How to communicate a SaaS pricing increase

As a B2B company, you should be increasing the prices of your SaaS products each year. 

There are many reasons to do so, whether the market value has increased, you've added features and functionality, or you've even implemented a value-based pricing strategy. 

To communicate this effectively, follow these five tips and examples. 

5 rules to sharing SaaS price increases

1. Always provide your clients with a choice. For example, you can offer current customers the ability to lock in their current price with a pre-pay commitment.
2. Communicate the increase clearly and early. Set a reasonable deadline for any decision the client will have to make.
3. Your audiences are both customers and prospects. Align your communications and make sure to keep messaging consistent.
4. Don’t be sorry, and don’t blame factors beyond your control.
5. If possible, communicate in person or on a call, and not in email. 

How to communicate a price increase

Based on various research studies, there is a proven way to announce a price increase.

The approach combines the increased value/capabilities your service has provided over time, with anchoring that value at a higher price point than the actual price increase.

• Answer the “WHY” question.
  • Remind customers of the results they get from using your service (and reinforce they made the right choice selecting your service): “You’ve been able to achieve XYZ using service ABC”
  • Introduce/review new capabilities added since they signed up, and create an “Anchor” price point by “valuing” these additions at say 10%.
• Reward their loyalty.
  • Provide an incentive. While new customers have to pay 10% more, existing customers will only be asked to pay 5% more (a 50% discount).

Templates for your SaaS pricing increase announcement

Example 1

XXX is increasing our pricing to more accurately reflect the value users get from the solution. This change will help fund some great new features coming your way, just like the additions you have seen in the past years like for example [ABC and XYZ].

This pricing change will not affect your current payment schedule; you are grandfathered into your current pricing plan. As a current XXX customer, we want to keep you informed about the change. Here are the new pricing levels:

<Picture with Pricing Tiers next to eachother>

If you’re interested in upgrading to a different tier of service, we’d be happy to honor our previous pricing tiers through Wednesday, January 31st.

If you have any questions or concerns, just reply to this email. We will get back to you asap.
Thanks

Example 2

Dear Client,
We are very pleased to count you as one of our loyal customers. We are proud to help you achieve great results for your clients. In order to ensure we can continue to provide exceptional service, we’ll be increasing the rates on all our packages effective 1 June. Some of our packages will also be tweaked to reflect the services our clients most need.

You can see the new packages and pricing here [link]. We’ll be rolling this out to new clients from June 1, however, we wanted to give you the first month on your new package at the current rate [offer for longstanding clients] as a thank you for being such an amazing client!

This increase will enable us to continue to provide the quality and breadth of service you love. If you have any questions about the price increase or our new packages, don’t hesitate to let me know.

Yours Sincerely,

Example 3

XXX is increasing our pricing to more accurately reflect the value users get from the solution and make room for some great new features coming your way.

Want to lock in our old pricing before the change is made? You can upgrade your account we’ll honor our previous pricing tiers.

Here are the new pricing levels:

<Picture with Pricing Tiers next to each other>

For most customers, this is a modest price increase. For a few customers, this represents an actual decrease in pricing.

No matter how this price adjustment affects you, you’ll want to act now and get the best XXX pricing possible. Just upgrade your XXX account and if the old plan is cheaper for you, we’ll adjust your recurring charge to reflect the lower price.

If you have any questions or concerns, just reply to this email. We will get back to you asap.

Thanks

What’s next?

After sending out the letter, make sure you:

1. Follow up via phone after a few days to ensure clients understand what’s happening and how it impacts them.
2. Show confidence in your prices. Don’t let a client talk you down to their current rate or make you feel as though you don’t deserve to be fairly compensated for your time.
3. Demonstrate professionalism, even if a client gets angry. Emphasize the value you bring to their business and that price increases are just part of the game.