I think some people underestimate how cost-sensitive some clients are. And how time poor some small businesses are.
Those aren't "clients", they're "moochers".
If they're prepared to walk away because it costs them $35/month to send to their mailing list, you probably owe it to yourself/your business to spend your time seeking new better clients rather than talking them thru how to get stuff/service for less than $35/month... Your business should be "cost sensitive" as well...
Our business found Mailgun to be a great solution when we anticipated clients would stick under 10k/mo and not need a card on file. With Stripe, every time they pay their cut, they've had a sale. Every time they mail-out through MailChimp, it's to a list of customers.
We are usually using Mailgun to send transactional emails. I can't promise a client that they won't get a flurry of junk signups or password reset mailouts that hit their credit card.
The bottom 50% of the market is heading to self-serve site-builders and it's savage for a small web business.
The responses to your posts are disgusting. I don't think a lot of people around here understand what it means to provide services to small local businesses.
I don't know about you, but I'm in a smaller community, people here still earn $7.25 per hour, and I just don't have access to deep-pocketed big businesses. I work with small businesses, individual business owner/operators, and mom and pop type places. $35 here, $50 there - it all adds up fast, and they are very conscious of these costs, and so am I.
Going to a small business owner and trying to explain any kind of price hike for a service they thought was free is just another burden to them, and it makes MY recommendation of the original service seem bad .... and I'm the guy they came to for GOOD advice.
Start charging your clients money to cover costs that comes with their business.
Freeloaders are simply not in my market.
And with that focus, I've been able to exponentially improve the value of what my company provides.
Your problem cascades from a B2C approaches to a B2B relationships. Not just yours to your client, but Mailgun's B2C approach to its relationship with your business. Free commercial email is likely to be unsustainable. At best, it's money left on the table because at 10k emails a month, there won't be many conversions. They were delivering free to a customer who expected free with the same damage to the customer's perception of the relationship as between you and your client.
The only part under your total control was whether or not to charge your client money. If you had, then the bad part would be Mailgun raising its prices. You would have had the option of eating the cost. Or having the unpleasant conversation with your client.
Maybe there's something slimy about charging a client for a free tier mail service. That's also under your control. Just pay for a paid tier and pass along cost at normal markup. In the long run, and that's what B2B relationships are about, it will tend to be simpler and simpler tends to be better for everyone.