How to Raise Subscription Prices With Colin Devroe
Download MP3Pete Ericson (00:07)
Okay. So one of our customers, a business journal in Youngstown, Ohio, raised their price from $25 to $99 a year. And nobody canceled. today's guest has seen the inside of more than three million subscriptions. And he's gonna tell you why you're probably charging too little, right?
Colin Devroe (00:33)
Yeah, most of the time that's what I see.
Pete Ericson (00:36)
Awesome. Hey, welcome Colin. with Colin Devroe. He he's the co-founder of Good Migrations. I want to sing that. And then head of AI at NerdPress. So you've seen a lot and welcome. Glad to have you here. Yeah, of course. All right. So you've just for if you're listening to this, Colin and our team have have worked together for a few years at least, moving
Colin Devroe (00:51)
Thank you. Thank you for having me, Pete. Nice to be here.
Pete Ericson (01:06)
Stripe accounts, increasing pricing, and essentially bringing publishers from an old price level and generally a mess of pricing, I suspect, into sort of a cleaner and raised pricing situation. so what we're gonna talk about here is sort of the the why to raise pricing, the fear about raising pricing, some gotchas, how to do it.
And we may even stray into a little bit of AI discussion. How's that sound? I don't think I don't think any podcast alive today that's B2B is not talking about AI.
Colin Devroe (01:45)
Yeah. I think it's we kinda have to. It's like you have to know.
Pete Ericson (01:48)
Yeah. it's it's amazing. All right. So before we jump in to the specifics, so you've been on the web a long time, I think twenty-five years according to a bio. and so how did Yeah, yeah. Well, I think I'm a little ahead of you. so how did you how did you land on good migrations? How'd you get into raising prices in Stripe? That's very niche.
Colin Devroe (02:00)
Thank you for the reminder that I'm getting older, Pete.
Yeah, it is a niche. And it was over ten years ago now that I had a client that needed me to do this for them. I th actually they they had to move from one country to another, their business and Stripe does not allow you to do that with the same account. and so I just had to figure out a way to do that and
When we moved the business over, of course you have to move all of the customers, you have to move the subscriptions, their payment methods and all of that. And I was like, Man, you know, I'm sure other people need to do something like this. So I actually open sourced the code that I wrote to do it because I believe if my memory's right, I was piggybacking off of a couple of little scripts that were out there that
someone else had written and put on GitHub or something. And so I was like, well, I'm gonna pay it forward and I'm just gonna open source this and put it on my blog. And I did that. And you know, a couple days later you get an email that says, Hey, I need this, but I have no idea how to run a you know a script to do this. Can you help me? And sure, I'll help you. And then I figure out some you know, they have every business that uses Stripe is very different. And so
Pete Ericson (03:25)
Right.
Mm.
Colin Devroe (03:35)
each time that I did it for the first few, let's call it year or something, I I was able to improve on the scripts and I kept releasing most of the updates out there into the world for nothing. But most people, even if you release some of these things, it's kinda like a recipe from a top chef on the food channel. They give the recipe away, but everybody still goes to their restaurant.
Pete Ericson (03:55)
Mm mm. Mm mm. Right. Yeah.
Colin Devroe (04:00)
Because they don't want to make it, or they can't make it, or they haven't mess mastered the techniques of the of the recipe. And so that's what happened in this case. And then eventually I just decided I'm getting enough phone calls here that I should probably put a website up. And so I did. And turns out, especially these days, with how fast businesses start, grow, and
Pete Ericson (04:16)
Mm, mm.
Colin Devroe (04:26)
And then be acquired, because if you are acquired, it the the same need arises with migrating your subscriptions. And then, you know, as membership sites the number of them grew and then the amount of time that they were online, inevitably, in a membership-based business, you will need to increase your prices. And so
Pete Ericson (04:32)
Right. Right. Right.
Mm. Mm.
Colin Devroe (04:50)
it turns out that the expertise that I had built in migrating accounts from one account to another, or from an acquirer to, or from a buyer to a from a seller to a buyer, or from a region of the world to another region of the world, all those skills that I had developed and the the scripts and different things that I had developed.
i it lends itself to doing price increases as well because some of the same tools are used, some of the same pitfalls are there. And so I just started offering price increases and then I believe you and I started talking about it because your team was, you know, getting this request quite a bit and so I I was helping the leaky paywall team as well.
Pete Ericson (05:19)
Mm.
Mm-hmm.
Yeah. Yep. Yeah. Yeah. That's good. I yeah, I it makes total sense. I mean, raising prices, moving subscriptions, there's a lot of fear involved. There's a lot of risk involved for for someone who has thousands of subscribers and they they want they they want to make sure that they're not just shooting themselves in the foot. So it makes makes absolute total sense. So kind of based on that, when you
When you get a first look inside an a new client's Stripe account, what do you see? Like what's what's the what's the mess? Is it a mess?
Colin Devroe (06:08)
Mm-hmm.
Yeah. It is. you know, there's a variety of reasons for that. and not all of them are the customer's fault, you know. Stripe's platform has changed over time. the features of that platform have changed over time. It's gotten much more complex today than it ever has been. and so for some of those reasons there's just age. Usually the the the older a Stripe account is, the more
Pete Ericson (06:21)
Mm.
Okay.
Yeah. Yeah.
Colin Devroe (06:41)
you know, stuff I find under the bed. and, you know, that's just the that's just the way that it goes. people have changed prices. They they may are trying to find product market fit and so they're adjusting how they package whatever they're selling and the so they you go in and they have, you know, I had one customer that had
Pete Ericson (06:46)
Right.
