How to really screw up a price increase


Want to piss off your customers in a big way? Just tell them you’re increasing the monthly or annual recurring costs, and that everyone will have to pay the higher prices — including existing customers. 9 times out of 10, companies are smart about this. They grandfather in the increases, thus making long-time customers feel even more valued (since those customers keep the lower pricing). But there’s always that occasional company that ignores common sense and raises prices across the board. With such a shortsighted approach, they’re almost certain to cause enormous customer attrition.

When faced with the decision of where to apply a price increase, always put yourself in the customer’s shoes. People expect that recurring fees will remain reasonably constant over time, unless you can demonstrate that your underlying costs have changed significantly. Do yourself a favor and always grandfather in any increases in those monthly or annual fees. It’s just not worth the risk of driving away a big chunk of your customer base to maybe eke out a few more dollars from current clients.