Raising and restructuring.
WHY IT IS NECESSARY
Costs rise, the product improves, and early prices are usually too low.
WHAT TO DECIDE
Whether existing customers are affected.
WHAT THE OPTIONS ARE
New prices for new customers only Existing customers moved after notice Existing customers kept at their price indefinitely
WHAT GRANDFATHERING PROVIDES
Goodwill, and no cancellations.
WHAT IT COSTS
A growing group paying below current rates, complicating everything.
WHAT TO DO IF RAISING EXISTING PRICES
Give substantial notice Explain what has improved Offer a period at the old rate Handle objections individually
WHY NOTICE SPECIFICALLY
Surprise increases produce cancellations that the increase itself would not.
WHAT TO EXPECT
Some cancellations, and less revenue loss than feared.
WHAT TO NEVER DO
Change prices without telling anyone Increase mid-term Apply increases inconsistently without reason
WHY CONSISTENCY MATTERS
Customers discuss prices with each other.
WHAT TO PREPARE
A written explanation, and answers to the obvious objections.
WHAT TO MEASURE AFTERWARDS
Cancellations, and revenue net of them.
WHAT TO DO WITH CUSTOMERS WHO OBJECT STRONGLY
Decide once what you will offer, and apply it consistently.
