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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 Price to Scale, the best approach is to be transparent, segmented, and personalized in your communications. Here are some key points derived from our pricing strategy book:
• Use Clear, Honest Messaging: Explain why the price increase is necessary (for example, to sustain growth or invest in better features) while emphasizing that the value delivered remains consistent or is even enhanced.
• Personalize the Approach: Recognize that long-term customers may have negotiated or locked in earlier terms. Address them individually rather than applying a blanket change. As discussed in our book, consider offering targeted alternatives such as tiered options or even tailored price reductions—if it makes sense—to reward loyalty.
• Segment Your Customer Base: Our book advises to segment the customer base to identify groups that might respond differently. Some long-term customers might be open to a revised plan that includes an upgrade, while others might appreciate a proposition that ties in a commitment (like a longer contract) in exchange for the adjusted pricing.
• Proactive Communication: Instead of waiting for customers to react, reach out with a clear explanation of the changes. This might involve detailed emails, one-on-one calls, or personalized messages that underscore your appreciation for their loyalty and explain the strategic need for adjustments.
In summary, when communicating a price increase to long-term customers, be transparent about the reasons, tailor your approach based on their usage and history, and proactively offer value-driven alternatives where possible. This approach not only respects their loyalty but also aligns with the strategic frameworks outlined in Price to Scale.