Colin Devroe (07:06)
you know, thousands and thousands of products and thousands and thousands of prices as they were trying. Maybe they were doing A B testing or whatever it may have been, but they just had subscriptions all over the place in in instead of having just one or two prices, let's say. I've had customers that had well over five million coupon codes.
Pete Ericson (07:29)
my lord.
Colin Devroe (07:30)
Yeah. And so there are there are lots of things that I've seen over the years. And then the other thing I would say is which is really important for the business owners to maybe hear, is understanding how your business works is really important if you want to sell your business. if you or or if you want to do something like a price increase. Because
Pete Ericson (07:50)
Yeah.
Colin Devroe (07:56)
the way that your company is structured, the way that you sell your product, the way that that works within your point of sale system, within leaky paywall, within Stripe, those are all things that if you understand them, you're able to make better decisions on how to do it, when to do it, and all of that. So I I urge people, I have a blog post on the on my site too, that talks about
understanding it but also about simplifying it if you can. The more simple yeah, under insights it should be there somewhere. but the more simple that you can make your setup, the easier it is to make some of these moves.
Pete Ericson (08:32)
Mm.
W which article is it here? Is it
Colin Devroe (08:38)
it might be need to move quickly. Is that what it is? Yep.
Pete Ericson (08:41)
This one. Okay. Cool.
Colin Devroe (08:45)
Yeah, see speed comes from like just knowing what what your setup is like. So I'll give you some examples. Like if your stripe is an absolute mess and you want to sell the business, or even do a price increase, it's going to be a lot more work than if it was very simple, simple to explain, simple to understand.
Pete Ericson (08:58)
Mm.
Colin Devroe (09:08)
so keeping things simple as you move forward is can can, you know, be good to your future self.
Pete Ericson (09:16)
Yeah. Yeah. there's a cost for complexity for sure. You don't get good data. You don't get good feedback on what's actually what products are actually working and what aren't. Yeah. Yeah. All right. Let's shift gears a little bit. I wanna talk about pricing a little bit and let's see how deep we can we can go with that. if you were and I'm talking publishers here, if you were like let's say a local news publisher and you were starting out
Colin Devroe (09:19)
Yeah.
Yeah, there's a lot of reasons. Yep.
Pete Ericson (09:46)
And you were setting up a paywall for the first time, what would you charge? How would you set that up? Is there anything that you've seen in all your migrations that sort of triggered something for you? Like, this is seems to be a trend or this is wrong, I would do it differently.
Colin Devroe (10:07)
Well, that's interesting. I mean I've seen everything from, you know, ninety-nine cents to hundreds of dollars, you know, for different subscriptions for the same thing. So I would say that, you know, most of the time my customers know their customer better than I do. so knowing your customer well, pricing in my opinion is a marketing and product packaging.
Pete Ericson (10:12)
Mm-hmm.
Mm.
Colin Devroe (10:33)
decision as much as it is a dis a business decision. because what you charge your customer actually communicates to your customer the value of what you're giving them. So you know knowing who your audience is, what they expect to pay for what you're providing
Pete Ericson (10:47)
Yeah, for sure.
Colin Devroe (10:58)
what your brand is. Is your brand a premium brand or is it a small town newspaper? Just get your daily news inexpensively brand. So all of those things come into play as far as how you would choose what your pricing models are. so that I think that you know, doing market research, understanding your customer if you're starting out, don't look at your peers so much as look at your customer more.
to understand what what you might be able to do pricing wise.
Pete Ericson (11:28)
Yeah. No, I think I think it is a marketing decision. Absolutely. It positions your product. You know, a cheap price can hurt you. and then of course a price that's just way too high will hurt you as well, obviously. what I what I tend to tell our publishers is think in buckets of pricing. So, you know, I'd say on the low end, you know, four ninety nine a month as far as US dollars go.
Colin Devroe (11:40)
Yeah.
Pete Ericson (11:54)
You said 99 cents, ⁓ for a subscription. I've seen 99 cents too. And it's bonkers because I think more than 50% of that is is literally taken by Stripe. And and and publishers, they don't know it. Like they they it's not on their radar, like, how much of this money am I actually keeping? Which is a little mind blowing to me. But $4.99 being kind of the lowest. And then the sort of the next bucket is $9.99 staying under the 10, then 19.99, then 29.
Colin Devroe (12:04)
yeah.
Pete Ericson (12:23)
Then 49, then 99. And it sort of kind of goes up from there. And I don't know if you see this, but I see a lot of subscriptions in the okay, we're charging seven, seven, nine, seven fifty or twelve ninety-nine, or sort of these price points that are in between the buckets. And what I find important is that a price is it's relative, it's got sort of gravity, right? Sort of a a
A $17 price tag and a $19 price tag emotionally sound the same, right? Like you're reacting. It's it's under 20 bucks, right? So and and we've seen pretty pretty good success with that. So I tell publishers if you're gonna if you're gonna raise a price, figure out which bucket you're in and go to the top part of that bucket. As that's like a, in my opinion, almost
It's not a no risk move, it is a very little risk move. So anyway.
Colin Devroe (13:23)
Yeah. Yeah, I think that I think that makes sense. I also have seen that, you know, if you it if your audience size is very large and you want to take a less risky s you know, price increase is to do it over time. because get your customers used to the price changing. if you're going to be in business for twenty years.
Pete Ericson (13:41)
Mm.
Colin Devroe (13:51)
You shouldn't only raise your price once. because then you do risk like your customers wondering why the price increase or even acknowledging that they for you know that they're paying this for this subscription. So making price increases a regular thing that you do. And I I don't mean that it has to happen every quarter, but it could happen once a year, and it doesn't have to be dramatic.
