What happens when a company with over 170million loyal customers who love their products suddenly decides to increase their prices by over 400%? You would think that by now companies would have seen too many examples of internet outrage and they would not tempt fate by engaging in outrageous behavior. But they don’t and Canva learned this lesson recently when it surprised, shocked, and angered its big and very loyal customer base by suddenly announcing a 400% price increase. Why did they do this and what happened? I’ll talk about it in this week’s podcast.
How many of you use Canva? I do and it is an essential component of my business. Canva and I have a great relationship, and I have become a very proficient Canva user since early 2015, when I first discovered it and joined its community. I quickly started paying for my account because I believe in paying for software and services that I use in my business, even when there is a free option. I have worked in the tech industry for many years and I know how much time, effort, and money it takes to run the back end systems.
When I started with Canva, the user fee was $12.95 a month, a bargain. I then graduated to an annual subscription for $119.95, still a bargain.
I just renewed my professional Canva subscription last month for the same price, $119.95, which I consider to be a bargain. Even after 10 years my membership cost is less than the cost of high end design software that I don’t want to have to spend years learning. Canva offers a significantly less technically and financially painful alternative.
I had no idea that Canva was raising its annual pricing for the professional account holders until I read about it a few days ago. Raising its prices is an understatement. Canva was quadrupling the cost of the annual membership from $119.95 to $500.
I quickly checked my billing to make sure that I had not paid that much for my recent renewal and I had not so I am not sure when they were going to implement this change for its long time users, who should be grandfathered in to any price increase. Especially people like me, who have been loyal, paying customers for more than 10 years.
Of course Canva received considerable backlash from its customer base about this ill-conceived price increase and rightly so. It is a sign of how out of touch Canva has gotten with its user base. That happens when a startup becomes a major industry player, going from no revenues to over $2.5 billion in annual revenues with more than 170 million active monthly users. A few months ago Canva ran a promotion that showcased its image count and celebrated one billion images. Those are very impressive numbers.
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