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Estd 4.22.2023
Based on the guidance in our SaaS pricing book, Price to Scale, here’s how you can approach a price increase for new signups while maintaining trust with your existing user base:
It Can Be OK – With Caution
- Segmented Approach:
The book explains that “raise prices for new customers? At least they get to choose.” This means it’s acceptable to test different price points for new signups, provided you clearly segment your customer base. Grandfathering legacy pricing is a recognized method, allowing you to reward long-term customers while also experimenting with pricing for later entrants.
Managing the Risk of Leaks
Distinct Product Lines:
As suggested in Price to Scale, designing a new line-up for new customers helps ensure that the changes aren’t easily compared side-by-side with existing offerings. By differentiating the new and the existing packages (for instance, through added features or distinct branding), you create a natural barrier to direct comparisons.Controlled Communication:
Transparency is essential—even if indirectly. While you can charge new customers a higher fee, be sure that your marketing and onboarding processes for them clearly reflect the value proposition at the new price point. This approach minimizes the feeling of unfairness if the information becomes known later.Proactive Strategy:
Consider having clear internal and external messaging. Internally, educate customer-facing teams on the rationale behind the segmentation. Externally, if questions arise, be prepared to explain that the difference in pricing is due to product evolution and enhancements offered to new customers as compared to legacy plans.
Practical Steps You Can Take
Package Differentiation:
Develop a version of your product for new signups that includes specific features, benefits, or support levels that justify the higher price.Monitoring and Adjustment:
Set up metrics to monitor any potential spillover effects (such as inquiries or churn risk from existing customers) and be ready to adjust tactics if there are signs of leakage or dissatisfaction.
Takeaway
In summary, as discussed in our pricing strategy book Price to Scale, it is acceptable to test a higher price for new signups while grandfathering existing customers. The key is to carefully segment your offerings, design clear and distinct pricing packages, and proactively manage the internal and external communications to minimize potential negative reactions or leaks. This method ultimately lets new customers “choose” their pricing based on the value they receive while protecting the established trust of your long-term users.