I see many people overcomplicate things without any need.
In reality, marketing and growth are sometimes “easy”.
You don’t need to reinvent the wheel all the time - just “copy” what works for other companies, iterate a little bit to adjust it to your users and grow.
Some time ago, I had a chat with my friend Dennis Van der Heijden, Founder of Convert.com - one premium CRO tool.
Dennis grew to over $4m ARR in almost 11 years.
It’s not some “Wow” story we’re all used to hearing.
But let’s face it - 99.5% of companies worldwide don’t make $4m in ARR.
Anyway, one of the main drivers of Convert’s goal was a price increase.
Yeap, you heard it right.
Each year, Dennis was increasing Convert’s pricing by an additional 15-30%.
Eleven years ago, their “cheapest” package was around $50/mo.
Today, it’s $699/mo.
Let’s see how to get there with the Convert’s method.
How to properly increase your prices (without making your users angry)
Without doing it properly, the price increase can be a total failure. So pay attention to the steps below.
The first thing is to “justify” the price increase.
At the end of each year (prior to increasing prices), Convert always introduces a totally new set of features (all at once).
This justifies the price increase.
Second important thing is to offer an option to your customers
You shouldn’t force your customers to opt in for bigger plans.
That will just drive them crazy.
Instead, give them an option - if you want to use these new features, you can upgrade to the new plan.
If you don’t need them, feel free to stay on the same plan where you currently are. We’re totally ok with that.
Important things to keep in mind
To make sure everything goes smoothly, here are some things to pay attention to:
- You must have happy customers - you can easily check this with an NPS score. If the majority of your customers answer with 7 or 8, then it’s still not time to increase your pricing. See what can you do to move them to say 9.
- Don’t increase prices more than once a year.
- Don’t just focus solely on this - because even though you increase revenue, in the long-term you will lose customers (because of the churn), if you don’t actively work on bringing new customers. So experiment with different growth strategies and frameworks as well.
The bottom line
Increasing prices can be a nice add-on of 15-30% on your overall YoY growth. If you do it properly (as I explained above), it should work.
However, don’t forget about new user acquisition.
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