Let’s face it. No one likes a price increase… At the pump, coffee shop, supermarket, or restaurant. But increases are often necessary to align business objectives with changing market conditions in order to survive.
Raising prices is always an uncomfortable process to implement and communicate. While an increase often stings, communicating it clearly to customers and using simple language can significantly reduce the near-term “swelling.”
Earlier this month, fitness app and social network Strava announced a price increase of upwards of 50 percent for their monthly and annual service plans. While the increase appeared steep, it is important to note that Strava did not raise prices for 10 years. During this span, many new features and functionality were added and enjoyed by nearly 100 million users.
This post is not to debate whether a 50 percent increase is warranted. Instead, it zeroes in on how Strava poorly communicated the impending price hike, which created an uproar among its vast endurance athlete community.
While Strava announced the increase through email and the app store, there was no uniformity and consistency in delivering the message. Some received an email. Others were notified via the app store. Moreover, certain subscribers received different rate increases, which added to the confusion when friends began to “compare notes” with each other.
According to several media reports, pricing for some Strava subscribers nearly doubled, while others received increases of 33 or 67 percent. Complicating matters, the price increase differs for monthly or annual memberships. Adding to the confusion, subscribers who were notified did not see any details in their Strava account, and will not until the new rate goes into effect in February (or next billing renewal date).
In an announcement, Strava said that “price changes will vary depending on region and preferred platform.” However, they did not share specific details, and based on articles from The Verge, Canadian Cycling Magazine, Yahoo!, and BikePerfect, many subscribers are puzzled, scratching their head.
The confusion was so great that blogger DC Rainmaker did his own digging and developed a chart to make sense of the price disparities, something Strava failed to do.
In The Verge article, Strava spokesperson Brian Bell was cryptic on the communication and justification of the rollout. “There are a lot of learnings here, but we chose to do it this way for very specific reasons. We thought it was best for our business.”
While price increases are unpopular, the key is developing a play book and communications timeline to provide adequate notice and reminders, utilizing multiple channels. It is imperative to deliver messages consistently (across channels) to everyone involved, and create content such as FAQs, bulletins displayed during login (and inside the app), blog posts, and videos to further explain the details.
Considering the media coverage, there are many unhappy Strava subscribers, and it seems the frustration stems from the inconsistent and unclear communications more than the actual price increase.
Those that find value in Strava will likely stay; but how this situation was handled will provide an opening for other apps to offer an alternative. Only time will tell.
I am looking forward to seeing how this plays out once the price increase kicks in next month.
