Over the last couple months, I’ve received three price increase notifications from online services. One was from CloudApp, a freemium cloud storage and screenshot sharing service; another was from Netflix; and the last was from Amazon’s Prime service.

CloudApp’s email appears to be from the CEO, features a lot of poorly formatted text, and buries the lede. Worse, it notifies all premium users that their rates are doubling immediately ($5/month to $10, $45/year to $99). Furthermore, the wording seems to indicate that because they don’t make enough from their Pro accounts, they can’t cover the cost of all the free accounts.

Compare to the Netflix email. It’s simple and clear, represents a marginal (and frankly, expected) rate increase, and is light on excuses. Oh, and it gives me a nice guarantee that I won’t even see this price increase for two more years. That’s a two year heads-up for a $1/month increase!

Amazon’s is similar to Netflix’s. It simply states the price increase ($79/year to $99) and a handful of reasons that it is necessary.

Before today, if I were asked which of these services I’d be more satisfied with and loyal to, I would have chosen CloudApp without hesitation. Now, I’m not so sure.

I recently spoke with CloudApp’s CEO, and he seemed genuinely receptive to the feedback I had about their service. I’ve been a premium user since the beginning of their existence and I use the service every day. It makes sharing and storing screenshots and URL’s incredibly easy.

CloudApp is on my shortlist of apps and services that I recommend to others on a regular basis. I can count these services on one hand.

So why am I less than thrilled with CloudApp right now? Because my respect for companies is directly related to their apparent respect for me as a customer. With CloudApp, I get the impression that loyal, paying users are being forced to pay for bad business decisions and growing pains, not for the value they’re being given.

Here’s how CloudApp’s price increase could have been handled better.

Ask your users what your service is worth to them

Picturelife is one of the other services on my shortlist. They provide storage for all your photos and videos, along with online organizational and editing tools. Picturelife sent me a survey this week about pricing for a potential unlimited storage plan. Normally I ignore surveys, but since I’m kind of in love with Picturelife, I decided to take it.

The survey asks 5 very simple questions.

• At what (monthly) price would you begin to think a Picturelife plan with unlimited storage is too expensive to consider purchasing?
• At what (monthly) price would you begin to think a Picturelife plan with unlimited storage is getting expensive, but you still might consider purchasing it?
• At what (monthly) price would you think a Picturelife plan with unlimited storage is a bargain — a great buy for the money?
• At what (monthly) price would you begin to think a Picturelife plan with unlimited storage is so inexpensive that you would question the quality and not consider it?
• How likely to purchase (or continue to purchase) a Picturelife plan with unlimited storage are you? (On a scale of 1 to 7. I chose 7.)

And instantly, I feel respected by Picturelife. I feel as if they’ve built their product to make me happy, not because they said it, but because they included me.

If your planned price increase isn’t in line with the results of your survey, something has to give. And that something is not ignoring your customers.

Make price increases incremental

The part of CloudApp’s price increase that I find the most surprising is the 100% increase. This means that either the original price was based on bad data or that they were intentionally operating at a loss for 5 years. Either way, it does little to bolster my confidence in the company.

Increasing the price by a dollar or two once per year is preferential to slamming your best customers with a sudden 100% increase. When you say “we haven’t raised our prices in 5 years, so this doubling is justified,” I only wonder why you didn’t incrementally increase your prices before.

Give notice

Netflix gave me two years. Amazon Prime gave me 3 months.

Give users time to adjust to the idea of a higher price. Give users who aren’t going to stay at the higher price anyway time to evaluate their options and salvage their content. Even if your increase is large, your users will appreciate the heads up and will retain more respect for your company.

Keep the TMI to yourself

Only share the information that affects your customers. They don’t care about the DDOS attacks, how many people you’ve had to hire, or other business expenses that don’t add any value to what they’re asked to pay. Send that email to your investors, not your customers.

Netflix and Amazon Prime shared pertinent value increases. Netflix wants to keep adding movies and TV shows. Amazon references fuel costs briefly, but then quickly points out all the benefits they’ve added to a Prime membership over the years.

The result is that CloudApp’s email makes me think their business is in dire need of help, while Netflix and Amazon’s make me feel like, yeah, I probably should be paying a bit more for this.

Request feedback from your customers

CloudApp actually gets this right. Sorta.

That said, we only exist because we make you happy—and if you have ANY concerns whatsoever about our new pricing, I want to hear them directly. This is my personal line: XXX-XXX-XXXX. Ring me at any time and give me your feedback and if the previous pricing is more important to you than the value you see coming from our new releases and updates, then I’ll make sure you aren’t charged for the new pricing. But, I hope that you DO value our updates and that you appreciate our struggle and how much your account means to us.

This paragraph should’ve ended after the phone number. Instead, I get the impression I’m supposed to feel guilty if I think the rate increase is unjustified, too high, or handled poorly. Further, “appreciate our struggle” would be acceptable language for a donation request from a charity fighting disease or poverty, but this is a business that charges me money for a service. Again, this kind of wording is not confidence inspiring.

Make it simple for users to give you their feedback on your price increase, whether you’re likely to feel good about it or not. There’s no need to dole out individual reprieves for those who complain (as CloudApp claims they will do), but be open to the fact that you might need to adjust your price increase across the board if enough of your users are outraged.

It would have been better to just ask your users’ opinions on pricing in the first place.

Offer another plan

If you really must increase prices by a large amount, your users should not be left with the choice of paying or leaving. Instead, give them an option to stay at their current — or slightly increased — price. Either reduce the feature set or, better, grandfather in existing longtime users at the old (or slightly increased) price.

The point is, you have other options that won’t alienate your best (read: longtime, paying) customers but still get you to the revenue point you need.

Obviously I’m not privy to CloudApp’s business “struggles,” so it may very well be that a 100% rate increase was the only option they had and is completely justified. The ironic thing is that I will continue to pay for my CloudApp Pro service, since I’ve found it so useful over the years. But they could have handled it in a much better way. Lesser products would not get such a pass from me.

Remember that your customers know that prices increase. It’s a simple part of business. Handle those increases in an uncomplicated and respectful way, and your customers will love you for it.