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Estd 4.22.2023
Based on the guidance in our SaaS pricing book, Price to Scale, it's best not to simply grandfather long-time customers on their old, lower pricing indefinitely. Instead, you should consider segmenting your existing customer base and offering tailored migration options rather than a blanket policy. Here are the key points:
• Segment Your Customers:
Our book emphasizes the importance of recognizing that different customers use your product in different ways. Instead of one-size-fits-all, you can identify cohorts based on how much they value the product or the discount they originally negotiated. This way, you can decide which customers might be appropriate for migration and which ones might warrant continued legacy pricing.
• Offer Tailored Alternatives:
As discussed in Price to Scale, consider offering a migration path that might involve a discount on the new pricing model—but with specific conditions (for example, a commitment to a longer-term contract or additional add-ons). This proactive approach helps you avoid simply undercutting yourself from an operational standpoint while ensuring customers see the value in moving to your upgraded offering.
• Avoid Blatant Price Comparisons:
The book advises refraining from simply discounting the same tiers, as it makes the comparison too easy for customers. Instead, think about refreshing your packages so that the new tiers look and feel different from the legacy options. This approach reduces friction and helps customers understand the added value in the new pricing model.
In summary, our pricing strategy in Price to Scale recommends migrating customers with carefully designed incentives rather than perpetually grandfathering old rates. This not only aligns with maintaining fair value across your customer base but also supports a more sustainable, competitive pricing structure.