Mailchimp is one of the earliest internet businesses still operating today. It was found in 2001 a full three years before even Facebook during the period of the dot com bubble. Unlike a lot of its contemporary businesses that when bust Mailchimp is still here today and the key to its success has been focusing on its primary service and implement a tried and test revenue model.
Mailchimp is basically a bulk email marketing service provider and lets users build beautiful emails with embed pictures and videos, similar to a template website and send the same email to multiple people at the same time and has some very clever tools and marketing features one of which is the ability to integrate mail chimp with your website so customers can subscribe to your email list and receive your next email without you having to add them.
Its pricing feature was based on the freemium model where users would be able to sign up and use the service for free until their subscribers reach 2000 at which point they could upgrade to a paid service. This freeimum model is tried and tested and is used successfully by many online companies.
However, recently Mailchimp has upgraded itself from an email marketing company to a fully fledged CRM (customer relations manager). Whilst this upgrade may seem like a good idea it if it left its core service and payment model the same, the company decided to change everything. This has led to extreme criticism this week when it became clear how its new marketing services would impact its core email offering — particularly in terms of pricing.
Mailchimp claims these changes are driven by customer demand but that is difficult to believe.
These changes included entirely new pricing tiers and policies, and a revamping of associated feature sets, with some pretty radical differences. Mailchimp’s emails weren’t clear on what was changing or who was affected, Help pages weren’t updated properly, and Support was giving out conflicting information.
When the dust settled, it wasn’t pretty.
The biggest change of all is that Mailchimp no longer determines monthly charges based on total subscriber count — as has historically been the case, and as is standard among email services. Instead, Mailchimp now bases monthly charges on a new metric which it calls Audiences, which some users may have noticed appearing in their accounts recently.
Key here is that Audiences also includes unsubscribed emails, meaning that users will be charged for unsubscribed emails as well as subscribed ones. Naturally, this announcement was received very negatively by Mailchimp users, as some would be facing increases of over 100% in their monthly charges.
In addition those who are paid customers under the Pay As You Go system — where users pay per send rather than per month, something which was very popular with users who emailed more sporadically then regularly (for example, if you only used your list to announce new releases) — will be severely affected. Anyone who has purchased before 15 May will expire in one year — despite Mailchimp previously stating that these credits will never expire. Mailchimp is explicit about not offering any cash refunds for purchased credits, but it seems Mailchimp will convert email credits into dollar credits towards a Monthly plan. However, anyone converting to a monthly plan, even if they do it right away will be subjected to the new pricing regime, with no option to be grandfathered in under the old system.
There are more horrible changes that Mailchimp has made that these include: charging users by audience, limiting audiences ie mailing lists to only three per standard user, charging for unsubscribed users, excluding automation tools for new users.
This isn't the first time that the company has attracted criticism for its changes to its core service. In 2016 the company merged with Mandrill and gave customers 60 days notice to switch to the new pricing structure or find an alternative service platform. Similarly that change was met with widespread criticism and customer outrage due to the new pricing structure requiring customers to pay twice for the same service.