In this episode, our experts explore the delicate art of raising prices for both long-standing and new customers.
No one likes a sudden increase in prices, but sometimes it's necessary for a business to thrive. Learn how to give a proper heads-up, offer a buffer, and implement gradual changes to avoid alienating your clientele. With practical tips and real-life examples, this episode will help you navigate the challenges of price adjustments while maintaining customer trust and satisfaction. Tune in for invaluable guidance on executing price hikes with finesse!
Welcome to 20 days of pricing tips—part 2. I’m Alexa, a member of the pricing team and I’ve worked on 36 pricing projects. Today we're breaking down Legacy Pricing.
As your product grows to include more functionality, the price of your product should also increase. But often companies are scared to increase their prices for long tenured customers, resulting in the extension of "legacy pricing".
While it seems like a nice gesture for customers, you are jeopardizing MRR and customer LTV.
If you're implementing pricing on the value your customers see in your product then your longest-tenured customers will be happy to pay more as their value increases.
Before getting too far along in your pricing changes, take a few minutes to interview your customers and understand if the changes you are making are worth the price increase.
Of course, an overnight change in price is always scary - so if you are going to up your prices on your longest-tenured customers (and even your newest ones), give them a heads up and a buffer.
Thanks for checking out our pricing tips. If you want to connect with our pricing team email Patrick@profitwell.com and we’ll send over the intro.