How to communicate price increases to existing customers?
Yesterday, I asked how you set your pricing strategy and discounts (you had some interesting insights and experiences to share – Thank you!).
Setting prices is one thing, but what about increasing them?
Customers can be very sensitive to price changes (especially upwards).
How would you communicate price tier increases to existing customers?
Do you use any justifications? Compensations? (e.g. in the form of adding some exceptional features)
If possible, feel free to share your template on how you communicated this without losing them.
260 views
Replies
Depending on the market, if you use ai api, I fear they will look for better alternatives, this is also the general problem, people are only open to pay what is for them right. So if you are open for why you increase and also what they get in return, that would work best. Be open and honest
minimalist phone: creating folders
@sietse_schelpe The worst scenario is when you are a user and you are dealing on X API :D Prices are ridiculous :D
Howdy
Few things that can help:
Give customers a heads-up at least 30 days in advance. Be clear about why the price change is happening, whether it’s due to new features or a shift in the value you’re delivering.
It helps to tie the price increase to something meaningful: what’s improved / what’s coming next.
Offering a way to “lock in the current price” for a limited time is also a great way to reduce friction. Make users (especially early adopters) feel like they’re getting a deal, not just paying more.
minimalist phone: creating folders
@ngorgiashvili Good points :)
Maybe this is my isolated analytics of users, but justifications don't matter.
Customers aren't just personas, they're people with intelligence, and trying to actually make too much of a justification can just come off as corporate, cold, and lose the candor you've built if you have a good relationship with your users.
When I had to work to launch something impacting a large group of users before my current gig, it was the same story. Being up front, saying why prices had to increase, and just respecting my users has gone a long way.
minimalist phone: creating folders
@csurita Okay, so what was your explanation for not having churns?
@busmark_w_nika great callout! Something I didn’t callout was rollout really helped in my cases with churn.
We definitely tried to work with stakeholders, depending on how important they were even given a VERY extended rollout phase. This softened the blow significantly, and in rare cases our clients couldn’t accommodate the changes they were very open to negotiating.
If I’m being completely transparent, it also depends on the lifecycle of the business. Just starting or mid-scale? Probably do a MUCH more in depth customer analysis before rollout to determine if this increase is going to create momentum you need to get to the next stage. Fairly established? I think there’s cushion for churn and the real thing to ask is how much can you stomach.
Great thread overall, really something that isn’t talked about enough honestly.
minimalist phone: creating folders
@csurita You are right about the product cycle – it varies, but let's say that our situation was like – starting with a relatively new product, but had reckoned the pricing badly at the beginning so we had to adjust too soon :DDD