WHEN should my company start thinking about a pricing adjustment?
The sweet spot for making outward changes to your pricing plan is around every 6-9 months. It often works well to coincide price adjustments with product adjustments, but this isn't a steadfast rule. Your timeline for making changes depends on the growth stage of your company.
- Newer companies: Make some sort of adjustment every 6 months.
In addition, new companies should be conducting reviews every quarter. It's important to understand how your current strategy is working even if you're not planning on making outward changes at that time.
- More mature companies: Review every quarter, and make adjustments every 6-12 months.
Contrary to common practice, a larger company size and more experience do not necessarily mean less frequent price adjustments. As companies scale and begin to sell to enterprise-level customers they need to constantly make adjustments to their pricing plans.
The frequency of changes will vary because companies with enterprise-level customers might need to make adjustments every time they take on new customers of this size. This is because enterprise-level plans often involve custom packaging and pricing on a customer-by-customer basis.
When a new enterprise-level customer requests a consultation, your company needs to evaluate exactly how to scale your pricing to a particular value metric for that customer.
But you can't just sit down once or twice a year, pull your hair and grind your teeth for a few hours, and emerge from your meeting room with a perfect new pricing plan. Though outward changes to your pricing are done in intervals, the internal work is daily and dynamic.
Your continuous process will include research, conversations, and brainstorming sessions. It should be centered around learning about the market, learning about your customers, and understanding how pricing affects other aspects of your company. There are concrete steps that you can take immediately to kick off your pricing process today.
Key Takeaway: If it's been over a year since you made changes to your pricing strategy, it's outdated - you're missing out on a wealth of monetization opportunity.