New Pricing

[lesliekirk]

Re: New Pricing

When will the all (as in the last batch) of the Price Increase emails be delivered?

[Rick Wilson]

Re: New Pricing

Everything except about 200 emails has gone out (so about 98% have already been sent), the last 200 are special use cases and will go out over the next couple weeks.

[JFancett]

Re: New Pricing

I agree that it would technically be possible to meter our customers down to the cpu cycle, but the huge difference is that the product Amazon is selling is cpu cycles, memory and bandwidth. You're doing your own thing and they'll tally it up on your invoice. Our product is our software and we want the hosting to ultimately just be an underlying characteristic one doesn't need to think about as it's assumed to be included and possessing appropriate resources for a business of a given size. As we move further in that direction, hosting infrastructure resources will ideally get to the point where customers don't worry about gigabits and gigabytes, they just think about their business and what they'd like to see added to the software to better help their business.

One goal as we went through this process internally was to be able to bump the plans up to a level where most overages and the need to purchase additional seats could be eliminated for nearly everyone. This came about because an almost universal complaint has been getting billed unpredictable amounts every month, whether it be traffic overage, disk overage, hired a new employee and had to add a seat, etc. This issue, that customers do seem to very much dislike, is exactly what would continue if we added more metrics to what we bill for rather than eliminated them. Some would consider it fair, some wouldn't, but the common characteristic is that no one would have any idea what their monthly bill may look like.

As Rick just posted, there is still a lot of discussion occurring and we are listening to everyone's input and taking those ideas into consideration. I'm in San Diego this week too, albeit with rain today (huh?!?!), so keep posting thoughts, questions, complaints and we'll be talking about it all in depth.

Just to clarify.

1) I fully support Miva in doing whatever they feel is best for their company. Even if that means we can't afford it or frankly, are unwilling to afford it based on what we see in the market. I think I've developed some on-the-surface friendships in the community and in the company, but business is business.

2) I think what is lost in David and I's back and forth about what can be measured is that I only see that as one component of the pricing metric. There should be a base price for the platform (and possibly a lower priced core lite version) BEFORE usage tiers. I think Bronto (email service) is a great example of an enterprise level offering and let's be honest, Miva is leaning toward enterprise-lite pricing which I think is fine. Bronto charges you a flat fee to use their awesome software. And it's pretty great. What do you get for $2500/year? The software. Email sends are extra. The fact is, there are varying types of sites that present differing loads. I don't think you can pay for future intellectual property/platform development and pay for varying resource consumption with one metric, especially if it's top-line revenue.

Just throwing rough numbers out there, but what if the software started at $99/month for Core Lite platform, 3 support tickets via email and/or 60 minutes of phone support a year, 500MB storage and 5GB of transfer and an average number of CPU cycles based on that kind of traffic. Overages at $5-$7 per GB and for CPU cycles. Whatever that would be. If you can count it to know sites are using too much you can count it to charge them for the overage. The standard tier would be $249/month for Full Core platform, 10 support tickets via email and/or 180 minutes of support a year, 2GB storage and 20GB of transfer plus the average CPU cycles. And then, we need to let Miva nickel and dime us on feature development/multi-store/hosted payment portal/etc. That's not always a bad thing because you get to choose what you buy.

I just think it's attainable to get to a program where the price is reflective of what people consume. But most of all, keeping an eye on what is competitive in the marketplace.

[Rick Wilson]

Re: New Pricing

I just think it's attainable to get to a program where the price is reflective of what people consume. But most of all, keeping an eye on what is competitive in the marketplace.

Jason,

Even though I don't want to go to the a la cart style you describe, I agree with your core sentiment.

I do also think most long time Miva users don't truly grasp how either limited other platforms are (taking for granted simple things like FTP) and also often don't realize the true cost of running on another platform until they're "all in" so to speak.

If this was oil or pork bellies, defining "the market" would be easy, but it's a little more complex than that.

With that said, our goal is not to gouge anyone, take advantage of anyone (how would we keep growing and getting new clients if we did that), but simply to charge a fair market rate for our IP and build a successful SaaS company.

[schoolsin]

Re: New Pricing

As I told Rick privately, I support him in that it's ultimately up to Miva to do what they feel is best for their business and I'm not going to come down on them for making decisions like this even if I wouldn't do the same in their shoes. I feel as if Miva, like a lot of platforms in the space, was underpriced. However, I believe they need to be careful not to ignore the market and solely price based upon what they feel the product should be worth to a company.

Unfortunately for smaller merchants, Miva has grown past them. It's not right or wrong. It's just data. There are many platforms out there that will continue to offer a manageable solution for $50/month. And frankly, anyone looking to pay that probably don't have the need for the configuration power that Miva offers. Any company that is utilizing one of the new Ready Themes can easily get rolling on Shopify, BigCommerce, Volusion and the like. All that said, I believe this new pricing is an overreach. It assumes that their software is good enough to replace other pieces and their relative assigned budgets. I don't believe they are there yet and don't ever anticipate them to be the dominating part of a company's "ecommerce business life" even at these new price points. The problem is that by the time they invest in developing an accounting package, an analytical package, a CRM, an email marketing solution, a warehouse management system, an inventory management system, etc, they will need to move past even these new prices. Platforms like Websphere and Hybris are massively expensive systems and still don't do everything. If Miva has their eye on that space, that's fine. But they need to understand most of their customers will not follow them.

