When was the last time you updated your pricing? Has it been a long time? In this article we will discuss how frequently you should review and update your software pricing.
1. When Should You Review It?
It might be the case that you have been working on your product, making improvements and your company and team are all getting better. Yet, the value that you’re receiving from your customers is staying the same. So, there’s a bit of a disparity between the value that you’re giving and the value that you’re receiving and what you want to do is get that more matched up. It’s always better to give more value than you receive, in our opinion.
2. How Frequently Should You Review It?
If you set up a pricing committee every six months, then that’s a good interval at which you can consider and review pricing. Get people on board in that meeting: people from product, marketing, technical teams, customer success, sales, support, etc. and get some input from everybody. What’s the consensus of feedback? How do customers feel? How does everyone feel about pricing? Do they feel it can be higher or lower?
Also, it’s not just about the price point, it’s also about where features sit in your different tiers and where usage sits within your different pricing plans. It’s important to think about this holistically and not just about pricing increase. Sometimes it can be price changes, sometimes it can be pricing model changes as well. So if you think about that and have a meeting every six months, you’re in a good place to be always reviewing it and never letting it lag too long.
3. When to update the pricing?
If you review pricing every 6 months, then what you want to be doing is update your pricing every 6 to 18 months so that you always stay on top of it in the review. Then, you release the update to your pricing on your pricing page and you communicate that and why it’s being done.
4. Consider the Rate of Your Company Growth
The other thing you want to do is consider the rate of your company’s growth, the rate at which you’re developing. If you’re moving quickly, your pricing might be changing faster. You might be iterating through your models, through your pricing structure and it may be slightly more frequently. If you’re going more steadily and more established, then your pricing might not need to be updated every six months. In that case, and you might be more towards the 18 months cycle. Just keep that cycle going so that you don’t lapse and make sure you’re staying on top of a good pricing model and strategy for your customers and for your business.
We hope this video will encourage you to think about the cycle and time frame at which you should be reviewing your pricing, and that in turn helps you to improve your product, get more users and grow!