Slack refunds customers 100x amount paid during outage | Hacker News Reader

Slack refunds customers 100x amount paid during outage

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145 pointsloteck75 comments

I once had a service where a customer was distraught by the way some features were implemented, he wanted things to work one way, but the service handled it in another. He wrote a fiery email about what a waste of time my service was because of these shortcomings and how he wished he had never bothered using it.

Determined to make things right, I told him I would refund him 1000% of the original price he paid, so that the final amount can express how much I really care about making sure he was happy with his experience.

The service was free.

GOLD! :) hahahaha. Resonate a lot with this.

Haha. I also see many such demands being made for small open-source projects (1-2 person(s) in their free time, not company funded)

Are there any resources / services where such developers can get paid on request and they work on the issues after that ?

The main one I know of is https://www.bountysource.com/

If you didn't care about making people happy with their experience, why did you offer a service?

To attract them onto a paid tier? Well then you lost that potential customer by being a smartarse.

Of course he knew it was free. But he took time to express his dissatisfaction directly to you. Most people would grouse on a forum and never give direct feedback.

It's possible other users were happy and this one user was going over the top.

There's a huge difference between:

Hi, your service as it is would not be adequate to my use case, here's why if you want to know and possibly change it.

and:

Can't believe you do X instead of Y, what a waste of time, this doesn't help me at all.

There was no paid tier. I created it for the good of the community.

> If you didn't care about making people happy with their experience, why did you offer a service?

Maybe it's to make "some" people happy with what something he did for fun? Not all of them and not for everything?

Do you offer any service for free? Why don't you bring me a coffee right now? Exactly, you don't offer only a service to make people happy... You would do it because it was accessible, possible for you and yeah, to make some people happy.

Anyone else think of Snowcrash and the Pizza Deliverators? In the book, the mafia-backed pizza delivery company simply guaranteed that your pizza would arrive in 30 minutes. Or else what? No, it was just a Guarantee. In the rare event they failed to deliver, they apologized in the form of outrageous vacations and such. The self-imposed penalty for failure was so great that recipients actively hope for failure.

Pretty great guarantee for the customer, all in all, although on the flip side, if your business uses Slack for critical communication in an emergency, the potential cost to you for a Slack outage might similarly be many orders of magnitude beyond the price of Slack.

If Slack was down for 5 minutes in a month that will break the 99.99% SLA. If you pay $6.67/mo for Slack, 6.67 * (0.01%) * 100 = 0.07

Yea I'll rather have Slack for that 5 minutes than save my company 7 cents.

If your company is only paying Slack $6.67 a month, you've either negotiated for an amazing discount or I really hope your chatbots are fun to talk to.

But I agree with your assessment: the purpose of the 100x is almost certainly to make it less offensive to receive an SLA credit. The only thing worse than having downtime is getting a credit that doesn't even round up to a dollar.

I'm just using the per user cost here. $6.67/user/mo is the standard plan price if you pay annually.

Most companies tend to have more than one employee - especially when they decide to buy an employee chat software.

As a matter of fact, the median company size in the United States is 1 - almost 80% of businesses have no employees at all!

But I agree that most of those 0- and 1-person businesses are probably not Slack customers ;)

7 cents per employee per month isn't exactly a generous discount either. Even if your chat is down for half the work day (4 hours), you're looking at $3.55.

I mean, it's better than nothing, but let's not pretend it's compensation for lost productivity either.

My thoughts are this: even at 100x, the service credit is probably not that significant to the recipient. But the amount at 100x is significant to Slack. As the recipient, I don’t think too much about the money I receive back, but I know those credits in aggregate are quite painful to Slack (and a lot more painful than they could have otherwise justified) so I know they are taking the issue seriously and will work hard to prevent future outages, which is worth a lot more to me than the service credit.

I'm using unit cost here so it's easier to see how I personally feel about it. Just multiply the number by however many employees you want to imagine.

And if you have 100,000 employees on slack, that compensation will be $7,000. For a company of that size this is not really noticeable. Refunds don't really matter, I guess most clients would be happier if that money was invested in increasing future reliability.

Pretty sure most companies have more than one user

The SLA only applies to the Plus plans.

Peter's point still holds. If the company has 100 employees, that is $7! For 10,000 employees, it comes to $700!

His point is that it isn't really significant. How can "catching" him on the single employee assumption be the response.

The number of companies for whom Chat SAAS is a major expense is probably pretty small. I think the refund is more important for how it impacts Slack than how it impacts its customers. As long as the refund is substantial enough to significantly impact Slack's bottom line, then I'm more inclined to believe that they are going to make a serious effort to avoid paying it in the future. That said, I'm not sure that refunding at this level represents a sufficient incentive.

