Klaviyo’s Recent Price Changes AKA Price Hikes!
Lately, we’ve been getting a lot of questions about Klaviyo’s pricing update. Let’s break it down and see what’s really going on —and how small businesses can SAVE MONEY.
WHAT’S HAPPENING?
Starting February 18th, Klaviyo will enforce pricing based on “Active profiles” for legacy accounts.
Previously, you only paid for emailed contacts, but that loophole is closing. For existing customers, price increases will be capped at 25%—unless you downgrade your plan.
WHO DOES THIS AFFECT?
Small businesses, particularly subscription brands, may feel this the most.
Why? Many subscription brands hold large numbers of “Active profiles” but email less often to avoid annoying customers. Businesses with longer purchase cycles or seasonal demand—who send emails infrequently—may also face higher costs without proportional email activity.
WHY IS KLAVIYO DOING THIS?
Klaviyo is now a public company, meaning their decisions must align with shareholder interests.
Their last price hike saw little churn, signaling that customers value their platform enough to absorb increases. Now, they’re testing the market again. This could also reflect pressure to maximize short-term profits as they expand into new industries and verticals.
HOW CAN YOU LOWER YOUR COSTS?
Here are two key strategies to help manage costs:
1. Clean Your Email List (and Keep it Clean)
Pruning inactive subscribers is critical for reducing costs. Here are some additional tips:
Identify Inactive Profiles: Go beyond engagement metrics and segment profiles with no purchases, site activity, or email clicks in the last 6–12 months.
Re-engage Before Suppressing: Send a targeted “We Miss You!” campaign with an exclusive offer to see if inactive subscribers can be won back.
Focus on Quality Over Quantity: Suppress any contacts who remain unresponsive after re-engagement efforts.
Use Automation: Implement a “Sunset Flow” that automatically suppresses profiles meeting inactivity criteria.
Trim Non-Buyers: If someone has been on your list for 6+ months and never purchased, consider suppressing or removing them.
Review Consent: Check that your contacts have opted in properly to avoid wasting resources on uninterested subscribers.
2. Consider Switching Platforms
Switching email platforms can save money, but it’s not a decision to take lightly. Here’s what to consider:
Feature Parity: Ensure the new platform offers the tools you rely on, like advanced segmentation, automations, and integrations with your eCommerce stack.
Migration Costs: Factor in the time and resources required to move data, recreate automations, and train your team on a new system.
Scalability: Will the new platform grow with your business? A cheaper option might cost more in the long run if it limits your growth.
Hidden Costs: Look beyond headline prices—some platforms charge extra for transactional emails, SMS, or certain integrations.
Customer Support: Switching to a budget platform could mean sacrificing the level of support Klaviyo provides.
THE BIG QUESTION
Most small businesses will probably absorb the price increase—but here’s what you need to ask yourself:
“Am I using Klaviyo to its full potential, or could I save money with a simpler platform while maintaining results?”
Evaluate your options carefully:
Quantify potential savings.
Assess the opportunity costs of switching platforms.
Consider where your time and budget are best spent to drive growth.
Klaviyo’s price hike reflects its position as a leading email platform, but it also reminds us to stay focused on what truly delivers value to our businesses.
What should you do now?
Ultimately, the decision is with you. You know your business best! Take time to evaluate. Look at your current costs, potential savings, and—most importantly—what drives the most value!
If you choose option 1, we can help you clean out your list for a small fixed fee.
If you choose option 2 we’re offering a free migration service for all of Quarter 1 in 2024 – complete with flow, template and segmentation carry over – done in 72 hours or less to Omnisend, our partner of choice!
Book a Discovery Call to get started!