I love the detailed writeup, but it seems like they made this a lot harder than it needs to be.
Most SaaS companies, when they raise prices, will announce that new customers will pay the new price starting in X days, where X is usually 30 or 60. This gives people on the fence a chance to jump on board at the lower price, and lets current customers keep their pricing.
Then they tell their current customers that their existing price will be grandfathered in for X months. If you make X big enough, most people don't really notice, because when you announce it, it seems far away, and when it happens, they probably don't even check their subscriptions that often.
The whole credit thing felt like a ploy to raise some immediate cash and create artificial lock in, and after this post, it seems like it didn't even really help them all that much.
I found their approach refreshing open, especially when you compare it to cPanel's recent price hike debacle. That was a good example of how not to do it,
- Announce price increase for new users to existing customers. Allow them to expand or sign longer term contracts to lock in the current price for X days.
- Apply new pricing to new customers & expansions.
- Migrate existing customers closer to new pricing on a timeline. I'm a sucker for heirloom pricing for your oldest customers :)
Understand where you are in the growth curve though; if you're growing 200% YoY and your early customers are thought leaders, then focus on new customer pricing and don't worry about raising prices. Oh, and whenever possible sell differentiated, mission critical products to businesses whenever possible.
Most SaaS companies, when they raise prices, will announce that new customers will pay the new price starting in X days, where X is usually 30 or 60. This gives people on the fence a chance to jump on board at the lower price, and lets current customers keep their pricing.
Then they tell their current customers that their existing price will be grandfathered in for X months. If you make X big enough, most people don't really notice, because when you announce it, it seems far away, and when it happens, they probably don't even check their subscriptions that often.
The whole credit thing felt like a ploy to raise some immediate cash and create artificial lock in, and after this post, it seems like it didn't even really help them all that much.