When Should You Raise Your SaaS Prices
The average SaaS company raises prices once every 2.5 years - even while delivering 40%+ more value annually. Every month you spend at a sub-optimal price is revenue you cannot recover. The compounding cost of waiting is the most expensive mistake in SaaS pricing.
Why this happens
Most founders treat pricing like a one-time decision made at launch. They set a number, it converts, and they leave it alone because changing it feels risky. But your pricing at launch reflected what you knew then - not what you've built since. A product that now saves a customer 10 hours a week was probably priced when it saved them 3. The gap between the value you deliver and the price you charge widens every quarter you don't revisit it.
What to check first
Before you raise prices, run this diagnostic:
- Is your inbound close rate above 30%? When more than 30% of inbound leads are converting, demand is exceeding supply. That's a pricing signal, not just a sales signal.
- Are customers describing you as "surprisingly cheap" or "great value"? Listen to your sales calls and support tickets. When buyers are surprised by how affordable you are, they're telling you there's room to move.
- Is your NPS above 40? An NPS above 40 means customers are getting more than they expected. That gap - between expected and delivered value - is where pricing headroom lives.
- Have you added significant features without adjusting price? If your product in 2024 does 3x what it did in 2022 and your price hasn't moved, you're subsidizing your customers' growth with your own margin.
How to fix it
Raise prices for new customers, not existing ones. This approach has three advantages: it eliminates churn risk from the raise, it creates a natural urgency for prospects who are on the fence, and it lets you measure the impact cleanly by comparing new-customer close rates before and after.
When you announce the change, frame it as an investment signal - you're charging more because you're investing more in the product. "We're raising prices for new customers in 30 days. Existing customers are locked at their current rate for life" is a message that builds loyalty, not anxiety.
A 20% price increase on new customers with a flat close rate tells you the market will bear at least that much - and you can test further from there. A drop in close rate of more than 5 percentage points tells you you've gone too far for now.
Grandfather your existing customers explicitly and permanently. That commitment is worth more in retention value than the revenue difference between their old rate and the new one.
Remove the guesswork
Knowing when to raise prices is one problem. Knowing exactly how much room you have - by segment, by plan, by customer type - is another. RightPrice runs 100+ synthetic buyer interactions against your pricing, returning a confidence score and optimal price range for your segment - so you walk into a pricing decision with data instead of intuition.
Related: If you're not sure whether your current prices are already too low, start with Am I Undercharging for My SaaS? - RightPrice ROI Calculator
