Increase your pricing

Why Raising Your Prices Works

It has a direct and immediate impact on your bottom line. Unlike acquiring a new customer, which comes with acquisition costs, every extra dollar from a price increase (on existing customers) is pure profit. A 10% price increase with zero churn is a 10% revenue increase overnight. Even with a small amount of churn, you can still come out far ahead.

Higher prices change how your product is perceived. A higher price can signal a premium, more valuable product, which helps attract customers who are less price-sensitive and more focused on results. It acts as a filter, weeding out high-maintenance, low-revenue customers and leaving you with a healthier, more profitable user base that is more invested in your success.

Three real examples

According to extensive research by ProfitWell (now Paddle), companies that regularly revisit and update their pricing every 6-12 months grow at nearly double the rate of those who set their price once and forget it.

The step-by-step playbook

1. 1

   Step 1: Audit your current position

   Create a simple document listing your current pricing tiers. Then, list the prices of your top 3-5 direct and indirect competitors. This gives you a quick snapshot of the market landscape.

2. 2

   Step 2: Identify your value metric

   Are you charging per seat, per project, by usage, or by feature tiers? Your value metric is *how* you charge. The best value metrics align with the value your customer receives--as they grow and get more value, they pay you more.

3. 3

   Step 3: Research what customers value

   You need to understand what your customers find most valuable. Use the email script below to ask your best customers for a 15-minute chat. For others, a simple one-question survey can work wonders: 'What's the #1 reason you use our product?'

4. 4

   Step 4: Model the financial impact

   Create a spreadsheet to model the change. Calculate your new MRR at different churn rates (e.g., 1%, 5%, 10%). This will show you how much churn you can 'afford' before the price increase becomes a net negative, giving you a clear risk threshold.

5. 5

   Step 5: Decide the new price

   Using your competitor research, customer feedback, and financial model, determine your new price. It could be a simple percentage increase (e.g., 15%) or a complete restructuring of your tiers.

6. 6

   Step 6: Plan the communication

   Decide how and when to tell customers. For existing users, give them at least 30 days' notice. Consider grandfathering-in early or very loyal customers at their old price, either forever or for a set period (e.g., 6-12 months).

7. 7

   Step 7: Draft your announcement

   Write the email that will go out to existing customers. Be direct, confident, and explain the reason for the increase is to continue investing in the product. Use the AI prompt below to get a solid first draft.

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   Step 8: Execute the technical change

   Update your pricing plans in your billing system (like Stripe or Paddle). Change the prices on your website's pricing page. Double-check that all changes are reflected correctly before you make the announcement.

9. 9

   Step 9: Announce and monitor

   Send the announcement email. For the next 30-60 days, keep a close eye on your churn rate, support tickets related to pricing, and of course, your monthly recurring revenue.

Copy-Paste Script: The Value Discovery Email

Before you change your price, you need to understand what your customers value. Use this simple email to ask for a quick chat to gather insights.

Subject: Quick question about {Your Product}

Hi {FirstName},

My name is {Your Name} and I'm the founder of {Your Company}. I'm doing some research to make sure we're building the best possible product for you.

I saw you're a valued customer and was hoping you might be open to a brief 15-minute call in the next week? I'd love to hear about your experience with {Your Product} and what you find most valuable.

Your feedback is incredibly important as we plan our next steps.

Thanks,
{Your Name}

Key Questions for Your Value Discovery Calls

• What's the main problem you solve with our product?
• If you couldn't use our product tomorrow, what would you use instead? (Their answer is your true competition)
• What's the single most valuable feature for you?
• Thinking about the value our product provides, how do you feel about our current price of {Current Price}?
• What is one thing we could build or improve that would make this product twice as valuable for you?

Focus on the 'what would you use instead' and the 'how do you feel about the price' questions. The first reveals your true competition (it's often a spreadsheet!), and the second gauges price sensitivity directly.

Recommended tools

Prices are indicative and change - check the vendor before buying.

Do it faster with AI Prompts

Mistakes that kill this play

• ×Apologizing for your price. Be confident in the value you provide. Don't say 'Sorry, but...'.
• ×Not giving existing customers enough notice. A minimum of 30 days is standard.
• ×Failing to explain *why* you're increasing the price. Connect it to product investment and future value.
• ×Making the pricing page confusing. Keep it simple with clear comparisons between plans.
• ×Not considering a grandfathering option for early or loyal customers. This goodwill can be worth more than the extra revenue.
• ×Forgetting to update pricing in all the places it's mentioned: website footers, help docs, in-app messages, and partner sites.
• ×Guessing the price without doing any customer research or value analysis first.

Your First 7-Day Plan

• Day 1: Audit your current pricing and your top 3 competitors. Create a simple spreadsheet comparing their features and price points against yours.
• Day 2: Use the email script in this playbook to ask 5-10 of your best customers for a 15-minute feedback call. For a wider pulse, build a 2-question survey in Tally.so.
• Day 3: Hold your first 1-2 customer calls. Take detailed notes, focusing on the specific language they use to describe the value they get.
• Day 4: Model the financial impact. Use the AI prompt to create a churn vs. revenue table. Determine your 'danger' churn rate where the price increase becomes unprofitable.
• Day 5: Based on your research and model, decide on the new price. Draft the announcement email and define your communications timeline (e.g., 'Email goes out on the 1st, price changes on the 31st').
• Day 6: Prepare the technical changes. Create the new pricing plans in your billing system and update your website pricing page on a staging server.
• Day 7: Final review. Read the announcement email one last time. Get a second pair of eyes on the new pricing page. Schedule the announcement and the deployment.

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