[adwf]

This is one of the hidden gems within the article:

"Selling to your existing customers is orders of magnitude easier than selling to new customers. We’ve never really strictly enforced the quotas differentiating our tiers from each other, so I had poor visibility into how many people were over quota, but it turns out that it is almost 10% of the user base. I built out capability in our billing system to upgrade a user’s account without forcing them to log in and initiate it themselves. Then I built a screen in our admin dashboard which shows all the accounts that are over quota and links them to their contact details in the CRM."

How great is it for a customer to hear that they've gone over but it's OK? So many companies would put a sting in the tail of the contract and charge overages (frequently at nasty rates), or just suspend their account until it's upgraded. Instead it's being used as a perfect opportunity to upsell an existing, qualified - and therefore presumably very happy customer - on a bigger plan.

[hglaser]

I get so much love from customers when I email them a few days ahead of the renewal and let them know that they're over quota, that I didn't want them to be surprised by the CC bill, and give them an opportunity to pare back down if they want to.

This is one of those areas where "being a good person" is a competitive advantage and drives lots of retention. Plus, after a couple months of this, they'll all upgrade anyway as paring down gets harder and more time-consuming.

[patio11]

"being a good person" is a competitive advantage

I get so much mileage out of the phrase "Don't worry, we aren't the phone company" it is unreal. Sure, we have hard costs associated with providing services, but I'd rather loses a few bucks occasionally on an account than routinely bite the hands that feed me.

[electromagnetic]

I think this is the better approach.

My Cell provider charges me overages, I can't upgrade to a better plan - there is none (honestly, how?) - so they charge me. The result? Last time my contract ended I changed provider.

If a customer is >X% over their limits, you should be selling them something better. If they don't want to upgrade their plan then it's time to start penalizing them for abusing the boundaries of the agreement.

If my cell provider had emailed me with "Your usage has been over your bandwidth limit by >5% we have Plan X for $$$ more that gives you XX% more bandwidth if you're interested, or overage charges will start being charged if plan overage continue."

Heck, I changed internet provider to one that offered sizeable bandwidth caps when I got Netflix, and I purposefully opt to pay extra for unlimited. I've only gone over their highest cap twice in two years, but I've often skirted near the limits. I'd rather pay a little more and be a happy customer, than be price gouged on overages.