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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Based on our saas pricing book, Price to Scale, after implementing a pricing change you should monitor a blend of quantitative and qualitative metrics to determine its impact. Here are the key areas to focus on:
• Churn and Churn Propensity
- Track overall churn rates and consider developing a churn propensity score, as discussed in the book. This helps you identify customer cohorts that may be at risk, allowing you to target them with tailored offers or additional engagement.
• Customer Behavior Metrics
- Monitor sign-up rates and upgrade rates to see how new and existing customers are responding to the change.
- Look at usage-based metrics such as $/MAU or $/customer visit which can link actual usage (and hence inherent value) to pricing performance.
• Revenue Predictability and Forecasting
- One of the core criteria the book highlights is that metrics should be predictable. Consistent billing and revenue forecasting are critical, so track whether the price change affects your month‐on‐month revenue consistency.
• Customer Lifetime Value (LTV)
- Examine any shifts in LTV. A successful pricing change should balance upfront revenue gains with long-term customer value, without driving significant churn.
• Customer Satisfaction and Feedback
- Utilize feedback loops from your sales, account management, and customer support teams to gauge qualitative responses. This insight is valuable for iterative pricing strategy adjustments, as detailed in the monitoring and feedback loop section.
In summary, our pricing strategy book, Price to Scale, recommends a holistic approach—combining hard metrics (like churn, sign-up rates, and usage dollars) with customer feedback—to ensure that any pricing change is delivering the intended value without sacrificing long-term growth.