Existing customers will flee as quickly as they can, and new customers will look elsewhere. In reality, they'll never charge more than their public rate card, and that rate card has to be competitive with the competition.
The easy way around that is by "grandfathering" people who are already paying what you thought they should pay for your service/product; then charging people who have never seen your service before the new price.
Does that last point include grandfathering in existing users on cheaper plans? If I'm an existing user, I'll be annoyed if my bill goes up, especially if it's a really big jump. But if prices go down, everyone is happy. If you start high, how big of a problem is it to go down? How much of my objection is just because I'm spoiled by the internet and haven't run a business?
They've presumably decided that raising rates further would cost more customers than it would be worth. Stupid tricks like cutting down on the "standard" package and rolling those things into upgrades is a common way for companies to raise rates without appearing to, therefore losing fewer customers.
This sort of practice is very common. That's why companies dont automatically convert old customers to new plans/services when they introduce a new service. They can (and do) keep charging existing customers the old rate.
Echoes of Comcast ... the NYT is constantly promoting 50% off the posted rates for new subscribers, without ever offering such terms to existing customers. But if you're a "frustrated" long-time customer who's on the verge of canceling, then suddenly the 50% discount is rolled out.
In most other industries, loyal customers get better treatment. Or it's the same deal for everyone. These sorts of inverted pricing structures may squeeze more revenue out of a few long-term, inattentive customers, but the hidden cost in churn, irritation and haggling is considerable.
If there's one thing you can count on 'disruptors' to not understand, it's grandfather clauses. You raise your rate for all new 'customers' and your overhead rate stops looking like a line going toward infinity.
Your reward for being at Google for 5 years should be that you get the rate plan from 2 years ago when your first kid was old enough for daycare.
My reward for being a Netflix customer for 6 years should have been that I still got the old rate.
If you increase services then increase prices, users are often fine with it. What sucks is when something gradually reduces services, then cuts headcount, then asks for more money. That's when everyone finds alternatives.
they didn't really promise that they would never raise prices, they promised that if they did, they would cover your last bill (which people are also having a hard time for them to fulfill).
Yes, it's really weird, and I think they're going to lose a lot of customers who have the same first impression as you, that they'll have to bump up to the too-expensive plan because they're a small amount over the limit on the cheaper plan.
I'd feel better about this if they gave a discount (even a modest one) to everyone who isn't hitting the cap. Then it would feel like the plan was designed to be redistributive, not punitive. They'd get some additional revenue from high-usage customers and give up some revenue from their other customers.
Instead it feels like a heads-I-win-tails-nothing-changes situation.
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