As far as being the center of a company's ecommerce business life, many of us "large small businesses" or "small medium size businesses" cannot use Miva in it's standard form for a lot of the things we do. We use Monsoon Stone Edge for order management and inventory management. Monsoon Stone Edge doesn't even do everything we need so we supplement it with a warehouse management system from Barcoders and an analytics reporting system called Communique. We then use Quickbooks for accounting. Mailchimp costs us real money because we have a large contact list. We use Spring Metrics for customized offers and SearchSpring for a search that actually can add value to the shopping experience. Thank God Google Analytics is free. The problem is that even though a company like ours could probably afford $1500/month if Miva replaced all of those services and packages, by the time it does all that they will most likely make the case they need to charge $5000/month.

Personally, I would break up the Miva offering into modules and charge for them individually. In my business, it's impossible to sell a $400 spa cover by only offering a $400 spa cover. You have to allow customers to make the value judgment on an add-on and decide if they really need it. In my research of other platforms (I won't name names here), I found a cool recurring purchase add-on for a platform. It was $99/month or almost a 100% add-on cost to their highest non-enterprise plan. And I'd definitely consider it because we could really use that functionality for chemicals and filters. I see the Miva platform as being able to be split into the following segments:

- Shopping Cart (catalog, cart, checkout, account management, order history)
- Order Processing and Shipment Label Printing
- Accounting System Export Integration
- Marketplace Integration (eBay, Amazon, etc)
- Advanced Marketing (coupons, gift certs, upsales)
- API Access
- Multi-Storefront / Same Backend
- Support Levels
- Server and Bandwidth Usage and Storage
- Advanced Features sold on an individual basis
> Social Login
> Single Sign-On (blogs, forums, Kayako, etc)
> Points Programs
> Advanced Shipping Rules
> Product Feed Generation
> Abandoned Cart Marketing

They should give customers the option to plug into their platforms as needed. Attach a price to it that makes you profitable. The issue I have is forcing their clients to buy all the functionality while at the same time charging above market rates. I also have an issue with a company basing their pricing on how well I run my business or more specifically how quickly I grow my top-line revenue. No business is the same. It is quite conceivable for a $500k/year business to gross $400k while a totally different $2M/year business may only gross $100k. Top-line revenue is not an indicator of profitability and hence ability to pay. At the end of the day, how well we do shouldn't affect Miva's budget. I don't believe they should set their budget based on the sales of their client's businesses. They should evaluate the market and charge a price they need to cover their expenses, make a profit and stay competitive with their peers.

As I told Rick, I love Miva and have always enjoyed the relationship. I feel like I've had a front-row seat like many people in this forum to see the current management bring this platform back from the brink of extinction. But I think they are miscalculating here. There aren't many $1M/year businesses that will pay $18000 a year when they are evaluating packages that cost 1/10th of that. I know I'll draw the ire of some on this board when I say this, but I don't see a problem with Miva moving past the $50/month segment because it's overserved and doesn't really offer the revenue needed to grow the platform. Though I feel it's high for the low end of the revenue scale, I really don't even have an issue with $250/month for a business using Miva for most functions of daily ecommerce life. But an all or nothing offering that starts at $750/month (IMHO most businesses that really need to budget for other systems to compliment Miva's offering most likely have $500k+/year in sales) just isn't market competitive right now. If other platforms either raise their price or go out of business, maybe we can start to think about that conversation. I just think as a business that puts a lot of thought into how our business runs that I'd rather be nickel and dimed as long as I can choose which nickels and which dimes.

Though we definitely can afford more than we pay than the $140ish we pay now, we're staring at a 10x increase in cost. It is difficult to actually say it, but without a significant modification or change of direction we will be forced to start looking to see what else is out there.

Well said. We took the per seat license in stride. We actually have close to 10 people in Miva during the day and I paid the extra fees realizing it would benefit my business. Our fees will go from $6,600 a year to $17,940 a year. While we have grown significantly since we first started, our margins haven't and our advertising tax (Google/Bing/Amazon) has only gone up. I would have been able to swallow a 10/20% increase per year, but this is bordering on crazy. I honestly don't know what we're going to do at this point.

[craftduo]

Re: New Pricing

First off, I've been with Hostasaurus and Miva for well over ten years. Excellent uptime and customer service overall. I have been asked by my clients to help them choose and migrate to a different platform. Moving clients will be very difficult (less than 30 days now) and dangerous (change of URL's) as the holidays quickly approach.

Idea! How about Feb 1st as a deadline and the beginning of the new aggressive pricing structure. This would give MIVA developers ample time as some of us need to migrate and/or dissolve multiple websites.

