E-commerce platform Bigcommerce has announced a new pricing structure, which will see some customers facing massive price hikes — and some BC users are not happy.
Late last year, e-commerce platform Bigcommerce quietly announced a new pricing model, which it started rolling out to users in January. The announcement was made via a statement by new CEO Brent Bellm over the company’s private forum.
The announcement caused consternation among many Bigcommerce (BC) users, with many long-term customers reporting outrageous price increases. Together with the price hikes, former and existing BC users have reported appalling customer service, a lack of pricing transparency, severe censoring of forum discussions, and the feeling that the company is actively looking to shed unprofitable users.
At least one user commenting on Whirlpool’s forum has warned others that BC “is not afraid to shut down stores” as a result of forum and social media activity that is critical of the company, its board and the new policies.
One source has also accused the company of price gouging ahead of the company’s proposed IPO in 2016.
Details about the new pricing structure and BC’s treatment of customers have largely gone under the radar for a few reasons. Firstly, the pricing changes were quietly announced through the company’s user-only forum, which requires a user login to view. Secondly, BC appears to have provided little information in response to users’ queries for further explanation and detail regarding the new pricing structures. Thirdly, BC has reportedly been censoring its internal forum to remove some of the more critical posts. Finally, and most troubling, many current BC users have been unwilling to voice their frustration because of concerns that it will affect their businesses.
To find out more, Power Retail contacted several BC users for comment. Some were unwilling to speak for fear of damage to their businesses, with one source stating “they [BC] can kill my shops if they feel like it.”
However, one BC user did agree to go on record about the price changes and the ensuing furore. This source, known as Jay, requested that we not use his real name as his business still relies on the BC platform, although he is in the process of moving to another platform.
Jay has been a Bigcommerce customer since 2011.
“Bigcommerce has been a good platform for the price we were paying, and if they had implemented a reasonable increase we would have accepted that. However, tripling our monthly fees without giving us a single thing in return is not acceptable,” he told Power Retail.
Changes to pricing
Before turning to the user concerns, it’s worth letting BC explain the rationale behind the changes to its pricing structure.
A BC spokesperson told Power Retail: “After several months in development and receiving valuable feedback from hundreds of merchants and partners, Bigcommerce is moving to a new pricing model that aligns merchant success with our success. The new model, in which pricing is set based on a trailing-12-month order count or online sales volume, allows us to provide plans and pricing that automatically adjusts as merchants grow, so that all merchants receive the features and service appropriate for their size.
“It’s also worth nothing that, as part of these changes, roughly 80 percent of Bigcommerce merchants will see no change, or a decrease, in their monthly fee. Also, transaction fees have been eliminated for all plan types.”
According to the a CEO statement originally posted on the company forum, the changes to the pricing structure are because “historical Bigcommerce plans had no mechanism to adjust for merchant growth.
“As a result, some small clients that started on Bigcommerce’s standard $30 per month plan are now filling tens of thousands of orders per month.
“Bigcommerce loses a lot of money serving these merchants because the pure cost of page loads, server calls, and customer service dwarfs the monthly fees collected,” the company stated.
“Some of our most successful merchants cost us tens of thousands of dollars per year to serve.
“The fixed nature of all current contracts means that every merchant becomes less profitable to Bigcommerce as it becomes more successful, and the most successful are subsidised by the least.”
(The full CEO statements are available on the Flying Solo forum.)
“The pricing change appears to be a response to a problem with the prior business model, in which it was attempted to upsell ‘value-added’ features,” one user stated on the company forum. “The enhanced features are of little to no real (dollar) value, yet are the justification for the mammoth price increase.”
While the new pricing structure has outraged many users, it’s not so much the price hikes as the way they have been communicated (or in many cases, not communicated) that has really raised the ire of users.
Since announcing the pricing restructure, BC has faced a deluge of negative feedback on its internal forum, which has spilled over to external forums like Whirlpool and Flying Solo, as well as onto social media.
Reports of price increases faced by individual users have varied from between 200 to 500 percent per month, to as much as 4,000 percent.
