
Ask HN: Dilemma on raising the price of SAAS product later - hemantshinde123
We are a smart electricity meter company and planning to launch our SAAS platform.
One of the strategies for increasing early adoption would be to have a lower subscription price.
However, we are not sure if we could increase the price of subscription later? Although it is technically possible, is it practical? Or would it be better to have a higher price to begin with and reduce it later? 
I would be glad to learn from the experiences of HN members.
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_448
> Or would it be better to have a higher price to begin with and reduce it
> later?

If you have to reduce price of a product without a new replacement product in
the market then that is a sign of trouble with business growth rather than a
strategy. It goes down hill from there. Only few companies have managed to do
this successfully and that too if they rely on commodity BoM whose prices go
down or if their service does not require frequent changes/upgrade once
developed.

One trick I learnt from a presentation few years ago was to set appropriate
price for a product such that you don't make a loss, but give(for a fixed
duration) a 100%(or whatever you decide) discount on that price for early
customers. That way the customers know what the actual price of that product
is and they are also aware that the discount is a fixed time offer. Now you
have three levers to play with: the actual product price, the discount and the
duration of the offer.

Another trick is to set the correct price for the product, but give some
freebies along with the product to get customers on board. The freebies are
one-time or for limited period.

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karmakaze
The other way than charging old/new customers different prices for the same
product(s) is to change the product 'bands' if that's possible. Rearrange the
limits and features between bands to come up with a new set of offerings. This
way the old pricing and new pricing can't be compared 1:1. Hopefully you can
do this by offering better packages/bundles rather than shuffling only to
change the prices.

This is a strategy used by auto makers for ages, the same model goes slightly
upmarket so that even if you stick with the same model you pay more. Sometimes
it a model will fall in price to make room for a new entry in-between. The
other way thing that's done is renumbering models so that you're coerced into
choosing the one slightly upmarket.

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hmahncke
Start with the price that you need to drive adoption and early usage. Later
raise the price as necessary as you understand the business and the value
proposition, but only for new customers. Keep all the original subscribers
around on a "founding member" plan at the original price.

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AnonC
Raising prices always results in some amount of pain and frustration for some
set of users. You could just start with calling your low price as an
introductory offer that will be available for a limited period. You could also
give extended credits to paying users who refer others who become paying
users. Have the introductory price locked in for life for those who get in
early.

Bonus points if you can quantify what the limited period would be, instead of
leaving it vague. This is how most of the good sellers do (be it a SaaS or
some other content or service).

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keiferski
You can raise prices for new customers at any time. Just keep the price the
same for all old customers.

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codegeek
Grandfather existing customers and raise price for new customers. do it often,
as needed. Another strategy is to introduce "new plans" at higher cost.

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seanwilson
Can you not start lower then raise it later where people on the lower price
keep the same price? Not sure what the issue is that way around.

