Almost every founder I work with thinks their prices are too low. Almost none of them have raised them in the last two years. The fear is always the same: that the day the new prices go out, the customers go too.
In practice, the customers who leave over a well-handled price rise are few, and they are rarely the ones you want to keep. The damage comes from handling it badly, not from the rise itself.
Start with the people who left
Before you change anything, talk to customers who cancelled in the last year and to prospects who chose someone else. Ask what they were comparing you with and what would have made them stay. Price comes up less often than you expect. When it does, it is usually about packaging, not the number.
Change what you charge for, not just how much
The best price rises I’ve seen changed the unit of pricing so it grows with the value customers get. Hollis moved from pricing per office to pricing per scheduled technician. Small customers paid about the same; customers who had grown paid what they should have been paying all along.
- Find the thing that grows when your customer succeeds.
- Check that customers can predict their bill from it.
- Make sure your sales team can explain it in one sentence.
Model every customer before you decide
Run every current account through the new prices. You will find the handful of customers whose bill doubles, and you can decide what to do about them before they find out, not after.
If you can’t say what happens to your ten biggest customers, you aren’t ready to announce anything.
Give notice, and mean it
New customers can move to new prices the day you decide. Existing customers deserve notice: three to six months is normal for software, with a clear date and a short explanation of what has improved since they joined. Sales should know the answer to every awkward question before the email goes out.
Fix the discounting at the same time
A price rise without discount rules is a price rise on paper. Agree who can discount, by how much and in return for what. At Hollis, that alone moved the average discount from 28% to 9%.
None of this is fast, but none of it is dramatic either. Most customers read the email, check the new number, and carry on.
