Thoughts on WordPress Pricing Models

In recent months there's been quite a bit of discussion surrounding the pricing of WordPress premium plugins. It all started with a post from Chris Lema. He suggested that WordPress plugin prices are too low. He followed that up with another post about pricing plugins by value. Both are essential readers for all plugin developers. The first post drew a huge number of comments, many of which are also very eye-opening.

In recent months there’s been quite a bit of discussion surrounding the pricing of WordPress premium plugins.

It all started with a post from Chris Lema. He suggested that WordPress plugin prices are too low. He followed that up with another post about pricing plugins by value. Both are essential readers for all plugin developers. The first post drew a huge number of comments, many of which are also very eye-opening.

In response to the posts from Chris Lema, other bloggers and developers shared their thoughts. Jeff from WP Tavern opinionated that WordPress consultants (who usually buy the ‘developer’ option) should pay much more than users when buying strains of a plugin.

We also got two very interesting inputs into the discussion from Phil Derksen, one of which was a direct response to Chris Lema’s post, and the second of which was a report on the results of an experiment in which he increased 21% by increasing his plugin pricing.

David Peralty, an employee at Gravity Forms, also chimed in with his thoughts on plugin pricing.

In April here on WP Mayor we also discussed the most expensive WordPress plugins on the market, and it was an eye opener for the great range of prices that exists.

What are you paying for?

When considering plugin pricing, you must also consider usage restrictions as well as the support plan included when purchasing the plugin.

Some plugins give you lifetime support, while others limit you to one year or even less, after which you’d need to renew your license (often at a discounted rate) for updates and support.

Usage restrictions also apply for many premium plugins.

Easy Digital Downloads, for example, operates on a three tier pricing method for its add-ons. The three pricing tiers relate directly to usage restrictions. The lowest price is for a single use license, then there is a higher price (roughly double) for usage on 2-5 sites, and an unlimited usage price (roughly triple the single use price).

Gravity Forms has three tier pricing as well, but the pricing is not only partly related to the usage restriction. With their Personal ($39) pack you get the core plugin and usage for one site. With the Business ($99) pack you get the core plus basic add-ons, and the ability to use the plugin on up to three sites. Finally with the Developer ($199) pack you get the core plus basic and advanced add-ons. This Developer version can be used on an unlimited number of sites. With all three options you get one year of support and updates.

iThemes again have three tier pricing, but the difference is that their Personal plan gives you a license for two sites not one, the Business and Developer plans are quite mainstream, with 10 and unlimited respectively.

As mentioned, when renewing a license many plugins give generous discounts. In the case of Gravity Forms for example, you have 25% off for Personal License holders, and 50% off for Business or Development license holders. So, in your second year of holding a Developer license, it is $99.50 versus $199 and you still gain access to all of the same features, support and new add-ons as they release them.

Support and Updates

With regards to support and updates, I definitely think that giving lifetime support and updates with a plugin is unsustainable. The period of 1 year makes the most sense. Lifetime updates could be possible, but definitely not lifetime support. The cost of supporting an ever increasing user base without corresponding increases in revenue would ultimately kill the business.

I’ve seen plugins, such as AuthorhReview, which offer 6 months of support and updates to their customers. I think the 6 months period is a bit too short, it’s much easier for customers to keep track of things over a 1 year period.

Tied to this argument, some users ask why they should pay every year for a plugin when they don’t need the new features. This is a valid argument, the only reason why they would need to update is for security reasons, rather than for new features. In most probability, they wouldn’t even need to make use of their license for support purposes. These security-conscious users feel practically forced to keep paying for product updates just for the security aspect.

To counter this argument some plugin developers offer lifetime updates and separate that aspect from support, for which the user would need to buy a ‘support pack’. Paid Memberships Pro uses such a system, the core plugin is free (thus you have lifetime updates) but you have to pay for support. Soliloquy operates on a similar basis, while the plugin itself is not free, the developer offers lifetime updates. For support, the users buy support tokens.

Lifetime licenses can make sense in the launch stage for a plugin. This system was used very successfully by Gravity Forms. When they launched, for a limited time period they offered lifetime support and updates to those who signed up, thus they gathered a lot of momentum and cash that further fuelled the project and established them as the leading forms plugin for WordPress.

Plugin Business Models

If you’d like to know about the different business models for WordPress plugins, I suggest reading this post by Phil Derksen, I couldn’t have said it better myself.

What we can take out from this whole discussion is that the WordPress eco system is in a flourishing stage where all developers who offer solid plugins are sure to make a decent income. That doesn’t mean that there isn’t any optimization to be done on the business models. So I suggest that all plugin developers make some time to study about pricing and marketing, amongst other things, because there are many aspects of being successful with a premium plugin.

