Raising prices is one of the fastest ways to grow revenue and lower burn, and most small companies wait too long to do it. Done well, a price increase loses far fewer customers than founders fear. Done badly, with no notice and no reason, it can cause a wave of cancellations and angry emails.
When it's time to raise prices
- Almost nobody pushes back on price in sales conversations or trials.
- You've added real value since customers signed up: new features, better reliability, more integrations.
- Your costs have gone up, or your current price can't support the business. Use the break-even calculator to check.
- Competitors charge noticeably more for something similar.
Step 1: Raise prices for new customers first
This is the lowest-risk move and often the only one you need. Change the price on your pricing page for new signups and leave existing customers alone. Watch two numbers for a few weeks: trial-to-paid conversion and signup rate. If they barely move, the new price is fine, and you've learned something about your old one.
Step 2: Decide what happens to existing customers
You have three options:
| Option | What it means | Best when |
|---|---|---|
| Grandfather | Existing customers keep their price forever | You want zero churn risk and goodwill matters most |
| Grandfather for a period | Old price for 6–12 more months, then the new one | The most common middle path |
| Move everyone | Existing customers move to the new price with notice | The old price is unsustainable |
Grandfathering costs you revenue but earns loyalty, and early customers often become your best advocates. Many companies grandfather their first customers permanently as a thank-you and move everyone else after a notice period.
Step 3: Give real notice
For existing customers, give at least 30 days' notice, and 60–90 days for annual plans or business customers who need to budget. Never surprise people with a higher charge on their card. Check your terms of service and local consumer rules, too: some require specific notice periods.
Step 4: Explain why, briefly
Customers accept price increases much better with a reason. Be honest and specific: what you've added, what it costs to keep improving, and what stays the same. Don't over-apologise. A confident, short explanation reads better than a long defensive one.
Step 5: Offer a way to lock in
Give existing customers a choice that feels like a reward: switch to an annual plan at the current price before the change takes effect. Many will take it, which improves your cash flow and reduces churn at the same time.
Email template
Subject: A change to [Product] pricing on [date]
Hi [first name],
On [date], the price of [plan] is changing from $[old] to $[new] a month.
Since you joined, we've added [two or three real improvements], and we're
working on [what's next]. The new price lets us keep building at that pace.
Nothing changes until [date]. If you'd like to keep today's price for
another year, you can switch to annual billing before then: [link].
If you have questions, or this change is a problem for you, just reply.
I read every email.
[Your name]
[Product]What to expect
Most companies that raise prices sensibly see a small, short bump in cancellations, mostly from customers who were already close to leaving, and a lasting rise in revenue per customer. Measure it: compare churn in the two months after the change with the two months before, and compare revenue, not just customer count. Losing 3% of customers after a 25% price rise is a big win.
When someone pushes back
Reply personally. Some customers genuinely can't afford it, and keeping them at the old price for a while costs you little. Others just want to be heard. Either way, a human reply turns most complaints into goodwill.