Pete Ericson (13:55)
Right.
Mm.
Colin Devroe (14:19)
And that way and that's why I've seen some prices that maybe are in between what your buckets would be. Is because someone just, you know, you take a million subscribers and you bump them three dollars, well, you just did pretty well. so there's a there's a lot of things that you can do in that when you're when you're in business for a while.
Pete Ericson (14:25)
Yeah.
Yeah, yeah.
Yeah, I think there's a balance point here. It's a really it's a really good point. And you I assume you get publishers that that have tell you like, I haven't raised prices for five years or more, right? And then it's like, we really need to do this. We're way out of line. so there's there's sort of that end. But then do you have
Colin Devroe (14:49)
yeah, exactly.
Pete Ericson (14:59)
Do you have customers that are that are doing annual increases pretty regularly? They c or every two years or some sort of a you do. Okay. How's how's that work for them?
Colin Devroe (15:06)
Yes.
It works pretty well. Sometimes they do one tier, sometimes they bring their bottom tier up a little bit because, you know, quite frankly, we live in an expensive world. And so, you know, I think I think four ninety nine is very cheap these days. because of how much everything is. I mean, everything is more money now. you know, unfortunately the online world
Pete Ericson (15:27)
Mm-hmm. huh.
Colin Devroe (15:39)
seems to start expensive and go to zero. It always has, right? Bandwidth, internet connection, AI prices. Everything starts expensive and then s you know slowly goes. And we we get we get upset when RAM prices for a new computer or when we go to buy a new MacBook, there it's more money now, because things are more expensive. So that think of that when you're price increasing with your own customer.
It's it's not so easy to go up as it is to go down in the future. So what what you choose to start at is kind of important. because going up going up from ninety-nine cents to anything is difficult. Going up from 999 is not as difficult. so it's it's it's interesting that way. Like I like I said, pricing is a is definitely an emotional and marketing exercise.
Pete Ericson (16:28)
That's it.
Yeah, no, that's that's that's really good what you just said. I think that publishers in general undervalue themselves and they can charge a lot more. our local newspaper and we have a digital only subscription. It's fifteen dollars. sorry. Fifteen dollars a month. And you might think, for a local digital only, that's a lot, but I mean the New York Times is at thirty bucks for their bundle now.
It's things things are going up. What I also thought was interesting is you mentioned tiering. Like if if you're going to raise prices like every year, you don't you don't do the whole, you don't cover everybody. Is that what you're getting at? Like you do certain segments?
Colin Devroe (17:19)
I've seen both. Again, it is really about knowing the customer. And and then how is your customer split across those tiers? What are your goals with the price increase? your goals with the price increase, you might think it's only revenue, but it's not always just revenue. You may want to actually
Pete Ericson (17:22)
Okay.
Mm.
Colin Devroe (17:40)
move customers from one tier to another and by adjusting the price of one you incentivize moving those customers not just to the price increase but literally to jump from one tier to another. and so you know if you if you let's say you you take a a traditional three-tiered model
Pete Ericson (17:50)
Mm.
Colin Devroe (18:02)
and the vast majority of your subscribers are on the f lowest tier, but you would prefer if everyone was in the middle, then then you could bump the just the lowest tier to make the upgrade to the middle tier be a no-brainer.
Pete Ericson (18:19)
Mm. Mm-hmm.
Colin Devroe (18:21)
and so there's a lot of things like that that or our goal your goal, yes, is of course revenue increase, but your goal may be I don't want to offer the lowest tier anymore or whatever it may be.
Pete Ericson (18:32)
Yeah, so that's a good one. Let's talk about monthly versus annual. the the pricing tiers and movement in pricing tiers is a really important concept because then I think most publishers don't really understand that. You're if somebody comes in on a monthly tier, whatever they're paying, the annual tier is gonna be less money generally, ten percent, maybe somewhere around there.
But the risk of churn actually goes down when folks hit the annual tier. It's more of a commitment. It's like, hey, monthly is like, I'm gonna try you out. Annual is like, yeah, I like you guys. So here, I'll save some money. And then it's like, and then that recurs over time. motivating somebody off a monthly tier seems counterintuitive, but yet it it does drop. I mean, the data supports it, it does drop.
your the risk of churn. So in the end, it's actually more income. And I guess if you had different products, then motivating, like let me give you another example. I love this so much. So we have some publishers that sort of have discovered family plans, right? So okay, it's let's call it $9.99 for an individual plan and then it's $13.99 and you get four seats or whatever with the family plan.
So what you just said, it's like, well, for a little bit more, I can get everybody in. And it doesn't cost the publisher anything to do that. And we just had a local publisher in Sweden turn literally turn this on in the first week. They got their first family plan. They're, you know, they're going bananas like, this is fantastic. So it's like free money, you know. but yeah, that's a that's a I I I like. So your suggestion is.
Colin Devroe (20:18)
Yeah.
Pete Ericson (20:24)
You're nudging you're just nudging your low tier up a bit, and then your middle tier and your upper tiers look more enticing, especially that middle tier.
Colin Devroe (20:33)
Yeah. And then with annual, I mean I would there's a there's a lot of reasons to go annual. you know, more more than you you already articul articulated a few, but I would default your pricing page to d annual.
Pete Ericson (20:40)
Mm.
Mm.
