Increase prices, for what it’s worth
While we have continuously raised our prices for new clients, our existing clients were still grandfathered into their entry prices, some for as long as 3 years. Many were paying a small fraction of our current prices and had been our earliest adopters, earning the “Friend of The Food Corridor” designation or non-profit discounts.
So, I was kinda dreading our increasing prices.
But when it came down to brass tacks, I was excited to do right by our company and assert our value. I was excited because we have spent the last 3 years building a product that our clients use every day, providing the friendly support they have grown to love, and practicing customer-centric development that they see in our product releases every month. In other words, we have proven our worth.
So how did I go about it?
- Analyze: I created a spreadsheet of each client’s current pricing, the price change, any discounts that needed to be applied and then analyzed the impact on each client. I decided to increase all existing clients to 2018 prices.
- Communicate: I drafted an email but personalized each one. Substance-wise, I was matter of fact: We are raising prices. Here is how it will impact you. We are looking forward to another great year. No apologizing, groveling, or puffing. I also provided an opportunity to purchase an annual subscription for an additional 10% off.
(H/T to Close for writing this great blog post, How to successfully increase your SaaS prices, which was my guiding force.)
Here is what the email looked like:
3. Schedule: I pressed send on a Friday afternoon at the end of October. I chose Friday because everyone is in a good mood on Friday, and even though the price changes won’t take effect until January 2019, I wanted to give clients enough time to plan for the change.
So what was the response? Frankly, as good as it gets.
“Thank you for the heads up and offer! I would be interested in applying for the yearly membership option. Let me know what I need to do.”
“We’re grateful and committed to staying with the platform, it’s been a pleasure to use its services and see all the system improvements over the past years. We’re glad to have been one of the early nonprofit adapters!”
“The gnomes are worth the increase!”
“We would like to pay for our 2019 subscription upfront and take advantage of the 10% discount. Thanks for being such a great asset to this community!”
“I’ll pay for all of 2019 up front for the 10% discount (and less transactions in the books!)”
“Why don’t we just pay you $199 per month? I feel this is fair to you and still absolutely a value to us. We can do the payment in full at $199 per month at the 10% discount if that is better for you, otherwise monthly is fine. We don’t rake it in with a gold yard implement or anything but we are a cash positive and I want us all to thrive and be successful.”
Wow. The Gnomes are so fortunate to have the best clients on the planet.
So next time you hear the voice of the great Patrick McKenzie telling you “charge more”, make a plan and execute. You may be surprised by the outcome.
