Where Patreon went wrong with their pricing change

You may have seen that Patreon recently announced a change to their pricing model, only to pull the plug after a huge backlash from their community.

So much was the uproar that even before pulling the plug Patreon were forced to issue an in-depth explanation to their announcement, like the chef trying to reason with the customer whose meal has left a sour taste in their mouth. In many ways the damage has been done.

As an outsider I can see both sides here. From Patreon’s perspective, this was an attempt to simplify things and exposing the realities of the Patron → Patronee transaction. After all, the fees are there and are being paid for by Patrons whether the Patrons realise it or not. From the Patron’s perspective though, their $5 pledge would now become $5.50, with none of those extra 50 cents going to the creator. Bummer.

A big part of the problem was that the fees were moving from a deduction from the pledge, to an addition. This effectively meant that, should Patrons not change anything, they would now pay more. You can see why folks are upset.

Loss aversion is strong, and the Patreon community are all about enabling Indie Creators to make money from their work. Any move that is perceived as corporate money grabbing will undoubtedly go down poorly with this group.

This move was an attempt to appease the Creators over the Patrons. Both sides saw an element of upside but the driving force here was the unhappiness of a portion of Creators.

Patreon showed this discontent by sharing a snapshot of their NPS (Net Promoter Score) results. In the past month their NPS score was -50 for those that mentioned fees. That means for anyone who sees fees as a top of mind issue when thinking of the likelihood to recommend Patreon, the vast majority would in fact dissuade others from using the service. On the surface, you can understand why Patreon took this issue so seriously.

But the context is key here. I doubt many people would mention fees in a favourable light, so the score is naturally going to be massively skewed to negative results. What would be far more insightful is the percentage of respondents who cited fees as a main reason for their score. Without this data it’s hard to form a strong opinion.

All data has to be interpreted, and NPS is no different. It provides signals that highlight problem areas as well as areas where your product is strong. But the data alone won’t ensure a positive solution.

The real benefits of NPS is the “heads up” it gives you on individual users thoughts and the ability to track user happiness at a high level over time. The magic of product is taking that data, interpreting it and continually improving, which in turn will be reflected in the NPS score. And thus the cycle continues.

Jack Conte, Co-founder of Patreon put it rather bluntly:

“People are not machines. And we have to respect that.”

For Patreon, the damage has been done, both to itself and to its Creators. I’m sure this has been a brutal lesson for the folks at Patreon HQ. It sure would be interesting to see how Patreon’s NPS score (for both Creators and Patrons) changes over the months to come.

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