I remember when back in 2010, the first wave of WordPress developers embraced the GPL license. Some wanted to, some had to.
It was a heavily debated topic at the time, the pinnacle probably being the “showdown” between Chris Pearson (author of Thesis) and Matt Mullenweg (developer of WordPress).
For a recap of the events, you can read WordPress And Thesis Go To Battle. Mullenweg May Sue..
Why bring it up now?
Well, 2009-2010 were a bit different from what we have now.
Developers didn’t worry much about the increased cost of support and overhead expenses, mostly because they were not businessmen (yet).
Every theme purchase included promises of UNLIMITED support, updates, features, anything that would land a sale.
At that moment in time, the controversy around GPL sounded like an apocalyptic event. Many developers were reluctant to go full GPL, as it would allow the customers to freely distribute their themes. The developers were no longer able to impose usage restrictions, at least it got much more difficult to do so.
How would our business model handle such a change? How many sales will be lost? Nobody knew for certain.
However, early adopters of the GPL didn’t show signs of regret or lost revenue.
One of the arguments in favor of GPL was that developers should focus their efforts on charging for support, and not for the theme itself.
Once a theme is ready, it doesn’t cost you anything if 10 or 1000 people use it. But it does cost you different to provide support to 10 or 1000 users.
So the rationale was that it makes more sense to focus on charging for the actual time that we spend with each customer.
Slowly but surely GPL became a reality for the majority of us. If you are in this for the long haul, you can’t ignore the rules of the game.
Seriously, why bring it up now?
The way GPL was a hot topic in 2010, pricing will be (or at least should be) the hot topic for 2014-2015.
It is clear that in 2014 more and more developers will cut down on their promises. Unlimited pricing plans should go away, and the sooner they do, the better for all of us.
Many have switched to pricing plans that include only 6-12-18-24 months of updates and support. After that, the customer can either renew their purchase (with or without a discount), or buy a new theme altogether.
The next thing we should do is concentrate on the pricing itself.
A lot has changed since 2010, but the prices have mostly remained the same.
One can even say that certain individuals go as far as using a dumping pricing policy. $15, $20, $25 for a theme, that’s just ridiculous.
In their race for sales and glory, some developers end up by hurting the very industry that feeds them.
$200+ for a theme is ridiculous… right?
Let’s do some simple math:
10 x $50 = $500
2 x $200 = $400 (20% less)
Is it better to sell 10 copies for $50, instead of just 2 copies for $200. Not really.
From my experience, if increasing the price to 400% will cut your revenue by 20%, then it was a good decision. Why?
Because this 20% loss in revenue actually cuts down 80% of the time you spend on support. I will take this trade anytime.
And the reason is not because I dislike customer support, on the contrary.
When you get less support requests, you can provide a much better service, which should be a priority for all of us.
Think of the service you get at the end of the line at a crowded supermarket, and compare it with the service you get at a high-end clothing or jewelry store.
The Reality of a $200 Theme
When I first launched HermesThemes (in February 2013) I knew I had to apply non-traditional pricing.
The first thing I wanted to do was have a single pricing plan. The customer doesn’t want to analyze perks and features.
No time wasted on comparison, on talk about upgrading or downgrading a plan, no questions like “Is X included in plan Z?”.
Here’s the list of what you get and here’s the price you have to pay. Simple as that.
The truth is that a $200 price tag on a theme provides a lot of breathing room service-wise.
Some of the things that I do for the customers of HermesThemes:
- Install WordPress, the theme and the sample data on the customer’s website.
- Provide support via multiple channels: a support forum, email and even Skype.
- Provide basic customization assistance, as well as help with the implementation of different plugins.
As a result of this, many support questions are resolved in less than 20 minutes.
Happy customers? Heck yeah. Do they get a good impression of the WordPress community? I’m sure they do.
But wait… there is more!
To test the boundaries even further, in January 2014 I have launched my second niche theme-shop, AcademiaThemes, which the name might suggest, is aimed at the education sector.
AcademiaThemes has the same pricing policy as HermesThemes, but I want to test a new twist.
Every purchase comes with an optional 1 hour of free customization.
I have seen people paying up to $500 for simple styling and color changes that would take less than an hour to code, so why not add this passive value into the mix?
Time will tell if this approach will bring any benefits, but I’m very excited to see what comes out of it.
In summary: I believe that increasing theme prices will lead to more responsible and quality customer support.
The long term benefits of increased prices beat the short-term gains.
What do YOU think the real price is? What is the best way to calculate and apply it?
Your comments are welcome.