Colin Devroe (20:50)
Like people like to default it to monthly and then say you could save if you go annual. Default it to annual from the jump and don't hide it. Don't have it be where here you know, here's what the price would be if you pri like, no, make it the price of what it is annual. You pay processing fees on every charge to every card. So if you have one thousand customers and
Pete Ericson (21:12)
Mm. Mm.
Colin Devroe (21:17)
And you have 12 months in a year, you're going to charge 12,000 times and you're going to pay those processing fees 12,000 times. But if you have 1,000 customers that you only charge 1,000 times for even more revenue or even slightly less, you still make it up in all the processing fees that you would pay. So there's many, many reasons apart from just your churn rate being lower, which is good.
convenience for the the the customer, the customer not getting so many invoices. People have subscription fatigue these days. So there's a lot of reason to go annual. I would say lead with annual in most cases.
Pete Ericson (21:50)
Yeah. Yeah. Mm-hmm.
I love that. So I'll just p piggyback on that. we have some really good results with promoting an annual I'm sorry, promoting a a monthly subscription and that gives you three months of free access. So they're they're discounting time, right? And then at the three months, they then the monthly fee kicks in.
And then in small text underneath, it says, or buy an annual plan and save 17% more or something like that. Right. And what what and what's interesting, and and when we look at the the data behind these publishers that are doing this is they're actually selling more annual plans than they are monthly plans. So even though the monthly plan is the big ask and it says, hey, you're going to get three months free, which is like first dopamine hit, right? yeah.
Great, I'll get that. And then they but when you're on a simple subscription page, people tend to read every word on that page, right? Cause it's like money time, right? And then they get to the bottom and it's like, annual and it's see it's seventeen percent less than monthly. Second dopamine hit. That sounds good, right? Now you now you kind of got
Colin Devroe (23:13)
Yeah, maybe maybe your data, because you have more data than I do, maybe your data would disagree with me. But I would say that if you can't explain your pricing very easily to your customer, you're not doing it right.
Pete Ericson (23:26)
Yeah. It's true.
Colin Devroe (23:27)
You know, like if it's hard to describe well, if you choose this plan and it's a Sunday, you get you know, like you shouldn't be anywhere in that kind of realm where there's you know, a lot of a lot of difficulty to explain how your pricing is stacked up. Also, I would also say, and to the point that we were making earlier about marketing, having a free sign-up, even if it's just a trial for whether it's a week, a month or three months.
actually also is communicating to your customer that it it may not be as valuable. and there are there is a lot of data that now seems to suggest that charging from day one will actually give you much better customers anyway. you may not get as many signups. That's going to definitely be a different number. but
Pete Ericson (23:58)
Mm-hmm.
Colin Devroe (24:19)
if you look at your data over time you probably will see that people will stick around more and if what you're giving them is worth whatever it is that you're charging then they 100% will stick around. So yeah, you asking yourself whether or not you should have a a free sign up or a no credit card sign up or a trial, all of those things are decisions to make. Not not a it shouldn't be a a ploy or a mechanism.
Pete Ericson (24:29)
Yeah.
Colin Devroe (24:47)
It should be a marketing decision or a branding decision. Like, no, what we're selling you is worth this dollar amount. We don't need a trial. that kind of thing.
Pete Ericson (24:56)
Yeah. Yeah. Yeah. It does and it does this is a good discussion. It does boil down to audience too. So we have we have plenty of publishers that will set up a free registration which is just email and password. And that's the that's kind of the free trial, right? It's doesn't there's no money. it's just you register, you get access to a few more articles each month or something like that. That registration wall grows the email list.
Faster than any opt-in or pop-up you've ever imagined. I mean, it's like five X faster. It's just unbelievable. so we we're always preaching the registration wall approach. And then when it comes to checkout, we have plenty of publishers that have the the annual only plan and that's it. There's no monthly. that seems to show up when publishers are confident about their content, right?
but you you have we, you know, you have publishers that are just not as confident. I I've been I've been in meetings where they'll tell me flat out, look, we've been this ad we've run this ad-based, you know, like content model for a long time. We've been a volume player. Now all of a sudden we're going to subscriptions and we have to like ratchet up the quality of the content, right? And it's like, my God, like, wow, okay. That's a that's a concept, right? So they're they're sort of caught in the middle. And so again, it's
It's testing, right? Like you can start with a monthly, make sure you're upgrading, you know, you're you're you're motivating, like we talked earlier, those monthly readers to go annual, get them locked in. But for a publisher like that, I probably would start with a with a like a three free months. You're giving away time, you're not giving away money. So when the when the monthly kicks in, it's still the full monthly. But then your mission is to get those guys kicked up to to annual. And when it comes to like free trial where you have to drop a credit card in.
It does work pretty well. I mean, we're seeing like 70, 80 percent retention rate on those. they're yeah, they might, sure. Absolutely, they might have. Yeah, yeah. I'm not saying they wouldn't have, but yeah, for sure. so I I I'm always be confident, put the registration wall up. I know that's a scary thing for some publishers. Be confident, put the wall up, get people to require.
Colin Devroe (26:54)
Would they have signed up to begin with if there wasn't?
Pete Ericson (27:15)
People to drop off an email address because that email list is everything. Cause then that grows, grows the audience and paid subscriptions. And then and then.
Colin Devroe (27:23)
As long as pricing doesn't seem like a scheme, you know, I think if if people put so much energy into their pricing matrix, is if they put that same amount of energy into the quality of their content, the thing is gonna sell itself. So that's where our focus should be.