Unlimited Licenses

Many plugin developers offer an unlimited license for their plugin. This means that you pay once and can use the plugin on as many sites as you wish. That’s great for web developers however I’m not sure about the sustainability of it. Personally I’d limit the developer license since unlimited can turn out to be unsustainable in the long run, although it’s a nice thing marketing wise. We’ve seen some plugins go for a limited developer license, like SearchWP and more recently WP DB Migrate Pro, who started out with unlimited and then capped it at 100 sites, here’s their announcement.

Unlimited

In addition to updating the price, the Developer license is now limited to 100 installs. If you already have a Developer license, your license will remain unlimited until your renewal date. If you login to My Account, it should still say “unlimited” under your license.

Why no more unlimited? I’ll admit, as a customer, unlimited is very nice. No worries about hitting a limit. But this is not sustainable for our business. The more a customer uses our product and support service, the more of our resources are dedicated to that customer, and the more value the customer receives. It is only fair that the price rises with use.

I know some customers may be upset by this and if you are one of them, please reply and let me know your thoughts. If you welcome our move to maintain a sustainable business, we could use your words of encouragement as well!

In the hosting industry unlimited is bandied around but in reality the packages are never unlimited, there are some internal limits and if you cross the line with your account usage you will be notified and possibly have your account terminated if you don’t comply with a ‘fair usage policy’. I’d rather be told upfront what I can do exactly with my license, so I agree with having limited developer licenses.

What are your thoughts on plugin pricing?

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Jean Galea
Jean Galea
Jean Galea is a WordPress developer, entrepreneur and padel player. He is the founder of WP Mayor, the plugins WP RSS Aggregator and EDD Bookings, as well as the Mastermind.fm podcast. His personal blog can be found at jeangalea.com.

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22 Responses

  1. Thank you for including my little article. I have been enjoying the conversation surrounding pricing and hope that it continues. As much as companies like rocketgenius have been around for going on four years, pricing models in WordPress are still new, and the community has changed a great deal over the last half a decade. It is very exciting times in the WordPress world and lots of experimentation is happening.

    1. Welcome David, I definitely agree that there’s still much that can be said and done in this area. Luckily we now have more bloggers who talk about the business aspects of WordPress. The number one example is Chris Lema I think, and Matt Madeiros from the Matt Report also likes to look into business aspects in his podcasts.

  2. Thanks for the detailed post Jean and thanks for mentioning my posts on the subject.

    The type of support offered for premium plugins definitely drives the price, but the value and complexity of the plugin makes for a wide price range as well.

    For example, here are 2 plugins both at 2 different ends of the pricing spectrum:

    http://fooplugins.com/plugins/socialwiggle-pro/ (currently $6 to $26)

    http://crowdfavorite.com/wordpress/ramp/ (currently $249 to $999)

  3. I think the Soliloquy business model is one of the top ones.

    It’s very well thought out, having a free core, then two premium variants(operating in very similar to Gravity forms packages). Moreover the burden of support is addressed through having to buy support tokens. Finally there are also premium add-ons which can be bought, although this is perhaps the only aspect that is not so polished in this model. Since the Developer license includes add-ons I think some users are still finding it difficult to differentiate between the so-called Basic Add-ons and Premium Add-ons.

    The fact that updates are provided for life also means that users don’t feel they are forced to keep renewing just to make sure they are not leaving any potential security holes in their site.

    1. @Jean I think that Soliloguy offer could be improved, in my opinion user needs to know exactly how much is he paying and what he will get in return, this is not the case here, the support-token-product is very vague, even information how much additional support tokens cost is nowhere to be found, it is also hard to determine upfront how many support tickets will user need to open.

  4. I’m always a fan of freemium models, but they’re tough to pull off. Charging for a more robust feature set works when done well. For instance, the free version of Seedprod’s Coming Soon Ultimate works great, and I happily upgraded to the PRO version to add the email signup functionality with Mailchimp. Freemium models let your customers build a relationship with you and your product which builds trust.

    That being said, freemium models usually work best when users pay for more quantity of the same features or allow more use of current features, rather than adding new features ie Dropbox. I’ve used products where I have no interest in upgrading to the paid version because the functionality I want is in the free one.

    1. I agree Ben. I would say using the Freemium model works well when you’re only having 2 or maximum 3 different levels of functionality in your plugin. As you say, it’s preferable if you’re paying for more quantity of core features rather than new features. As an example, an email newsletter plugin might allow you 1,000 subscribers in the free version as a limit, but an unlimited number in the Pro version.