7$ for 5 minutes of downtime in a month? That seems good to me. 1 hour would be a better example I guess, 84$ for an hour of downtime, that seems to be low for the amount of work that "may" have been lost, but then, that's weird to depend on a chat software that much.

I don't see what's weird about that -- before companies relied on chat, they relied on email -- in my company email can go down and people hardly notice, but a Slack outage is immediately met with cries of "Hey, are you having trouble with Slack!?".

Before companies relied on email, they relied on phones. My company doesn't even provide desk phones for most staff, only Sales and other staff that need to make a lot of calls have them.

So what's so weird about companies relying on Slack?

It is worth noting the SLA only applies to the Plus and Enterprise levels, so it would $12.50 / user. Still only 12.5 cents per 0.01% downtime per user. Doesn't really change your point though.

They were down for 53 minutes by their reckon and 115 minutes if the OG tweet times are right. Rough split the difference and say 65 minutes downtime, the refund would be ~ $62.50 for a 20 person team bill per month at current rates. That is not too shabby for being out of service for 1 hour during North American primetime. If they were out for 4 hrs 30 mins, it would have been a full refund for the month for everyone!

At 8 hrs outage/month, Slack would be completely free.

And that's a great way to test that you have backup comms systems working.

At 8 hrs outage per month, slack would have been out of business 4 hours ago.

In Snow Crash the boss would show up if your pizza was late. Nobody wanted to be responsible for the boss having to show up since the pizzeria was owned by the Mob.

This reminds me of Comcast outages. If you catch a failure as it happens, and if you navigate through the maze that is their phone tree, and if you wait long enough to actual speak to somebody in their offshore call center, and if you go through all the unrelated hoops they make you endure (e.g. "you reset your box wrong"), they will usually, eventually tell you that they will credit your account for one day's worth of charges.

And sometimes, the credit actually happens.

FWIW you can usually ask for more (I usually get around $20), but you have to actually negotiate with the person on the phone. It's really weird, you would expect them to just be reading off of a script, but they actually negotiate like a trained car salesman or something.

When I worked in a cable co call center a customer tried to negotiate a bigger discount by arguing that I couldn't prove the service was working while she was sleeping. I relented because it was going to cost the company more for me to stay on the phone than it did to just give her another 2 days worth of credit.

The downside is that the credit incentivizes her to repeat the process again and again.

I believe the customer support people usually have, say, $20 at their disposal to use as they see fit in order to deal with situations in which escalation would be more expensive than those $20. Thus, if it appears you're going to be costing more than that (through your negotiating), they'll probably just hand it out.

I worked at a US cellular company costumer service call-center once, we had 'unlimited' credits to give out to people, but we were incetivized to give none whenever is possible, that's why it seems like negotiating, because giving credit affects an employees metrics.

It also depends greatly on the mood of the one answering your call and your issue, if they're about to quit, big chances you get a nice credit for your complaint, it's kinda seen as a "just shut up" trump card.

If you do the math, your "100x" credit comes out to 13.8% of your monthly payment in credit per hour of down-time.

That's not terrible or extravagant. The 100x multiplier is there only to make the credit reasonable, without it you would be getting chump change.

Slack's SLA is 99.99%, so if they really believed in it they would refund 10,000x.

(They'd also go out of business, which shows the futility of SLAs.)

I don't think that shows the futility of SLAs. If their actual uptime was 99.991%, they'd have met their SLA but still paid a fortune in credits for the 0.009% downtime that did occur.

That's not... That's not how any of those contracts are written

I don't understand what you mean. Can you elaborate?

SLAs usually pay nothing if the downtime is less than allowed.

SLAs can be very misleading. Assuming that downtime usually occurs after changes/updates, they can push those to Friday evenings and have most downtimes occur over the weekend (not nice for their engineers though). Most clients won't care if they're down for a few minutes on a Sunday night. An outage monday morning is much worse. Therefore SLAs often don't really reflect client needs, which is having a 100% uptime for 40-60 hours a week.

Meanwhile engineers everywhere are wishing Slack had stayed down longer so they could continue getting work done without distractions!

The 'distraction' thing is one I keep seeing about Slack and I often wonder is this because individuals just are not managing notifications properly (or at all) or is it FOMO that causes the individual to habitually check channels?

Managing notifications properly?

There is no proper management of notifications. Either you store them completely out of sight (and thus are not notifications, but messages), or they interrupt you without taking into account how important the work you're doing is.

I hate notifications, and is why any time I've been forced to use slack, I use it through their irc gateway and disable all notifications.