Pete Ericson (27:39)
Yeah. No, I it and print and print publishers and print publishers have a have a a whole you know a whole different ball of wax. Like if you go to let me go to
And Field magazine here. so here and then we go to like okay, let's hit subscribe. you know, there's they cleaned it up. that's great. They used to have 12 subscriptions on here, I kid you not, and then they cleaned it up to yep, they cleaned it up to six, and I mean they have they have print, they have digital, but they also have like this this track coach.
publication as well. So they've been skinning it down. So good stuff.
Colin Devroe (28:24)
Yeah, they're they're they're they they learned what we just talked about, more than likely. You know.
Pete Ericson (28:29)
Yeah, for sure. For sure. Okay. Awesome. so bottom line, yeah, charge the charge the annual, promote the annual. if you have to go monthly, because you're in test mode, motivate to annual. Get everybody in there. Okay. let's see. Let me hit my notes again real quick. So okay, let's talk a little bit about churn. When you take
Publishers through price increases, generally speaking, how much churn do you see? Do you get a chance to do you get eyeballs on that? Like how many folks drop out after the first month or so?
Colin Devroe (29:12)
Yeah, I'm not when I'm doing most of my work, I'm not analyz like they've already made their decision to do this usually by the time I'm talking to them personally. But I also run my own businesses and I see, you know, see what the trends are. And, you know, w we could talk also about who is churning, which is really important when you're making some decisions as well, if you have multiple tiers. But
Pete Ericson (29:22)
Mm, yeah.
Colin Devroe (29:42)
If your churn is it depends on what you're selling. Actually I I would be more interested to hear what your number would be, but I think if your churn is lower than seven percent, you're probably doing pretty good. Is my my gut yeah.
Pete Ericson (29:53)
Mm.
Yeah. Yeah, that it's a good number. Yep. Yep. That's a good number. Six six five four. Now you're getting really good. Yeah. I agree.
Colin Devroe (30:05)
Yeah, yep. so if but who is churning is is an interesting conversation to have in a business because it's very interesting that usually the higher paid tiers are not churning.
Pete Ericson (30:19)
Mm-hmm. It's true. Yeah.
Colin Devroe (30:20)
And so if you can s slide your pricing up, like I always ask people, what if you got rid of your lowest tier? You could keep those customers paying what they're paying, but just don't offer it anymore. What would happen to your business? Well, you'd have less churn, more people would sign up for the middle one because that looks like the lowest one now.
You know, that kind of thing. And I have seen businesses change substantially just by making that one change. And the churn the churn goes down, you know. so yeah, most of the time I would say in a business, the churn is at the lowest levels.
Pete Ericson (31:00)
That's very true. Yeah. It's easy to knock off a an inexpensive subscription. But if you if you made a commitment to pay that thirty I mean, we we pay the New York Times thirty dollars a month. And we started with news and then recipes was like the next thing, right? So finally we just were like, Hey, these recipes are good and we we we could use some new recipes and now they got us for thirty bucks. I think they raised their price recently. Are we going to
Are we gonna cancel? No. we're just, you know, the quality's there, the the the values there, we're active with it, right? And that's and the $30 affords the New York Times to be able to create that quality. So I agree absolutely. yeah, low pricing can can hurt you. Absolutely can hurt you. I see I see it, I see it over and over again. $2.99, $3.99.
my God, I'll tr okay, I'll go with four ninety-nine. And and the the you know, I'd say the number one thing that publishers can do is just, you know, hold your nose and jump in the water and be confident, right? Like make sure everything on your website screams confidence. Your the reporting, the the restrictions, the pricing, the email newsletter, everything is and that's there's a lot of work to be done for most.
Most smaller publishers, I would say.
Colin Devroe (32:32)
I mean, have do you talk a lot with your customers about customer acquisition costs and weighing that against what they're charging anyway? Because you know, if you have a lower tier that's at a small dollar amount and it costs you more to get that customer than they're paying you anyway, you know, that also should have have weigh in on the decision of whether or not you should be charging that little amount.
Pete Ericson (32:53)
Yeah. Yeah.
so the conversations now are it's interesting. It's the registration wall we talked about earlier, right? It's like that that is probably the number one move a publisher can do if they don't have a registration wall up, or if they do tighten it up. I've seen registration walls that are just way too generous, you know, like one article max. That's it, or zero if you want to start locking AI bots out. so that kind of takes care of that the free level and
Then it's okay. You you got your free trial. Like the fruit it doesn't cost any money. Now when it's actually time to pay, then yeah, annual is is the bet, right? And if it were me, I'd have three cards. I'd have the the annual subscription, I'd probably have like a little monthly link on the bottom or something like that for those that just can't stomach the annual. I'd have a family plan as the middle card, and I'd have give gift subscriptions as the third card. So it's basically your starting point is higher.
And then it's an upsell to family and then, upsell to giving gift subscriptions to someone else. That that would be my approach to pricing. But when it comes to like the low stuff, it's like
And it's still it's still a it's still a like a strategy conversation and a confidence conversation. It's like put that registration wall up, get rid of your pop ups, put the wall up, take the email address, build your list, you know. Like when I say five X, I mean like and like mentioned Mexico News Daily, right? They and this is information that he revealed on a podcast, it's like they went from half a million monthly visitors to one point four million monthly visitors. They're they're actually closing in on two.
million monthly visitors. And their email list is just shh, you know, and it's that registration wall. It's, it's, it's key. And now, well, so what's interesting off totally right, totally different rabbit hole, but like the whole con AI conversation, right? AI is is is pulling all the all the content into its database. Well, at some point these publishers have to make up their mind. It's like, when do you just turn put the lock on? Right. Whereas like
you can't get access. And so these conversations are starting, starting now for sure. And there are great the registration is this is the super tool to do it, right? Just zero g don't give the bots anything. Just lock it down. Email and password, sure. You get some limited access. You know, hard lock your best premium content. Like that, that's that's kind of the next conversation that's coming. I think whether publishers want it or not, it's it's happening.
