We are launching a revised pricing model effective 1st January 2025 to new customers  and 1st May 2025 to existing customers. This decision is critical to aligning our pricing with the value we offer, the rising costs of operations, and our position in the market.

Background

Our current pricing strategy was set in 2019/2020 and has remained unchanged for over 5 years. The pricing was based on the US dollar and translated to local currencies when invoicing in respective countries, especially Kenya and Nigeria. Considering this, when converted from USD to local currency, the effective price per employee is always lower than the price initially set. To recap, see below the current prices per module set in USD converted with 2020/22 and 2025 exchange rates. We are still charging the 2020 rates:

Meanwhile, many of our core costs, such as our cloud infrastructure and many other tools running the platform, along with operational software, are all charged in USD. Even other African software we use is charged in USD. And of course, over each of the last five years, all of our costs have increased, from salaries to rent, insurance, food, fuel, travel, etc.

What is our rationale for the price increase?

From the table above, it's clear that times have changed, and it's time to change our pricing. This is essential to ensure a sustainable business that is capable of meeting customer needs and providing excellent service.

What criteria and data points have we based our new pricing on?

• Cost of Customer Maintenance: Our Current cost per employee (COGS/Employee) is $0.41. This is higher than the effective fee we charge per employee on the launch if you put currency exchange and discounts in place. With this, we will never make money at the basic unit level and, by extension, at the company level. We are not charging enough to survive over the long term.
• Currency realignment: Our prices are quoted in local currencies pegged to a 2020 dollar rate, leading to revenue losses in markets like Kenya and Nigeria, as shown in the table above. We want to correct that.
• Market Comparison: Workpay’s pricing is significantly lower than that of competitors like Sage, Payspace, Seamless, and SimplePay, while offering comparable or greater value. Example: Our Grow package is priced at $1.54, compared to the market average of $3.14.
• Value for Service: Prices for our product have remained unchanged for five years since the company’s inception despite the added value we deliver to our clients and inflation in the 5 years.
• Revenue Potential: Adjusting suggested prices ($3 for Grow and $2 for Launch) could drive a 30% increase in revenue from existing clients alone which takes us closer to our profitability goal, even if some clients still churn.

The image above shows the effect on revenue if an extra 1% of effort is given to new customer acquisition, retention, and Monetization.

What is changing?

• We are introducing set-up fees.
• We are adding TA installation fees.
• We are introducing training fees for clients that have already asked us to train them more than twice.
• We are raising the minimum MRR to $40 for the Payroll Only feature and $60 for Payroll+HR
• We will quote and charge in USD.
• We are changing our packages to Payroll, Payroll+HR and PaaS. (breakdown to be shared).
• Performance Management and TA/Timesheets are to be sold separately as add-ons with additional fees

Change is never easy, and this is no different. We know you might have questions, and we have prepared these FAQs to help answer some of these questions. Please feel free to contact your line manager or business leadership team if you have any other questions.