Though pricing changes like this aren’t unusual, software companies regularly increase their prices, despite the fast decreasing cost of cloud computing. The change has been pretty badly received by customers on social media, with many users upset.

So what do the changes actually mean? Behind the legal jargon and marketing fluff, how much has Mailchimp’s pricing really changed?

Changes to how your audience is defined

The most significant change, and the one which has created most ire on Twitter is the change to how audiences are defined. Like most email marketing platforms, Mailchimp use the number of contacts to decide the cost of your monthly bill. The standard way of defining the size of this list is by looking at the number of subscribed contacts, after all why would anyone want to be paying to store contacts that they cannot email?

Mailchimp have redefined this, now counting all contacts irrespective of state. That means those users which unsubscribed 4 years ago, you’re now paying for those. That spammy email added to your list via a form, yet never opted in? You’re paying for that too. The argument from Mailchimp is that you can market to these users via other means than email, such as via their Facebook ad integration — though I would question how many of those old email addresses can be linked to Facebook profiles.

The average list is likely to increase in size by around 23%. More contacts you’ll be paying for.

Looking at the data we have at EmailOctopus, a change like this will on average work out at a 23% increase in a user’s list size. Admittedly, not significant if you’re a small business with a list of 500/600 users, but if you have a list in the tens of thousands, it could well cost a couple of hundred dollars a year.

No more unlimited emails

Under the previous pricing, all paid accounts could send unlimited emails up to the 50,000 contact tier. That meant you could happily send out a campaign a day, have a few automations running and not worry about your pricing tier. This has all changed, and quite dramatically.

Under the newer Mailchimp pricing, they have introduced 3 new tiers — Essential, Standard, and Premium. None of these offer unlimited email sends. Essential is the most restrictive, offering up to 10 emails a month per contact stored. Meaning a max of 500,000 emails can be sent on a 50,000 contact plan. Standard would offer 700,000, and Premium 850,000, under that same scenario.

In real terms, this could mean a dramatic increase in prices for those who used to send daily emails using Mailchimp as you will need to upgrade to a much larger plan. Here’s how it would affect a user with 10,000 contacts sending a daily email to each of them:

A user with 10,000 contacts sending 310,000 emails per month

The above scenario shows a 258% increase in cost, assuming you choose the correct plan. And well, if you don’t, there are now penalty fees…

Introduction of overage charges

Overage charges, or penalty fees, are another new addition under the pricing rework. Under the old system you would be automatically upgraded to the next available plan if you exceeded your limits. For example adding 3,000 users to a list of 4,995 would push you into the next pricing bracket of 5,000–10,000 contacts automatically and in monetary terms, that represented an increase of $25, from $50 to $75.

Under the revised pricing this no longer happens. Instead you are charged ‘additional charges’ for exceeding that limit. Using the previous example, a list of 4,995 with 3,000 additional users added via a list import would now incur overage fees. You would continue paying $49.99 under the essential plan, but you would also have to pay the additional charge on top. The additional charge on the essential plan is $9.99 per 500 contacts — or in other words you’d be paying an additional $59.94. Making your total cost for 8,000 contacts over $109.93.

It’s fair that you should pay more as a list grows, however should the old auto-upgrade system have remained in place you’d only be paying $74.99.

It’s now paramount for Mailchimp users to actively keep an eye on their list size and make sure that they upgrade when necessary, otherwise those overage charges are going to stack up.

A dramatic increase to pricing, hidden amongst the changes to tiers

Perhaps the biggest, yet least spoken about, change to Mailchimp’s pricing is their change to tiers and the features in which they can access. Previously, they were very open in their offering — giving all users on all plans (including free) access to almost every key feature. There were no limits on lists, templates, users and, as previously mentioned no limits on emails sent for many users.

This pricing iteration from Mailchimp completely changes that, though. Want to invite a colleague on their free plan? Not possible. Want to use a custom template on the paid Essential plan? Not possible. Even the expensive Standard plan now restricts the number of lists, or audiences as they’re now called, to 5.

There’s likely some science to this change, introducing gated features to encourage upgrades as users begin to get hooked into the platform — feature restriction across plans is certainly very common in Software as a Service but in doing this it’s hidden just how significant the pricing change may well be for some businesses.

A comparison of the free plans, with reduced functionality now in Pink.

A comparison of paid pricing plans, with the loss of features or functionality highlighted in light red. The cost of sending 1.55m emails is an extreme example, showing how quickly overages can add up and how much more they can cost.

As you can see there are some essentials which now require an upgrade to the Standard plan, rather than the more similarly priced Essential plan. If you run a brand conscious businesses and want access to features such as custom templates then you are now forced to upgrade to a standard plan which is up to 50% more than the previous pricing.

So who’s affected?

Among all the depressing changes above, there is actually some relatively positive news for existing users of the platform who are paying for the service. The changes only apply to new users and existing users on a free plan. So if you’re currently paying for MailChimp, you’re safe. For now.