      When you create a plugin that can be extended in many ways and even in very different directions then I’d say core + premium add-ons works best.

  5. Such a timely post. We’ve just finished changing our business model (and pricing) around for ThirstyAffiliates.

    We used to offer 3 tiers based on feature sets augmented from the base plugin via add-ons.

    The new model takes inspiration from the likes of WooCommerce in that we have made the core plugin free and will be supplying “upgrades” by allowing people to buy bolt-on add-on plugins that add key features.

    So far the change has been very positive and I’m much more excited with the near unlimited ability to add features to my plugin without being encumbered by the old pricing model. In short, it was too restrictive and stunted the growth of the plugin.

    I like the “pay for support” idea and appreciate your comments on the various support models people are doing in the community, it makes sense for buyers and authors to have people pay for support access, it’s a non-scalable activity.

    Currently I’m pretty liberal with support though. Officially add-on buyers get 12 months of free email support while ThirstyAffiliates core plugin users can report bugs and whatnot to me via email and the support forums on WP.org. The free users aren’t treated with priority (it’s more when I get to it) unlike the paying customers who get my help and attention straight away.

    I do kind of pride myself on A1 customer support though and it’s something that I think many plugin owners don’t get right. It does wonders for growth and sales because people talk and it almost becomes like a feature of becoming a customer.

    Really enjoying where these discussions on pricing and business models are going in the community lately. It’s making us all think more about the “business” behind the pricing model. Great post Jean.

    1. Thanks for your input Josh, if I remember well your previous model was similar to the Gravity Forms model, am I correct? If so, maybe you can elaborate on why it was restricting you, I’m sure such insight will be useful for other developers facing the dilemma on which model to go for.

      You could have also kept the core plugin itself premium. What made you put it on the WordPress.org repository?

      As regards to support, being liberal with support during early stages is great for everyone, but thinking ahead if the plugin’s popularity explodes you’re going to have to make a proper plan, and this is why I really like Thomas’ approach with Soliloquy.

  6. Hey Jean, thanks for your post. Our team over at WPUniversity has been struggling with this question for a few months now.

    Here are the questions we asked to help us determine our model:

    What do we charge for? Is it a license to use our plugin or access features / content? Or maybe we only charge for support?

    Whom do we charge? Are End-Users customers or are they just users? Professionals and Developers expect and need more so do we only charge them?

    How do we ensure our own scalability while providing maximum value to our Customers
    (while still serving our Users http://chrislema.com/customers-and-users/)?

    I can’t say we have all the answers yet but we did settle on a launch model that we think will provide us maximum exposure and our users and customers the highest value. More on that, if anyone’s interested, next week when we announce.

    I’ll close by saying that as a startup following the Lean Model we’ve made quite a few pivots and changes, large and small, over the past few months. We are yet to see any one definitive answer to the question / problem of pricing but we are really excited to finally see it being discussed in the open. Thank you to all the experts that have made this an issue. Without this kind of dialogue, awesome software we all rely on may disappear.

  7. Lifetime updates could be possible, but definitely not lifetime support.

    Renewal for updates is like saying “save money by running an old version.” There is one part of the WordPress community encouraging users to keep WordPress, plugins and themes up-to-date for security reasons while another part is essentially telling users it’s okay to run outdated plugins.

  8. I generally don’t like the word “Lifetime”. Who’s lifetime? Mine? The life of the software?

    To your point though Steven, I partially agree. I don’t think dev’s are encouraging users NOT to update, just the opposite actually. However if a developer of a plugin that I use for multiple clients, such as Gravity Forms, goes out of business because we only pay once and they can’t scale, well that would cause a helluva mess for us all.

    Ideally developers would push micro-updates for security fixes and minor compatibility issues to everyone while major updates (like Windows 7 to 8 for example) should only be pushed if your account is paid to date. Of course, that requires additional resources on behalf of the developer and it’s just easier to say “No pay, no updates”.

    1. “Lifetime” really is a lousy, gimmicky term because to some its seems to promise more than what’s actually possible. Most users will know it means the life of the product, though. Nonetheless, I prefer “updates are always free” or something to that effect. Just plain English.

      Micro updates and major updates would be great but difficult to implement. “No pay, no updates” is easier, for sure, but pricing the product higher up front is easy too. I’m coming from a theme background though. People switch themes down the road which means they buy again later. With something like a form plugin, it’s hard to imagine the user switching. Obviously Gravity Forms’ model is working. David Peralty wrote something that really struck me:

      It is likely easier to get 12,000 subscription customers than 70,000 one-time customers”

      It’s just hard for me to reconcile the mixed message regular users might be getting on updates. Of course, if the renewal request states the importance of staying up to date and the user ignores it by not paying, they really are on their own.

