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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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Below is a summary of how our book, Price to Scale, suggests handling the PR and marketing aspects of significant price increases:
Direct Answer
When planning a significant price increase, it’s essential to view PR and marketing as strategic components, not just communication channels. This involves a measured approach that addresses both new prospects and existing customers through carefully tailored messaging.
Key Points from Price to Scale
Target Different Customer Segments:
Our pricing strategy book highlights that upsell and pricing changes are nuanced. While new customer acquisition might rely on broad, multi-channel awareness campaigns, existing customers often require more personalized communication. This ensures that long-standing customers who may have been accustomed to earlier pricing structures understand the value behind the change.Emphasize Value and Context:
Significant price increases can sometimes seem abrupt. Price to Scale recommends framing these changes by underlining enhancements in features, support, or overall value. The messaging should clearly explain that the increase reflects improvements that benefit the user, thereby making the transition feel more like an upgrade rather than a penalty.Plan a Dedicated Mini-Project:
The book suggests treating any major price increase as its own strategic initiative. This means that apart from the product and packaging design aspects, you should dedicate specific resources and planning to your PR and marketing efforts. This mini-project would encompass everything from internal alignment on the rationale to external messaging that anticipates and addresses potential customer concerns.Use a Different Lens for Renewals vs. New Sales:
The book differentiates between the process of upselling during renewals and acquiring new clients. For renewals, where customers might face a 2-3x higher list price compared to their original plan, it is critical to provide clear, transparent, and value-focused communication. The objective is to minimize pushback by demonstrating how the new package better aligns with evolving customer needs.
Practical Application
Develop Clear, Consistent Messaging:
Create a narrative that explains why the price changes are necessary, linking them to improved functionality, customer support, or market standards.Segment Your Audience:
– For existing customers: Use personalized communication, perhaps via account managers, to explain how the changes benefit them and address concerns.
– For prospective customers: Enhance awareness campaigns emphasizing the new value propositions that justify a higher average selling price.Internal Alignment:
Ensure that your sales, customer success, and leadership teams are aligned on the reasons for the price change, so they can communicate confidently and consistently.Monitor Response and Adapt:
Implement feedback loops through customer support channels and market monitoring to quickly address emerging concerns and adjust messaging if needed.
Takeaway
According to our saas pricing book, Price to Scale, handling the PR and marketing aspects of significant price increases requires a thoughtful, segmented approach that stresses transparency, customer value, and careful internal planning. This not only smooths the transition for existing customers but also reinforces the new pricing's credibility and market fit.