Do Not Disturb mode is my saviour. Going deep into the engineering trenches? Flip it on. Answering emails/doing less important things? Turn it off.

I have a script that runs in the background on my laptop and automatically turns on DnD (and sets my status) whenever I'm on Google Meet talking to someone. That one thing has made calls so much more productive.

I know it's a long shot but do you think it's possible to share the script (gist/GitHub)?

Oh please share this!

Amazing. I love this. Slack, you are a great great company.

Compare this with AWS (disclosure: I worked there 2008-2014): you get refunded of the downtime in proportion to the month - e.g. 1 day of downtime means a ~3% discount on your monthly costs. Absurd. The damage is far greater than that.

Slack's policy is a great way to respect customers. Well well well done. Bravi.

Cable companies are the worst at this. I've had TV and internet outages with TWC/Spectrum where they've refunded me less than a dollar after I've called to complain. At least once they've had the audacity to charge me $5 for talking to a human, thus resulting in a net loss for me. WTF?!

I had an ISP once where the connection had to be down for an entire 24 hour period before you could get a refund.

It it came up for even 1 minute during the day, you wouldn't get a refund.

100x the price paid "during the period Slack was down" probably doesn't amount to much money. E.g. if you're down for an hour, that would likely void the SLA, but refunding for 100 hours is not much money vs how much a company would pay each month.

> but refunding for 100 hours is not much money

It’s ~14%. Not a significant sum, but still better than nothing.

The typical reaction I guess is, nice thing to do, but I’d be interested in the economics of the need to keep churn low, that probably makes this a good move financially.

Also its a credits and not cash rebate? So if I bail I get nothing?

Exactly. Because it's paid in the form of a service credit, this gets the customer who might be considering leaving an incentive to stay just long enough to forget/forgive the whole incident.

I am quite surprised at 100x amount. In the enterprise industry, companies usually have set SLAs and amounts written in the contract for violating SLAs. Did slack really write in 100x repay in the contract or is it overpaying enterprise customers (very weird)? Even if the paid amount is small, wording like 100x amount is bad for the enterprise industry.

Good question. Turns out it is spelled out right there in their SLA.[0]

If we fall short of our 99.99% uptime guarantee, we’ll refund customers on the Plus plan and above 100 times the amount your workspace paid during the period Slack was down.

[0] https://get.slack.help/hc/en-us/articles/204113126-Service-L...

Does that mean they refund the whole outage? Or just the time that exceeds the 0.01%?

Yes, this is really in their SLA: https://get.slack.help/hc/en-us/articles/204113126-Service-L... .

However, it's not a cash repayment, it's just future service credit. For example, if Slack were down for 30 minutes, you'd get 50 free hours of Slack.

It’s not really an overpayment. When we have an outage with a SaaS product during the workday, I usually ask for a one month credit and providers are happy to oblige. That’s 100x if it’s eight hours of downtime, 200x for four hours.

Interesting approach. Maybe that should be the "real SLA" number: 99% = 100x refund, 99.99% = 10000x refund.

Trying to figure out the math on this. Let's say I pay slack $1000 a month and it goes down for one full day - does that mean I get (1/30 * 1000) * 100 = $3,333?

(Assume 30 day month and 100% up time SLA for simplicity)

No, it's just Service Credits. So if Slack goes down for one full day, you get 100 free days of Slack in the future.

https://get.slack.help/hc/en-us/articles/204113126-Service-L... .

Or more realistically, if Slack goes down for 30 minutes, you get 50 hours of Slack for free in the future.

It's hard to calculate the actual value of these service credits.

Or less realistically, if Slack went offline for 3.65 days, everybody would presumably get free Slack for a year.

On the Plus plan or higher.

It's hard to calculate the actual value of these service credits.

    credits_value = planning_on_continuing_to_use_slack
        ? value_of_credits_in_dollars : 0;

Doesn't seem so hard to me.

That's correct (in account credit). Slack is generally very reliable, I'm sure it works out for them comfortably. Over 3 years we've had maybe three of four instances where we've lost availability for 15 minutes or more, never anything even close to a day.

Is this $monthly fee * 100 or $monthly fee/minutes in month * minutes of downtime * 100?

One is different than the other.

The latter:

> we’ll refund customers on the Plus plan and above 100 times the amount your workspace paid during the period Slack was down.

Good. One of the things that pisses me off about SLAs and the thing I always have to teach my bosses is that there is almost no tool we pay to use that isn’t making us 10-30x what we pay for it. It’s just not worth fighting with the finance people for anything less. So a money back guarantee doesn’t mean shit to me, except for virtue signaling.

"In the form of a 'service credit'".

Would gold pressed latinum be better?

Pure submarine marketing.

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