      1. On side note: As we have this discussion I am renewing my annual subscription to Slide Deck 2. Why? because not only do I love their support, but their updates are often meaningful and the added features are worth it. It’s also only $75/yr to keep the subscription live. Just some food for thought.

        1. All would be well in a world where every customer is as appreciative and informed as you. A personal user might be passing on renewal at this moment. Now possibly thinking it’s fine to run outdated plugins, he might not care so much about keeping his WordPress.org plugins up to date. Several months later he gets hacked and wonders why.

          Purely conjecture, of course. 😉 And obviously not SlideDeck’s responsibility.

          I’m not suggesting that developers who don’t provide free updates are evil, just pointing out that there may be some adverse effects. I can’t think of any other way to establish a substantial recurring revenue stream for a commercial plugin though (themes, yes — hosting; plugins, no).

  9. One other thought relating to theme pricing. Many commercial plugins are priced based on the number of sites, which makes perfect sense. In the theme world, I could only find one full GPL theme shop that prices based on number of sites (are there more?). The idea of providing the same thing to a user of one site as a user of 10 sites is nuts. It means the small fries are subsidizing the big guys.

    I think theme shops have been very inspired by each other’s pricing models. I also think all that full GPL theme hoopla has encouraged the exclusion anything “per site” in pricing. But you can do per site with full GPL themes: a) Ask the user to pay per site b) Deliver updates for only one site c) Provide support for only one site. I think this is a reasonable model.

    1. It’s probably related to the fact that plugins are more adapt to being used on a couple of sites, rather than themes. If I’m running 20 sites, I’m likely to have plugins like WordPress SEO, Gravity Forms etc running on all of them, but only maybe 2/3 sites will be running the same theme.

  10. As a consultant who routinely buys 20+ plugins a month, I can tell you that they’re almost all underpriced. Developers should be charging significantly more, without question.

    Not to single out any one plugin but WPTouch Pro can strip a week off a development, and adds a host of features that I couldn’t duplicate without significant effort .. for $49 (with updates and support). *** I can’t bring a date to a movie for less than $50 ***, yet I can buy a plugin that’ll increase my billables, decrease my workload, optimize my client experience, and deliver a great experience for that.

    So yes, I buy the developer licenses for better support but I also end up licensing for individual sites because these developers are saving me work, delivering an amazing product, and doing a ton of heavy lifting for me and my clients.

    1. It’s definitely great for plugin developers to have customers like you, but I’m pretty sure you’re in the minority. Raising prices will make a plugin inaccessible for some users, so understandably developers are very hesitant to raise their prices, especially when there is strong competition.

      Say there are 3 plugins doing more or less the same thing and priced within $20 of each other, being the developer of one of those plugins I wouldn’t go and raise the plugin’s price by $50. Would you have any suggestions in such cases?

  11. Thanks for including Paid Memberships Pro in this roundup. I think we represent an interesting business model (free code, paid support/etc) that others could use. I posted steps to reproduce our business model on our blog a while ago, which might be useful: http://www.paidmembershipspro.com/2013/02/the-paid-memberships-pro-business-model-copy-it/

    One point: You say “I definitely think that giving lifetime support and updates with a plugin is unsustainable.” I agree that lifetime support is unsustainable, since you can’t tell how much support someone will need in their “lifetime”. But lifetime updates doesn’t have a per-user cost. If you are making the updates, it doesn’t cost anything (maybe a bit of bandwidth) for one more user to download your update.

    On the other hand, if you aren’t charging for updates, it is harder to get renewals on annual plans/etc. (Most of our support users are good to go after we clear up whatever issue prompted them to sign up for support.) Extra revenue from renewals would be nice and I suppose help to “sustain” our business. We just need to make sure that our pricing on other products makes up for this… or we will need to figure out other reasons for people to renew.

    I love these discussions. Thanks for keeping them going. There really is no one right answer for everyone. Hearing how others have been successful or not and the thinking behind different decisions is useful for people trying to figure out pricing and business models for their own products.

    1. Welcome Jason and thanks for participating in the discussion. I agree with your points and I also think you make another important observation, that there really is no one right answer for everyone. The more experience I get in the plugin ecosystem, the more this rings true. So to all plugin developers out there, avoid the blanket statement advice but rather take a look at the models of 5-10 successful plugins, and then see which mix applies best for you.

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