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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 pricing strategy book, Price to Scale, the answer is nuanced. While reducing friction in PLG models is important, offering instant upgrades and downgrades should be approached with caution:
• It’s critical not to force a change in a customer’s tier simply for the sake of movement. As mentioned in Price to Scale, you can't change their needs or willingness to pay—forcing a customer to upgrade may backfire and block natural upsell paths.
• Instead, focus on creating tier structures that allow for natural, gradual movement. This means designing your packages so that as your customer's business grows (and their needs evolve), the benefits of moving to the next tier are clear and compelling without feeling like an imposed switch.
• While an instant upgrade/downgrade mechanism might seem appealing to reduce friction, you want to ensure that customers only move when it genuinely aligns with their value needs, thereby protecting your Net Retention Rate (NRR) in the long term.
In summary, our book advises against immediate, forced upgrades in a PLG model; rather, it suggests you build a pricing structure that naturally guides customers to the right tier as their requirements grow.