1) Never, ever describe customer feedback as whining dramatics, especially when it is whining dramatics. It is very easy to get teachers to see things as Us vs. Them and you are -- make no mistake about this -- Them.
2) When reading comments from teachers about your pricing strategy I find it is salutary to remind oneself that they don't teach for free, either. Again, you don't have to say that out loud.
3) There are price-sensitive customers in every market. You don't have to sell to them.
4) Teachers report spending $250 to $400 a year on educational supplies from their own pockets. I would keep that in mind when contemplating pricing of software/services aimed at them.
5) If you want to sell to school districts, you are going to have to learn how to do Enterprise Sales. Trust me on this: $150 a year is not nearly enough to recoup the costs you'll incur doing this. (Just chasing POs through the 7+ step process to get them approved will cost you more than that in staff time. When customers approach me about paying with a PO I give them a copy for free -- it saves me money. Not even joking!)
In fact, that's exactly what I did with Twiddla, and it has paid off amazingly well in the form of ridiculously loyal, eternally grateful users and tons of free press. Better still, every student in every classroom that uses Twiddla today will eventually be wearing a suit and sitting in a conference room while a bunch of other guy in suits struggle to make WebEx work at all, and chances are he'll suggest this cool web meeting tool he used back in school.
So if I were you guys, I'd re-do the math to see what it will cost to offer free accounts, but only to educational users. It was more than worth it for us.
I think flickr does this.
Far too confrontational, imho...
Teachers are very reasonable people, so we're being straight forward about the situation and reminding them that we're not Google; we don't make money from ads, we make money from building software applications.
It amazes me how people assume free products "monetized" by ads are the norm when in fact it is a freakish anomaly for any business. Most companies run like lemonade stands; you pay for water, lemons and sugar, mix it all up, setup a stand, and sell it to a customer for an amount that covers your costs and gives you reasonable profits to cover your risk.
As a poster above mentioned earlier, just having to deal with a PO process almost automatically means you have to charge more just on that basis, as dealing with the paper back and forth process, collecting on invoices, etc., adds up to a significant portion of the acquisition costs. Unfortunately, it schools continue to insist on a purchase ordering model, they'll have to also keep paying for it in all the services/products they consume.
In fact, if you want an interesting business opportunity, it could be to build a product that helps schools/educational institutions buy shit more smartly!!! Using credit cards and expense reimbursements from staff members rather than a centralized purchase order/paper check system. Blech!