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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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Below is a concise answer based on our saas pricing book, Price to Scale:
Direct Answer:
After implementing a price increase, you should focus on monitoring metrics that are directly tied to customer usage, revenue predictability, and overall customer behavior. Specifically, look at metrics that are predictable, acceptable, and trackable to ensure that the price increase is yielding the expected outcomes.
Key Metrics to Consider:
Usage-Based Metrics:
• Metrics such as $/MAU (dollars per Monthly Active User) or $/customer visits help gauge how closely pricing correlates with how your customers derive value. They indicate whether customers are still engaging with your product at a level that supports the increased price.Predictability of Revenue:
• As discussed in our book, one important criterion is the ability to reliably forecast revenue. Monitor month-to-month revenue trends to ensure that the price increase translates into a predictable and stable revenue stream.Customer Retention and Churn Rates:
• Keep an eye on churn or cancellation rates post-price change. A price increase should not lead to a significant drop in customer retention, especially if the increase isn’t matched by an increase in delivered value.Customer Feedback and Acceptability:
• Given that an acceptable metric must be easily understood and accepted by both customers and your sales team, collecting qualitative and quantitative customer feedback helps ensure that the market perceives the price change as fair and logical.
Contextual Insights and Practical Application:
Our pricing strategy book, Price to Scale, emphasizes that every metric you monitor should be subject to criteria such as predictability, acceptability, and trackability. By aligning your metrics with these principles, you create a feedback loop that informs whether the price increase is sustainable and whether further adjustments might be necessary. For instance, if you find that customers are reducing usage significantly, then the value delivered may no longer justify the higher cost—this would warrant a closer look at your pricing and packaging strategy.
Summary:
In summary, focus on usage-based metrics (like $/MAU and $/customer visits), revenue predictability, churn rates, and customer feedback. These metrics, when monitored against our five key criteria, will provide a comprehensive view of the success of your price increase and help identify any necessary course corrections.
This approach, rooted in the principles provided in Price to Scale, ensures your price strategy remains both competitive and aligned with customer value.