When is the right time to raise prices for our SaaS? What signs should we look for (e.g., consistently high demand, feature improvements, competitor pricing) to know we can successfully charge more?

Below are some key signs and considerations from our saas pricing book, Price to Scale, that indicate when it might be the right time to raise your prices:

• Slowing Growth or Plateauing Revenue:
If your overall growth has slowed—for example, if it’s around 20% instead of accelerating—raising prices for existing customers can be a quick way to bolster revenue without having to acquire entirely new users. As discussed in our book (see the section on annual price increases), many companies have successfully implemented modest annual price increases when faced with slowing growth.

• Enhanced Product Value through Feature Improvements:
When you’ve significantly improved your product’s features or added new functionalities, your product's value to customers increases. This can create an opportunity to justify a higher pricing tier. Your customers are likely to perceive greater value and may be more willing to pay if they see tangible enhancements.

• Sustained High Demand and Market Positioning:
Consistently high demand is another indicator that customers see your solution as a must-have. This can enable you to test and implement a price increase relatively smoothly, especially for new customer segments where you can let them “choose” the new higher price instead of retroactively altering terms for existing users.

• Competitive and Economic Factors:
Changes in economic conditions and competitor pricing can also signal the time for a price adjustment. If competitors are pricing higher or market conditions are shifting (for example, through increased cost of capital impacting overall SaaS valuations as mentioned in Price to Scale), you may find that aligning your pricing with market realities improves both your profitability and competitive positioning.

In summary, the right time to raise prices is when your product has clearly increased in value through improvements, when high demand supports your pricing strategy, and when market conditions—whether economic or competitive—justify an upward adjustment. By monitoring these signals and carefully testing your pricing strategy, you can successfully charge more while maintaining customer satisfaction.