Legacy to New Buffer MRR transition during 2023

Up: § 2023 Shareholder Letter Index

Buffer is at a pivotal moment in time in the transition of our pricing and packaging model. In mid-2021, we rolled out new pricing on a per-channel model, in contrast to our previous pricing model, where we bundled the number of channels (social accounts) in each paid plan. This change in pricing enabled customers to grow either the number of channels or the number of team members independent of each other for the first time. We implemented this through a separate paid team plan, also priced per channel, where customers can work with as many collaborators as they want. Along with the new pricing model, we packaged our entire toolkit into a single price rather than charging separately for Publishing, Analytics, and Engagement tools. This brings a new level of simplicity to Buffer’s product offering, with a single price for all of our functionality, which can scale based on additional channels, features, or team members.

These changes were fairly significant compared to our legacy pricing, and given our long-term and customer-centric approach to business, we made a deliberate choice not to force a migration for our longstanding customers. This started a multi-year process of a shift towards our new pricing and packaging, which we have internally called New Buffer. It’s worth breaking down the results of New Buffer compared to Legacy Buffer segments, as they tell their own story of the 2023 results. Since mid-2021, all new users have gone onto the New Buffer experience, and we have added the majority of new functionality only to New Buffer. In late 2022, we introduced a self-serve migration experience for customers to move over from Legacy to New Buffer if they wish. The model is so different that in some cases, it could result in a price decrease, and for others, could result in a price increase. This is one of the many reasons we have chosen not to force customers to migrate.

In 2023, our New Buffer segment grew 60.63% to $12,491,457 ARR and grew to 36,943 paying customers (a 44.17% increase). In contrast, the Legacy Buffer segment declined 47.98% to $5,456,432 ARR and dropped to 19,004 paying customers (-42.66%). Notably, MRR/ARR on New Buffer plans grew from 42.46% to 69.58% in 2023. As we started the year with Legacy as the majority, we saw the impact overall in our numbers. However, as the year went on, we saw the New Buffer segment become the majority of MRR and paying customers and continue to show strong growth. This is what gives us confidence in a great 2024.