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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 the recommendations in Price to Scale, the optimal timing for your first significant price increase is when market growth begins to slow noticeably – for example, if you see growth declining to around 20%. At this point, rather than trying to push for higher numbers solely through user acquisition or additional features, a price increase can be a straightforward method to hit your revenue targets.
Key insights from our pricing strategy book include:
• When growth slows, it may indicate that the current pricing strategy is limiting further expansion, making a price increase not only viable but also necessary.
• While there’s always a concern about maintaining customer satisfaction and NPS, the book explains that a price increase on existing customers (even with the same product and features) is acceptable if market momentum has dipped. For new customers, the choice to opt in with a higher price can serve as a natural filter.
• It is important to continuously monitor customer feedback, market responses, and churn metrics during any initial price changes. This ensures that you optimize the strategy over time and mitigate unexpected pushback.
In summary, if your growth metrics start to level off (such as around a 20% rate), it may be the right moment to consider a significant price increase. This strategy, as outlined in Price to Scale, helps balance revenue growth while keeping customer impact in check.