All right. That was a rabbit hole.
Colin Devroe (35:42)
Well and and I and I you know, because I'm head of AI at NerdPress, which is a you know, we service thousands of large publishers. and they're battling this right now, learning, adjusting, testing, and we help them with that by either adding paywalls or
Pete Ericson (35:48)
Mm.
Colin Devroe (36:10)
And I mean paywalls for agents, not paywalls for humans. and you know, there's a lot of different a lot of different pieces to this and we're seeing where things are. I'm ten years ahead of everybody being head head of AI. My opinion may be different than what yours would be today, which is I think that content should be delivered through the agents for the customer, because that's where they're going to live. they're
Pete Ericson (36:13)
Mm, yeah.
Yeah.
For sure. Yeah.
Colin Devroe (36:38)
There they may not visit the web soon anymore. and so we need to adjust to that life where whatever the AI surface is, whether that's a chat bot, a news like self-service agent that's out there doing the work for you or summarizing your daily digest for the day or whatever it may be, and who knows what the future will be with glasses and everything else, you have to start thinking about how do I get those that my content
Pete Ericson (37:04)
Mm-hmm.
Colin Devroe (37:08)
to still be paid for, but to be delivered in a very unique and different way than it used to be. and so, yeah, I think these are these are the times to dig in and and learn what might work for your publication.
Pete Ericson (37:22)
Sounds like a whole other podcast, Colin. I will say that at this point, yes, if if if the small publisher wants to serve the agents and get a get a few pennies in the door, great, they can do that. And you know, they can just they can hook it up now, not not not too hard. But humans will pay a lot more than than the bots will. So at this point, you can you can set up the the paywall.
Colin Devroe (37:26)
I'm here for you if you need it.
See I'm not talking about the the learning models, the models learning. The
Pete Ericson (37:55)
Yeah, I understand. You're talking about them paying for access. Yeah.
Colin Devroe (37:59)
Yeah, and delivering the content through a connection to their publication.
Pete Ericson (38:04)
through a like an MCP server. Yeah, for sure. Yeah. Yeah. No, I get that. But I think in this window of time, it's yeah, setting up an MCP server, sure, you can do that. You're going to get a maybe a little bit of traction for and I'm talking about like mid market publishers that maybe they're magazine publishers, a regional news publisher, a bigger local publisher. They're they're the the the revenue right now still the stuff that's going to pay the bills is still the human, right?
Colin Devroe (38:05)
Exactly. Yep.
Pete Ericson (38:33)
So focus on getting that email while there's still time to do it, right? Like that's the priority. And then yes, set up, set up an MCP server, you know, start charging the bots for access. Start start that drip of revenue. Absolutely. And what's the future? Well, maybe, maybe it is the bot buying a subscription for the human, you know, and then delivering that in a in a nice way through the their their preferred AI interface.
Colin Devroe (38:38)
Mm-hmm.
Pete Ericson (39:04)
so yeah, I I I'm with ya. What I'm telling everybody right now is the window is closing and you gotta get those you gotta build your direct connection to your reader like yesterday, like now. Yeah. Yeah. Yeah.
Colin Devroe (39:14)
Yes. And and we've been saying this for years. Like if you go back ten years, what were we asking people to do? Build their direct relationship with their cust customer. Like I that has not changed. You know, when we were just, you know, reliant on page views that came only from Google, that is not a good business model.
Pete Ericson (39:27)
Mm, mm-hmm.
Nope.
Colin Devroe (39:40)
And so yeah, having a direct connection that you can engage with your customer. And f unfortunately, fortunately, I don't know which it is, but right now it's still email somehow. I don't know, it's stood the test of time, but that's the best way to do it.
Pete Ericson (39:55)
Yeah, we are we are creatures of habit and we don't take change very quickly. That's that's the bottom line.
Colin Devroe (40:00)
I'm surprised nothing has disrupted. there is way better ways to communicate than email, but nothing has disrupted it in the way that email is still an identity, it it it's linked to a person, it's how we get all of our password resets. Like it's it's very interesting.
Pete Ericson (40:11)
Mm-hmm. Mm-hmm. I think it's I think it's like it's like eBay, if you think about it. It's where the it's where the community lives. You know, you can say that eBay is clunky and it's a pain in the neck to list and buy and whatever, but it doesn't matter. It's the biggest network. So that's where you go. Email, it's the biggest network work of asynchronous communication, right? I want to send a message, but I don't need to bother someone right away. They can look at it later. It's email.
You know? So but yeah, it's the window's closing. email will probably be around for quite a while still. We'll see what happens. I mean, it's there's a lot of bonker stuff going on out there. We you know, I know you you're head of AI. We're literally living all we do is live in Claude pretty much these days. It's crazy, you know. And all right. Let's keep continuing. So what are speaking just a
Close off the AI conversation, which I was going to leave till last, but here we are. What are, you know, you you you guys deal with a lot of of food bloggers, right? what are they doing? Are they embracing AI? Are they building products for AI? Are they blocking AI? What's what's the what's the mood here for you know, the recipe sites where, you know, you all this this
Colin Devroe (41:13)
Okay.
Mm-hmm.
Pete Ericson (41:35)
all the recipes have been available for ingestion. So what what's what's their step?
