Questions

We've operated a SaaS product for many years and we think our pricing is too low to enable growth. I believe we need to raise our prices on all current customers and not just rely on higher prices for upgrades or new customers only. We're really serving customers and launching valuable features right now and would like to make an announcement in a couple months that the new pricing is going into force. To be fair, we plan on giving customers 60 days to decide if they want to continue service and we don't think there are any comparable alternatives to our service.

Many well-known SaaS companies have doubled their prices. I've personally worked with a few that have gone through it. In most cases, your conversion rates stay the same and you see a huge jump in revenue.

This is because people tend to under-price themselves. Also, your product improves over time so it provides more value and can support a higher price.

But don't raise prices for old customers. Grandfather them in so their plans stay the same price. In the long run, it won't make a difference to your growth since most of them will churn out anyway.

If you raise prices on current customers, you'll get a huge backlash. It gets nasty. I'm pretty sure that Zendesk tried it and had to reverse the price increase.

I highly recommend raising your price by 100% for a month on new customers. Keep a close eye on your revenue and your conversion rates. If things don't go well, you can easily reverse it and discount everyone that paid for the more expensive plan. Either way, you'll know what your market will actually support.


Answered 6 years ago

Unlock Startups Unlimited

Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.

Already a member? Sign in

Copyright © 2019 Startups.com LLC. All rights reserved.