Would it be wise to offer a special introductory deal or grandfathered low price to initial customers and then increase prices later, or does that just create complications down the road?

Based on our saas pricing book, Price to Scale, offering a special introductory deal or grandfathered pricing to early customers can be a viable strategy—but it must be executed carefully to avoid future complications.

Here are some key points discussed in the book:

• Segment and Differentiate: Rather than a one-size-fits-all introductory discount, it’s important to segment your customer base. Some early adopters may have received lower prices due to negotiation or volume, while others may simply be testing the product. By tailoring your approach to these cohorts, you can adjust value propositions as you transition to new pricing tiers.

• Plan for Transition: When introducing new pricing or product tiers, proactively design alternatives for existing customers. For example, you might offer an upgrade option or a discounted rate contingent on a longer commitment, rather than a unilateral price increase. Doing so helps maintain customer loyalty and minimizes the risk of churn.

• Avoid Cannibalization Risks: The book cautions that reducing prices for existing plans or creating lower-priced options can lead to cannibalization. If customers see new deals that are better than what they currently receive, they may demand a similar discount or switch to a lower-margin plan. Establishing clear policies—such as explicit no-downgrade clauses—is recommended to mitigate this risk.

• Communicate Transparently: Staying upfront about the pricing strategy and the evolution of your product tiers helps set expectations. Customers who understand that these early deals were part of a launch phase are less likely to be upset when new pricing comes into effect.

In summary, while special introductory deals can attract initial customers, it’s essential to design your pricing strategy with a clear path for transitioning to your standard offerings. This proactive segmentation and careful packaging can help you reap the benefits of an early customer base without creating long-term complications. For more detailed guidance, you might explore the chapters that focus on customer segmentation and transition strategies in Price to Scale.