Colin Devroe (41:41)
Yeah, I I think we have customers that are on every side of the spectrum of where they are comfortably, where they are ethic ethically and morally and other elise regarding AI. and I think, you know, for those that are embracing it, they're embracing it both as a publisher and then also as a as a person that produces content. So they're using they're using AI to
Pete Ericson (41:55)
Yeah, yeah.
Colin Devroe (42:11)
Help them with their job. as NerdPress, we're providing AI solutions to them to make their jobs easier. As a publisher, in any of your customers, whether they're in the food space or any other. There's a lot of work involved in creating content or publishing content that has nothing to do necessarily with the content.
Pete Ericson (42:20)
Yeah. Yeah.
Colin Devroe (42:34)
So when you publish a new page online, all of the things that you need to do, the other resources, the other pieces, the social parts of it, the the imagery, the meta tags, the whatever else that goes into it, there's a lot of mundane tasks that go into publishing online. and we help to make that very, very easy with AI. So you can take all the time that you took to do all those.
you know, third party things around the content, you now able to focus again on the content. So so there are the productivity gains of of AI. And then as a as a publisher from that perspective of like, well this is my content, we have people that are we have customers that are doing blocking it completely. We have clients that are
Pete Ericson (43:08)
Yeah.
Mm-hmm.
Colin Devroe (43:25)
allowing it through through like something like Cloudflare's play paywall, things like that. And then we have customers that think, well, it's already out there, let it all out there. and and join people where they're surfacing this stuff. So, you know, we used to publish everything to Pinterest because the way that people found recipes was Pinterest. So we would
Pete Ericson (43:30)
Yep, yep. Yep.
Colin Devroe (43:52)
Tailor our content and create resources specifically for Pinterest and then publish it to Pinterest in a in a edifiable way and then be found there and then the the referral would come. The same thing is true with AI tools. We may need to package our content in a specific way. We may need to create resources specific to AI w and when it's delivered there, make it palatable to that audience the way that it's being delivered to them. And it's changing over time.
Pete Ericson (44:05)
Mm.
Colin Devroe (44:24)
it was just chat bots for a while that would just show you the whole entire recipe with no sources. Thankfully now there's links to sources and things. And then also now with the bots like Grokbot or Muse or Claude Duet or Dots from OpenAI, those are very different experiences than just a chat bot. they're delivering full experiences. So you can have the recipe be
Pete Ericson (44:29)
Mm-hmm. Mm-hmm.
Colin Devroe (44:50)
a full step by step guide while you're cooking, you know, on put it on your iPad or something. So yeah, we have to learn all these things, adjust with them as they're improved on, and make our content be delivered there that's the best for our customer and ultimately then you can monetize that in some way.
Pete Ericson (44:53)
Mm.
Yeah, yeah. All right, tough question. So are there is there a move to subscriptions if if the if and is ad is ad revenue preservable in the AI future?
Colin Devroe (45:23)
Yes, for the largest publishers, you know, for small publishers, perhaps not that that model may not be the same as it was. I I can't predict where that will go 'cause I think that there are very smart people within Google that would like to see that continue. and so they'll probably gonna figure out a way to to make that happen. but I I don't know exactly how to predict that part of it. however, to your point earlier, having a direct relationship if you're a publisher that's just
Pete Ericson (45:39)
Mm.
Colin Devroe (45:53)
that doesn't have a paywall, but you're making your money on ad revenue and you might subsidize it with a subscription model somewhere. Like you have a few subscribers, you're kind of toying with it. getting them to be subscribers is definitely going to be your win there. getting them to be subscribed to your email, newsletter and getting them to pay you, those are the ways that you'll you'll, you know, kind of
you know, stave off the eventual ad revenue plummet that I'm sure is coming. I and I'm sure it'll will be an adjustment. It's just like anything. I remember when Google AdSense was
minting people all left and right as far as being wealthy from just publishing about fly fishing on their blog and having no, you know, th no quality concerns or whatever. Just the fact that you had a blog about fly fishing and the internet was only this big at the time. AdSense made people a lot of money really, really, really fast. And that bubble burst and then and then th other things replaced it over time. I think we'll see the same thing now with the way that ad revenue is with publishers on the web is that
Pete Ericson (46:36)
Mm-hmm.
Right.
Colin Devroe (47:02)
The best will stick around. the the people that are kinda hacking it may not, you know.
Pete Ericson (47:08)
Yeah, for sure. Yeah, that's an interesting thing to keep an eye on and and maybe we should discuss down the road. All right, let's get back to to price increases. That was a really good rabbit hole. And we did our AI duty for the podcast. Yeah, yeah, we can. That's we did we did. We did. Okay. next section. so stripe mechanics actually getting the job done.
Colin Devroe (47:24)
We can do hashtag AI on this now, you know, 'cause we talked about it.
Pete Ericson (47:37)
there's a move to using back to AI, into DIY, right? And I think you blogged about this a little bit. where does w what where does DIY go wrong in this situation? Is this something that that that publishers can do, will be able to do, or is this something that's just too it's just too hard a fall if you screw it up?
Colin Devroe (48:01)
Well, that's kind of it. It's yes. by the way, good migrations, the the company that I run for for these migrations and price increases, I would say forty percent of the customer leads that I get, I educate the customer and they do it on their own. I don't take on any customer that can do it on their own. but some
Pete Ericson (48:19)
Mm.
Mm.
Colin Devroe (48:28)
For the same reason that I said before, I was open sourcing my code in the beginning.
Pete Ericson (48:32)
Right. Yeah, you yeah, yeah. Yeah.
