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Estd 4.22.2023
Based on our saas pricing book, Price to Scale, the recommended way to approach renegotiating with early customers who were promised “for life” or very low pricing is to be both strategic and transparent. Here are the key steps:
• Segment Your Customer Base:
Our book emphasizes that not all early customers are the same. Identify which cohorts benefit most from the current pricing and which might need to adjust for sustainability. Customers differ in usage levels, negotiated discounts, and contract sizes. Tailor your approach based on these differences.
• Craft Tailored Offers:
Instead of a one-size-fits-all change, offer creative alternatives. For example, you might provide an upgrade that delivers additional value for the same price, or a discount that comes with a commitment to a longer-term contract or an add-on feature. This not only softens the impact but also reinforces the value they receive for their loyalty.
• Communicate Proactively and Transparently:
As discussed in Price to Scale (see pages 245 and 287), it’s crucial to explain why the pricing must change. Emphasize the enhancements, improved service, or additional value the new structure brings. Open communication helps manage expectations and preserves trust.
• Introduce a New Pricing Line-up:
Rather than directly comparing the old and new pricing, develop a refreshed menu of options. By creating a distinct set of pricing packages (a “good-better-best” or modular approach), you can help customers see the upgraded value proposition without making them feel penalized for past agreements.
In summary, the key takeaway is to use segmentation and personalization to reframe the discussion around evolving value. A carefully crafted, transparent approach that offers genuine alternatives can help maintain customer trust while moving to a more sustainable pricing model.