Sustainability for WordPress themes is needed
It's been long enough since WooThemes updated their pricing. So things have all calmed down. And I've even seen several WordPress companies jump on the bandwagon and announce that their pricing for plugins was moving to a yearly support model. So everything is great, right?
Almost.
See I think we're going to see one more wave of frustration when theme developers realize what plugins developers have realized. But before I get into it, let me step sideways for a second.
A tale of two table saws
If you head over to Home Depot and look for table saws, you'll likely find the Rigid 15-amp 10 inch portable table saw. If you do your research, you'll see that it's also received a ton of positive reviews. And it's cheaper than many of its competitors. You know what closes the deal for a lot of folks? You can guess, right?
A lifetime warranty. Yes – you can get parts replaced after they get worn down from regular usage for free. Forever.
Oh, that's a deal closer all right. Until you read this comment…
“I've had this saw for a few months and the soft start feature no longer works… Both [repair] shops mentioned that they would no longer be doing business with RIDGID for much longer. The saw is well built and I was lured in with the lifetime warranty but what good is it when no one will honor it.”
Now there's a second table saw worth checking out over at Home Depot. It's the DeWalt, also 10 inch and 15-amp portable table saw. It costs more. It sports a 90 day money back, no questions asked, return policy.
It also will cover, for 1 year, parts that wear out in the normal course of wear and tear. And lastly, it's warranty is only for three years.
I tried to find the rating from someone frustrated with this saw, and particular with their customer service, but everything was 5 stars.
Saws for two market segments
Why did I waste your valuable time telling you about two different saws? Simple – because they provide a simple way for us to look at another space and make observations without getting our hackles up as we talk about the space we all appreciate and love.
Table saws are interesting things. They are really useful for two different kinds of folks (segments, if you will). They are great for the person at home that likes to work on personal projects and wants a table saw. They are also great for a construction professional who takes it out in the field and using it to earn a living.
But make no mistake, these two segments have wildly different needs. A professional makes an investment in the tool and expects it to deliver top notch value, over and over. They don't need a lot of help – they're professionals, after all. Supporting them isn't a lot of work. But the product needs to be rock solid.
A DIY hobbyist is different than a professional. They won't use the tool nearly as much. But they may have tons of questions up front and end up hurting themselves if they don't know what they're doing. They need a rich and substantial support infrastructure.
Supporting two segments is tough. Especially when they're so different. But companies like DeWalt have been doing it for years.
Themes with unlimited everything
If you think about WordPress themes, they face a similar segment challenge as table saws. They can be bought by users who want to use them on their own site, once, and may not know much about how to use a theme. Or they could be purchased by a professional, likely to need less support, but in need of a high quality product that they want to use multiple times to earn a living.
The challenge, of course, is that if you have a single approach for everyone, you'll need to do some difficult pricing work to make sure you don't end up losing your shirt.
If, like some companies, every support request costs you around $5, pricing a theme at $40 can be problematic if the purchaser can install it 50 times. If even 10 of those sites (only 20%) end up with a single support request each, you'll find yourself facing some tough choices.
When you serve two segments with a single model, your best bet is to have different prices. But you can't always do that – I get it.
So if you are going to work with a single model, make sure you've done some serious modeling to make sure you're not penalizing one segment for the sins of another.
Now, I know, some people will tell you to just make really awesome themes and so many people will buy them that you won't have to worry. They'll point to individuals doing it and highlight the success they're having.
But my recommendation is to always make sure every single one of your transactions is profitable. And that means no Ponzi schemes.
It likely means you have to put some boundaries around your licensing terms, and quit this “unlimited” stuff.
What about StudioPress?
Some of you will point to theme companies like StudioPress (which I use on this site) and highlight that their doing it successfully, so everyone should be able to do it.
They do offer unlimited theme licensing. But in their case, I don't have an issue with it. Wonder why? Let's look at their model for just a second (and I'm doing this as an outsider – I know no details of their actual business).
First, their framework with a single child theme is priced at a premium level. So they're doing that right. It's not a $40 theme like you often see on Themeforest.
Second, their pricing has a natural segmentation break. One price for the single user (often $80) and another for the professional ($350).
Third, they're part of the CopyBlogger family. So when you make a purchase, you're then (over time, and very professionally) offered products that have recurring revenue pricing (Scribe, Synthesis, Authority).
I can't overestimate how important it is to have diversified revenue streams if you're going to step into the unlimited, pay one-time product space. It provides the overall company enough revenue to make strategic investments across their product lines.
So, if you want to model yourself after StudioPress – go for it. We need more companies like it in our space.
But if you're model is just themes, please don't borrow someone else's pricing strategy without understanding their business model.
How does DeWalt do it?
If you didn't know it, DeWalt has been around for a long time. And one of the things they're most well known for is their R&D. These are folks that consistently invest in their products.
In the mid-90's they were the first to roll out a 14.4 volt cordless drill. Ten years later, they were able to roll out anti-vibration technology that reduced vibrations by 50% on some of their hammers.
Do you know how a company can continue to invest in R&D like that? How they can continue to stay in a market, leading via fantastic products?
They do research, interact with customers, test and try new things, add new features and bring new products to market. All of which costs money.
And that's money that they have to take from their overall sales and revenue and move it towards new product development or product reinvestment rather than support.
And that means putting some some realistic constraints around their promises of support.
They provide a three-part structure for support:
- 90 day money-back, no questions asked, guarantee of your satisfaction
- 1 year of free support and service
- 3 years of limited parts warranty
Do you see what they've done? They've aligned their support with their segments. The 90-day money-back guarantee is for everyone.
But look at the other two parts of their support license. The DIY person who needs help is limited to a single year. The professional, who is more worried about product upkeep has support for three years.
A model for theme developers?
Doesn't that look like a model that could work for theme developers?
I know some people would suggest limiting the number of sites a theme license is good for – but that puts a negative incentive on the professional (to put your product out there less).
I don't think that's the kind of alignment anyone wants. Plus, enough changes in three years with WordPress that putting a natural breaking point there makes sense to me.
So a time-limited license makes more sense to me.
If it were me, working on a model for theme developers, I would break it up like this:
- 90 day money-back, no questions asked return policy
- 1 year of support
- 3 years of theme updates
That's my take. But I want to hear yours. Tell me down below…