“Our company specifically is facing a price increase of 220 percent per month,” Jay told Power Retail, “and I’ve seen others who are facing 2,000 to 4,000 percent increases.
“These increases only come with promises of new features, but nothing that they will actually discuss with us besides new templates and being able to sell on Pinterest and Facebook (which most other companies aren’t even interested in).”
When disgruntled clients took to the company forum to vent their outrage, moderators reportedly began deleting posts that were critical of the company and the new pricing structure.
“I have been very active on the [Bigcommerce] forum for the past month, trying to discuss the new changes,” said Jay.
“No exaggeration, 100 percent of the posts by non-Bigcommerce employees are complaints about the changes. All BC keeps doing is telling us that these changes will ‘enable us to scale and be successful’, without giving us specific details about new features.
“I have seen quite a few posts deleted from the BC forum though, specifically when they call into question the new CEO (Brent Bellm) and when people had suggested that users contact the board to express dissatisfaction.”
Jay has since been blocked from the BC user forum for posts critical of the pricing increases, the censorship on the company forum and the failure to respond to client feedback.
Furthermore, BC has reportedly deleted two threads (each with over 700 posts) from its internal forum. A company representative stated that this was done to “streamline the conversation in order to avoid confusing merchants with discussions about previous iterations and outdated information” and so that people wouldn’t have to sift through mountains of information to find pricing help.
Other users have reported forum posts being deleted that discuss specific dollar figures, suggesting that price transparency is not a high priority for the company.
Regarding rumours that BC was willing to shut down users’ stores based on social media and forum activity, Jay was unable to verify this but did confirm that he heard those rumours from people across various forums.
The company has seemingly done little to extend the olive branch to users most affected by the pricing increases. Despite claims of “a fair and transparent pricing model”, BC seems to have been less than forthcoming with details regarding the changes to the pricing structure. Many users have tried contacting the company to discuss the changes and get further information, seemingly without much luck.
Some users have reported extreme difficulty in trying to contact the company, getting no response to emails, facing long hold times on the phone, and then being told by customer service representatives that they can only pass messages on to management.
According to Jay, “BC tell people to call in, but everyone on the forum who has attempted to call either couldn’t get through, or was told they would be contacted by a manager, and then they never heard from anyone.”
One user apparently tried for more than a week to reach a BC representative who was empowered to discuss pricing without any success. Another stated that BC customer service representatives justified the price increases by outlining new features that would become available, many of which the user already had or simply didn’t need. One user, on being unable to reach a customer service representative over the phone frustratedly pointed out that ‘24/7 support’ was one of the features being used to justify the price increases.
So, why the changes?
Based on the new pricing structure and the swathes of feedback from disgruntled customers, it appears that BC is looking to shed its mid-size to large clients to focus on higher profit margin users, and to push the company’s new Enterprise package.
In October, AFR reported that BC CEO Brent Bellm is retargeting larger customers and prioritising profitability ahead of an IPO in 2016.
“I 100% believe they are price gouging in hopes of losing a large percentage of the clients who aren’t making them enough money,” said Jay.
“I think Brent [Bellm] wants to focus on enterprise customers, which will be generating the most profit. This is understandable; however, crippling all other customers is harsh, and bad business.”
Customers facing the new pricing structure are left with two choices: swallow the price increase and continue to use the BC platform, or look to migrate to a new e-commerce platform. For some users, the latter choice may not be viable due to the often significant switching costs associated with changing platforms. As one user put it: “If we treated our customers like we’re now being treated (demanding an overnight doubling or tripling of payment), our business would collapse. There are no switching costs in our category, so our customers would abandon us. Thus, we’re concerned that BC, for its long-term viability, is relying on the fact that its customers have high switching costs.”
However, despite the costs associated with switching platforms, many frustrated BC users are looking to new providers.
“We have been a BC customer since 2011,” said Jay, “and I am now in the process of learning the Magento platform so we can abandon ship.”
If you’re a Bigcommerce user, please share your experience (good or bad) in the comments below.