Colin Devroe (48:33)
Right. So so even people that I've told, there's only three buttons that you need to click and you can do this what you need to do, given their specific again, everyone's use case is so different. So if I have a customer that comes in and I see it's only three buttons for them to do it, I educate them and I'll take a screenshot and everything and say these are the three buttons you have to hit and you can do this, and they'll still say we want you to do this because they want someone to take ownership,
Pete Ericson (48:49)
Yeah.
Colin Devroe (48:58)
And to make sure that it goes smoothly. And so that's kind of why good migrations even still exist in the AI world. However, some people's Stripe setups are so complex that even with AI, I would not suggest to DIY. the common pitfalls that happen are you know, credibility with your customer as one. So you're making with your sp specific to price increases
Do you how are you communicating that with your customer needs to be very careful. you you may be working with your internal marketing department or or a third party, you know, marketer that you're work with or a PR firm or whoever's helping you with messaging to educate the customer on this move, to tell them afterwards when it happens. You don't want a random email that gets fired off to them by some third party like Stripe to let them know about this move.
Pete Ericson (49:43)
Mm.
Colin Devroe (49:56)
And so just knowing what to turn off, what notifications to turn off when you're doing these things, those things are very important. Because the the way that you tell your customer that you're doing a price increase is very important. It's probably it's way more important than the technical parts. the other pitfalls are, you know, they don't know what they don't know. And so when when someone doesn't know all the pieces to their publishing puzzle.
Pete Ericson (50:18)
Yeah.
Colin Devroe (50:25)
there may be more than one place that needs to be
adjusted than just in Stripe or just in leaky paywall or you know. So there's there may be other factors that they need to work on. And we our process, I guess you could say, kind of helps to illuminate all the things that that need to be corrected. So yeah, it comes down to like ownership, making someone's a steward of this. They have to be worried about their business. They don't need to be sitting here worried about how this is gonna go most of the time.
Pete Ericson (50:38)
Right.
Yeah. Yeah. You own the risk. It's sort of self-selective if they're complex and they know that they have a lot going on. They just don't want to wanna handle it. your point about communication is really, really well taken. I've seen some emails go out to subscribers saying, Hey, you know, prices have gone up and we need to raise our prices to match. And it's like, No, do not do that.
Colin Devroe (51:03)
Yeah. Yep.
Yeah. Yeah.
Pete Ericson (51:23)
The the the and I'm sure you know this. I mean, the right answer is y your prices are going up because you're gonna be able to deliver better value to that subscriber and you have to be very specific about what that value is. You know, the you know, you're hiring a staff member, you want to keep the quality report, you know, human reporting in the equation, right? There's there's there's a every publisher's a lot of good reasons to put
in that email. So it's always about gaining more if you're gonna gonna raise your numbers. I have one example which kind of blew my mind, but it works really well. so the there's a publisher, a n a local news publisher on the West Coast. And what they do, they do a lot of investigative journalism. So they're they're kind of the, you know, in charge of of flagging nonsense in their in their community. And it's a pretty, pretty big city, small city, I'd say.
Big community. And what they do is when there's when they run into some political or corporate nonsense that they need to investigate, they literally email their audience and say, hey, this is happening. This is what we know now. We need, we want to put a reporter on this and and get to the bottom of it. But we need 1,500 bucks to to to push this story out. Can you contribute? And my God, if it doesn't work every single time.
It's just amazing. Yeah. Amazing. So, you know, ten bucks here, twenty bucks here. Yeah. Totally crowdsourcing their journalism. But they also know their audience. They know their audience is like, we we like that you're reporting on the nonsense. Give us, you know, figure it out. We need we need to know how to vote, right? So anyway.
Colin Devroe (52:48)
I believe it. Yeah. Yeah, crowd crowdsource journalism.
Yeah, it's cool.
Yeah, yeah. Yeah, that's cool. Yeah, and if they're chasing the wrong thing, their audience isn't gonna pay for it and they can just drop it. It's good.
Pete Ericson (53:14)
That's right. Exactly. Exactly. They're not interested. Yeah. It's like a signal for sure. All right. Colin, I think we're running a little bit out of out of time. I have some more questions here, but I think we covered a lot of a lot of good stuff. So I know the screen's up, but where can people find you if they're interested in raising prices, moving subscriptions, all that good stuff?
Colin Devroe (53:17)
Yeah.
Go to leaky paywall. Pete Pete will call me if he needs me, you know. no, so again, I I I'm very busy and and and just just to maybe put this out there for your audience as well, because if you're scared to do this, everyone else is doing this also. And so don't fear it too much.
Pete Ericson (53:37)
If it that's the right answer. Yeah.
Colin Devroe (54:07)
You know, make sure you you you take it seriously and do it the right way, but that doesn't mean that you need to lead with fear. and if you have a good partner like myself or Pete, then then you'll be able to do it well and and everything will work out. so yeah, I'm pretty busy, so you know, just you know, I'm here to help you if you need it. I I want people to succeed at this. I've had many, many, many repeat customers over the ten years. Many.
Pete Ericson (54:32)
Yeah. Yeah.
Colin Devroe (54:33)
And and I wanna see everyone still be publishing ten years from now. So definitely just get in touch. It's good-migrations.com. But again, you can just contact Leaky Paywall and if they need me they'll they'll contact me.
Pete Ericson (54:38)
Absolutely.
Yeah, that sounds great. You and I are both in the business of keeping these publishers growing in this complicated world. Awesome. Thanks, Colin. Really great chatting with you. I love the deep dives. That was good stuff.
Colin Devroe (54:53)
Yeah.
Thanks.
Pete Ericson (55:01)
All right. Let me hit stop here.
