search on Google. When help was provided, they would frequently ask you to do it for them as they could not be bothered to do it themselves. That always annoyed me as I was providing help free of charge to help the community and users expected others to do the work.
Being open source means that people can start using the self-hosted version of WordPress with nothing more than a $5 website hosting plan. This low entry cost to the world of WordPress, coupled with the availability of quality WordPress themes and plugins that are free to download, explains why many WordPress users feel entitled to get everything free of charge.
I have seen people complain when free WordPress themes and plugins aren't actively supported by developers. I have also seen people purchase plugins for under $10 and then complain when their ticket hasn't been responded to within an hour.
Therein lies one of the biggest problems of the WordPress community. A large number of WordPress users expect the world, but they are not willing to pay for it.
So next time you hear a WordPress company talking about the cost of providing good support to customers, remember the kind of people they need to support every day.
WordPress Companies Do Not Understand Their Customers
Communities such as ManageWP are mainly visited by WordPress developers, not non-technical WordPress users. Therefore, hanging out there too often can give you an unrealistic snapshot about what is happening within the WordPress community.
We regularly see discussions that focus on how to make a WordPress business more profitable. Rarely do we see anyone talk about the problems with WordPress companies themselves.
WordPress companies are not perfect. Far from it.
A large number of WordPress companies are very unprofessional and have no interest in what their customers want or need.
This is particularly true when a company is launching a product.
It should be no surprise that a high percentage of the WordPress themes and plugins that I review on this blog, and on my previous WordPress related blogs, are newly released. What has always annoyed me is that nearly all WordPress product releases are rushed.
If you look back at many of my reviews, you will see a common theme running through them.
- The product has many bugs and errors
- The product has next to no documentation
- The product is littered with spelling mistakes and grammatical errors
- The sales page is promoting features that have not yet been added and have no schedule to be implemented
All of these problems highlight the fact that companies are not testing their products thoroughly before releasing them to the public.
This became very clear to me after doing some testing for a large WordPress company.
A few years ago I was approached by an established WordPress company to review their upcoming WordPress theme before it was released. I spent a long time testing it and prepared a five page document that detailed dozens of errors and bugs and stressed that these issues had to be addressed before release as the product was not currently fit for sale. A few weeks later I noticed that the company had just released the theme regardless of the advice they paid me to provide.
By releasing a product that they knew was full of bugs, the company was knowingly selling a poor product to customers. There is absolutely no excuse for that.
WordPress companies need to listen to customers and look at ways to help them. Rushing product releases is at best short-sighted and at worst selfish.
If companies put themselves in the shoes of their customers, less problems would arise.
For example, if a large number of a company's user base are beginners, rather than complain about the basic questions customers ask, simplify the product and integrate more documentation directly into it so that non-technical users are not lost.
Established WordPress companies do tend to take more care of their customers, but it is clear that they are not giving the opinion of customers consideration when pricing structures are changed.
Don't Forget About the Customer
Let's take a step back and look at the core topics that I have covered when building a sustainable WordPress business.
- Replacing lifetime licenses with monthly or yearly subscriptions
- Changing the terms of products so that customers need to opt-out of automatic renewals, not opt-in
- Increasing the price of products
- Removing the renewal discount for established customers
What do all of these changes do?
They increase the cost of using WordPress for customers.
When you look at the articles about the above pricing changes, all you see are developers discussing whether it increased profits or not. There is absolutely no discussions on whether these price changes are actually justified or not.
I completely understand why companies want to increase prices, but as someone who purchases many WordPress products, I always ask whether a price increase can be justified.
If you read the article on WP Tavern about WooCommerce increasing renewal costs, you will see many people complaining about the fact that WooCommerce are not providing good support. It is therefore understandable that WooCommerce customers are pissed off. Would you be happy seeing a company who is providing a bad service double their prices without warning?
In the past WooCommerce (WooThemes) justified price increases by saying that it was necessary to provide better support, but if support has not improved after increasing prices, all a company has done is made their product less valuable to customers and to the whole WordPress community.
I strongly believe in WordPress companies charging for support. Companies cannot be expected to provide support long-term without compensation.
In the past, products sold on Envato marketplaces came with lifetime support.
In theory, this sounds like a great deal for customers, but in practice it is not. This business model means that all profits are generated from bringing in new customers instead of keeping existing customers happy. Therefore, if a product is not selling well, the seller never has an incentive to provide good support.
Today, products on Envato stores come with six months of support by default, with a further six months available for a small additional fee.
I fully support the decision by Envato to limit support for a product to six months unless a customer pays to extend support further; however, the nature of the Envato marketplace means that customers regularly get a poor deal.
I have purchased many WordPress plugins and themes on Envato stores that were buggy as hell. When I reported issues about the product I did not receive a response for weeks. Six months pass and my support expires. At this point I am left with a product that still does not work as it was intended and the seller refuses to help anymore unless I pay for additional support (why would I give more money to a company that never provided good support?). If the seller does eventually fix the error, I am still in the position where I have to pay an error to be fixed that should never have been there when I bought it.
The software as a service concept ensures that customers pay for yearly support and updates. Again, this is something I fully support and can understand why many companies are moving to this pricing structure.
However, let's not keep our heads in the clouds and say this pricing structure is always good for customers. It's not.
Boasting that your company sells 20 premium WordPress themes and 15 premium WordPress plugins is great for your sales page, but maintaining that number of products is a different story. It is not uncommon for dedicated WordPress theme and plugin stores to sell products that have not been updated in years.
If a company is not updating their products and the customer does not need support, what is the justification for charging them a yearly fee?
This problem exists in the Envato marketplaces too.
When you search for WordPress themes and plugins on ThemeForest and CodeCanyon, the created date and last updated date are frequently identical. So if you buy a WordPress theme and you find out eight months later it is not working correctly, chances are the seller will not help you unless you pay for extended support (and Envato's notoriously poor customer support is rarely helpful in situations like this).
OK Kevin….Get to the point :)
My point is that none of these problems are ever raised when companies and developers discuss pricing. Few companies even acknowledge there are any problems.
Most companies are raising prices and not even giving customers any warning about it (another reason people are pissed off about WooCommerce).
This highlights the fact that in the quest for profits and sustainability, customers are largely being forgotten by WordPress companies.
I can fully understand why WordPress companies need to change their pricing practices, particularly if they undervalued their product in the beginning.
It is, however, also important to remember that in such a competitive market, if you start taking your customers for granted and increase prices without any justification, you devalue your product in the eyes of many customers and make alternative solutions more appealing.
Migrating from one WordPress solution to another can be a pain, but if customers are taken from granted, that is what many will do.
What Say You?
Many of the points I have raised in this article are arising because WordPress companies are trying to adjust to a changing WordPress market that is becoming more competitive every year. Companies are seeing their margins being cut and are responding to that.
In the middle of all of this restructuring, the needs of WordPress users are largely being forgotten.
Value is subjective so there are always going to be customers who are unhappy when prices increase, but there has to be some justification for a price increase or you may see loyal customers go elsewhere.
I would love to hear your opinion on this subject so I encourage you to leave a comment below and share your view on this issue.
Thanks for reading.