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Estd 4.22.2023
Based on the insights in our pricing strategy book, Price to Scale, a more gradual, incremental approach to price increases is generally preferable for both customer acceptance and long-term business impact. Here’s why:
• Incremental adjustments allow you to align pricing more closely with value delivered. As your product evolves and you add new features or improvements, small increases help ensure that customers feel the price growth is justified. In our book, we discuss how pricing and packaging must evolve together in response to market maturity, making it easier to manage customer expectations when changes are spread out over time.
• Smaller, more frequent increases tend to be less jarring to customers. They have time to adjust, and the incremental nature of the change can reduce the perception of a sudden “price shock,” thus lowering the risk of churn. In contrast, a large price jump after a long period—with the same product and feature set—can lead to resistance or dissatisfaction.
• Incremental pricing changes also allow you to test and refine your approach. By monitoring customer feedback and performance metrics at each step, you can fine-tune subsequent increases for optimal business impact, as noted in sections discussing the customer journey and pricing evolution in Price to Scale.
While there may be circumstances where a larger price adjustment is warranted (for instance, after significant product enhancements or market repositioning), the general recommendation is to use smaller, incremental moves. This method provides a smoother transition for your customer base while gradually increasing revenue in a way that reflects added value.
In summary, our book advocates for small, incremental price increases as a more customer-friendly and strategically sound approach, with any larger changes requiring clear, added value communication to mitigate pushback.