It’s an integral part of a SaaS business to keep product pricing in line with rising costs. As they rely on subscription customers, it should come as no surprise that price increases are likely to occur, even for the same product. Usually, customers understand that pricing can change and as long as it is not by too much they shouldn’t be perturbed.
If the price increase is communicated effectively, you shouldn’t risk losing too many customers through churn. Customers appreciate transparency and timeliness, so your business should be upfront through any changes in price. Usually, price increases should be in line with your competitors and if your product is more expensive then customers might start wondering why.
Of course, if you want to raise your prices, there are usually good reasons behind it and the key is to communicate these reasons to customers. They must be given the impression that they are still your priority and that any price increases will enable your SaaS business to deliver better service.
What is a Price Increase Announcement?
A price increase announcement is when SaaS companies send notifications to their customers informing them about a change in the current price of their product. Price increase announcements are important because you don’t want customers to find out about price changes when it comes to their billing date. If customers are caught by surprise, they may lose trust in your company and take their business elsewhere.
Announcing price increase usually includes the reasons why a price change is needed. SaaS companies can take this opportunity to emphasize the value that the product has brought to the customer over time and communicate why prices are increasing.
What are the Main Reasons Behind Price Increases?
There are many reasons why SaaS businesses might want to increase their prices. Your team knows that your subscription prices can’t remain the same forever, not least because you need to stay in line with rising costs. Inflation means that the same goods and services cost more, and this is reflected in a price increase for your SaaS.
You might increase your prices because you want to expand the size of your team so you can continue to deliver a better service for your customers. If your business is successful and you need to support a growing customer base, it’s only natural that you’ll need to grow your customer success and support teams along with it.
The great thing about SaaS is that the product is always under continuous development. You might have upgraded your product to provide even more value for your customers and this should be reflected in the prices you charge. More features and functionalities require larger devevlopment teams to support them and customers will understand that a better product justifies higher pricing.
Announcing Price Increase to Customers?
There are many ways when announcing price increase to customers, and you’ll want to take advantage of them all to ensure that your customers are kept well-informed.
Send out an email
Email is still a traditional way to communicate with customers and an email blast is a great way to let existing customers know that your pricing is changing. You don’t want to make your email too long, but instead include the core reasons for the pricing increase and a link to contact your team if customers have questions. When your email hits their inbox your customers will learn more about the new changes.
Post on social media
Announcing your price increases on social media tells the world that your product is changing. This gives current and prospective customers transparency into your process. Making your pricing changes public shows that you are proud of your decision and willing to justify it to potential customers. The way you explain your price increase may even convince new customers of the value of your product and persuade them to give it a try.
Deploy an in-app message
In-app messages are a powerful way to reach SaaS customers because it appears the next time they log into the app. As long as customers are using your product regularly, you can make a short announcement about your price increase and then link to more information for those who want to know more. If customers are actively engaged in using your app, they are much more likely to accept a price increase.
Write an in-depth blog post
Blog posts can also be a great method to let customers know that your pricing is changing. When used in conjunction with the other methods, SaaS companies can provide much more detail about their pricing changes. This ensures that customers understand the reasons for higher prices.
Blog posts are also available to prospective customers of the brand. They can potentially learn about the increased value your company is offering. You can let customers know how the changes will impact them and help them decide whether they need to take any action.
Update your pricing page
Last but not least, it’s critical to update your pricing page to reflect the new prices. This is the page that customers are most likely to check when they become aware of the changes. Updating your pricing page increases transparency and provides a valuable resource for customers to consult if they want to see how the changes impact them.
Tips on how to Announcing Price Increase Without Causing Customer Churn
Give customers advance notice
Be considerate of your customers when announcing your price increases well in advance of the actual changes taking place. This gives them enough time to evaluate whether your product is still right for them. And they’ll appreciate the notice you give them. If the price increase is substantial then you might even want to give customers several month’s warning so they can build the change into their budgets.
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Showcase the value your product provides
Take the opportunity to remind customers of all they have achieved with your product. In order to keep delivering the same quality service, let them know that you have to slightly increase prices. If customers can connect your price increases to the value they have gained, they are more likely to accept them and continue with their subscription.
Open a dialogue with customers
When announcing your price increases, be prepared for a deluge of questions and comments. When letting customers know you are changing your prices, treat it as a dialogue where your support team takes the time to reassure customers and provide any explanations necessary. Customers will be happier about pricing changes if you hear their concerns and treat them as valid.
Restrict pricing increases to once a year
While you shouldn’t be afraid to implement price increases if necessary. Always make sure you put in the necessary thought behind why these changes are important. Regularly increasing your prices looks unprofessional and may lead to customers churning. It’s better to raise your prices more steeply once a year than have several smaller increases. Remember, customers don’t like change, and they’ll wonder why your company can’t stand by its prices.
How to Easily Create In-app Price Increase Announcements
With Churn360, you can deploy in-app notifications when announcing price increase so that customers are aware that something is changing. Using push notifications, you can send targeted messages to your customers that appear when they next log into the app.
These types of notifications are great for important information that you don’t want your customer to miss. Since you can be sure your customers will see them when they are using your app.
You can easily customize your notifications to ensure they are not intrusive but that customers still notice them. You can change the size and placement to create the experience you want for customers.
Raising your prices for SaaS customers may be daunting. But it’s an essential step if you want to ensure business growth and profitability. Customers will understand that they are not locked into their subscription prices forever. As long as you implement your changes with care and attention then churn shouldn’t be too much of a problem.
As always, the focus should always be on how these changes are going to benefit the customer. And how your SaaS business is going to keep delivering value. It’s a fact of life that costs always go up, and you should show customers why they should continue to be loyal and committed to your business.
Openness and transparency is key. If you are confident in your price increase, then making the announcement shouldn’t be too ominous. Expect for customers to have questions and comments. Take time to reassure them that they will still be getting a return on investment.