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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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When implementing pricing changes in your business, effectively managing your existing customer base through grandfathering strategies is vital to maintaining relationships while evolving your pricing model. Here's the best approach:
Create a Structured Implementation Plan
Develop a detailed roadmap for rolling out your new pricing that specifically addresses how existing customers will be treated. This plan should include:
- Clear customer communication strategies
- Timeline for gradual implementation
- System updates to support both pricing models simultaneously
- Internal training for customer-facing teams
Implement Platform Fee Guard Rails
For significant model changes (like moving from subscription to usage-based pricing), consider implementing platform fee guard rails similar to our work with a $3.95B SaaS leader. This approach:
- Protects existing customers from dramatic price increases
- Prevents revenue reduction during the transition period
- Provides predictability for both customers and your business
Conduct Customer Acceptance Testing
Before full rollout, test your grandfathering approach with a subset of existing customers to:
- Gather feedback on the transition plan
- Identify potential issues in your approach
- Refine communication strategies based on real customer responses
Segment Your Customer Base
Not all customers should be treated identically during pricing changes:
- Identify high-value accounts that may need special treatment
- Consider different grandfathering timelines based on customer tenure
- Align grandfather terms with contract renewal dates where possible
Provide Clear Timeline and Incentives
The best grandfathering approaches include:
- Transparent communication about how long grandfather terms will last
- Potential incentives for early adopters of new pricing
- Clear explanation of the added value in the new pricing model
Ensure System Readiness
Supporting grandfathered customers requires your systems to handle multiple pricing models simultaneously:
- Update metering, billing, and CPQ systems
- Ensure sales compensation calculations work with both pricing models
- Create tooling to help sales explain the transition to customers
By following this strategic approach to grandfathering, you can implement necessary pricing changes while protecting your existing customer relationships and revenue base, as demonstrated in our case studies where we've helped companies successfully navigate complex pricing transitions.