If currency exchange rates between our billing currency and a customer’s currency fluctuate a lot, should we update our prices in that currency periodically or absorb those changes to keep pricing stable?

Based on the philosophy outlined in our pricing strategy book, Price to Scale, the recommendation is to avoid frequent price changes in localized currency when exchange rates fluctuate in the short term. Here’s why:

• Keeping pricing stable in a customer’s currency helps maintain clarity and reduces potential confusion or customer churn. Rapid or frequent adjustments can disrupt the buyer experience and complicate renewal discussions.

• Instead of updating prices every time there’s a short-term fluctuation, it’s generally more effective to absorb minor variations within your margin management. This approach allows you to focus on long-term regime changes—similar to how our book discusses handling periods of high inflation or shifts in interest rates—rather than reacting to every market twist.

• When exchange rate movements are large or part of a sustained trend, then it might be necessary to reevaluate pricing. In such cases, changes should be communicated proactively to your customers, possibly tied to value enhancements or contractual adjustments, rather than a unilateral price hike.

In summary, our saas pricing book, Price to Scale, suggests balancing the need for pricing precision with customer stability. Minor fluctuations in currency conversion should typically be absorbed to maintain consistency, while strategically scheduled reviews and adjustments should be reserved for sustained, significant changes rather than routine volatility.