How to Increase SaaS Pricing Without Upsetting Your Users | UserActive

How to Increase SaaS Pricing Without Upsetting Your Users

SaaS Pricing Increase

Would you like to increase your SaaS pricing, but you’re worried about how your customers will react? You’ve worked so hard building your busines, you don’t want to do anything that’s going to risk your customer relationship. Let’s take a look at a smart strategy you can use to increase your pricing without upsetting your customers.

SaaS Pricing Increase Strategy

Having a strategy to increase your pricing will really help you. I’ve seen many cases where software companies have increased their pricing and it hasn’t gone down very well with their customer base. There’s a varying degree of reasons for this. But I’ve seen cases where sometimes they feel that it wasn’t communicated well enough or in advance enough, or that wasn’t a fair rationale or reasoning around why the price was increased. There wasn’t enough transparency around the price increase, or they just felt that they weren’t valued enough. You want to avoid all of these things.

But I’ve got one story about a SaaS pricing increase. Typeform built a really great product that took them some years and they realised after quite a period of time that they hadn’t increased their pricing. In this case Typeform decided to double their pricing because it had been such a long time. Their rationale was that they thought if they doubled their pricing, even if they lost half of their customer base through cancellations, at least they would still have the same revenue. But what happened is that observing their customers over the following two weeks after their SaaS pricing increase, they had zero drop off. They didn’t lose any customers and essentially they had doubled their revenue overnight.

Ideally you don’t want to leave it this long that you have to do such a big price increase, but you want to be monitoring it and reviewing your pricing regularly. Ideally, you want that same kind of experience where you don’t lose customers and you don’t have a bad fall back from customer response, upset customers and complaints.

Let’s take a look at the strategy that you can use to do this.

1. Have a Rationale for Your Price Increase

If there’s a good reason around your SaaS pricing increase, your customers are going to see and understand that and they’re going to value what you’ve done for them. But how can you provide more value? Improve your product, improve the UI, better UX, better features, you can provide more and better customer support, you can have a better team, better materials around your product tutorials and help base, etc. All of these things are increasing value in your offering and they’re giving you a good rationale for why there is a price increase that’s on the horizon for your customers.

2. Notify Customers in Advance

Give your customers a good warning and let them know three to four weeks before your price increase so that they know what’s coming down the road. You can start communicating a little more gently and explain that you have been working on the product and list the improvements that will be happening, as also the user’s benefits that will result from that.

3. Introduce Product Improvements

Communicate what’s now better in the product, use emails, use notifications and messaging within your product. Let them know what you’ve done and how they will benefit from it. If you’ve got new features, make sure you’re working on feature activation so that your customers are not only aware of the improvements and the greater value that you’re offering, but make sure they are also benefiting from it and using it.

4. Sweeten the News

If you are planning to make your final announcement in a week, for instance, provide a special offer for your customers. One possible use case might be that if a client upgrades from monthly to an annual plan, you keep them on the same pricing. You can also give a bonus, extra usage on the service your providing, a more complete customer support , etc. Sweetening that news and making a bit more palatable is a good way to present the new pricing. You just want to be really transparent about the changes that are happening, explain what it will be and why, and also provide something to make them feel good that it’s coming.

5. Monitor the Response

Keep an eye out for your behavioural analytics, check out for complaints or customer support requests and handle those as they come in. You might need to provide more allocation for things like these to make sure you will stay on top of any of the fall-back from the response from your customer base. Hopefully you won’t really have any problems to deal with and you’ll be receiving revenue in proportion to the value that you’re giving your customers because that’s what it’s all about.

Your SaaS Pricing Increase and Beyond

We hope this strategies help you in how you’re thinking about increasing your pricing, and I hope it helps you to improve your product so that you can get more users and grow.

Peter Loving

Peter helps SaaS companies create meaningful products users love. He regularly speaks at conferences and shares UI/UX related content on the UserActive blog and YouTube channel.

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