Rick and David, I am willing to part ways, but would appreciate a more amenable timeline. Although I am a longtime supporter (10+ yrs), I feel all of your customers, new or old, should get the same courtesy.

Thank you for considering my idea.

[Pamela Hazelton]

Re: New Pricing

I had planned to avoid commenting on this thread altogether, and I will avoid getting into the discussion of the price increase. I do, however, want to mention a few things to those who are planning to jump ship. I post here, because it really is part of the conversation.

Over the past three years I have researched a plethora of other shopping carts. Three clients moved to other carts.

Here is what I learned, and I share it so you'll be sure to look for these things in your own research:

1. Many ecommerce hosts are no longer hosting email. So you may have to enlist a third-party service (like Google Apps for Business) for email account management.

2. The bulk of the carts I researched, as well as the ones the clients move to, only provide the cart. Some will allow you to install WordPress, but they charge additional for the database (one charged an additional $45/month).

3. Some are now charging per month for SSL rather than a one-time competitive fee for the certificate. In the past, hosts didn't make money of SSL certs (if they did, it was a miniscule cost designed to offset the cost of charging your card and installation). One particular shopping cart charges $20/month for the cert - which cost them $59. This shows that they are making money on additional things you must have. If you bring your own cert, there's a sizable install fee.

4. A-la-carte is popular. It's popular with both services and features. It sounds fair because you only pay for what you need... until you find out that one small thing you really need is packaged in with that other bigger thing you don't.

5. Many other hosted carts have limitations that don't make sense. One, for example, won't allow you to use PNG files for product images. Another won't let you upload files larger than 1 mb (sounds like a good deterrent from people uploading print ready images for products, but some stores may need to include larger files - like PDFs and the like). Some of these guys want to re-invent the web, and that's not ideal at all.

6. Three of the carts I demoed do not give FTP access. Instead you use a custom-built control panel that's entirely web-based. That can be a nightmare for stores serving up lots of images. It's also a nightmare when you can't segment images into folders to prevent overstuffing folders and causing server and page load issues.

7. While many allow for bulk import, I ran into a few that do not let you designate product images in the import. I was forced to name all product images by the sku (a good practice, but if that's not how the data comes in, who wants to rename thousands of images?), and use the backend to "sync" images to products.

The three clients that had moved, within six months, moved back. Two of them had to have things somewhat rebuilt because the cart they'd moved to gave me limited export capabilities. Even though that particular cart ran on MySQL, the restrictions of their software didn't allow me to easy export product-category associations. So I had to work with database tables to realign the content. That may not sound like a big deal, but as new marketing and selling services emerge, you want to be able to quickly build feeds and provide data files to those outlets, and if you have to manually massage data, or store data differently in another platform, it can be a time suck.

I'm not saying there aren't any solutions out there for those who want to leave. I just want to give you a heads up that reading all the fine print is very key. So is reading a slew of reviews and talking to store owners on those carts. When I found that one of the branded carts a client was on was behind on security and broke compliancy, I asked the vendor how they checked to ensure partners were running the latest, stable releases. I was told that it was up to each partner and they don't police them. That's a scary situation.

[Rick Wilson]

Re: New Pricing

Craftduo and Schoolsin,

Please contact me off forum via email.

As for your idea Craftduo,

The problem with that is we don't get the info we need to price properly. What you're suggesting would create the worst of both worlds, some people leaving while we miss the feedback the urgency is providing (we didn't plan it this way as a feedback mechanism but is working out in practice).

I know this thread has become long and it's easy to miss many of the posts, so the solution we have in place is to grandfather our very small merchants (frankly we made a mistake on that) and manually review anyone who asks to make sure we're on the same page.

We are not taking a hard line on this but we're reviewing things on a case by case for most merchants.

[JFancett]

Re: New Pricing

Switching to the practical side of all this: Which sales number will be used for tier assignment? Gross revenues or net captured sales? How will cancelled or refunded orders affect things?

Thanks in advance.

[mdurkee]

Re: New Pricing

As it was said before, I am also not interested in beating a dead horse. One of the biggest problems with the announcement is the less than 30 day notice that we received and right before the holidays. We are a small company of 4 people and only one of us works in the area of the online store. It is a big gulp to try and digest the over 30% increase we face in hosting costs. It is an even bigger gulp to try and chance a major move right before the time of year when we could actually make some profit (holiday 2015).


We would like to just ask for the courtesy of having an extension of time to prepare for either parting ways or adjusting to the more aggressive pricing structure.

[Rick Wilson]

Re: New Pricing

Maxanne,

Do you mind emailing me off forum? You'll get lost in the noise here.

[Rick Wilson]

Re: New Pricing

Which sales number will be used for tier assignment? Gross revenues or net captured sales? How will cancelled or refunded orders affect things?

Net captured sales minus cancels and refunds.

[Rick Wilson]

Re: New Pricing

For housekeeping reasons I'm going to close this post (it'll remain up for posterity).

I've started a new one (that can be commented on) here: http://extranet.miva.com/forums/show...388#post437388