SaaStr's 6 rules for SMB price increases without mass churn

The Gist

• Never raise prices during hypergrowth (30%+ YoY)
• Add 2x value before hiking prices to justify cost
• Premium tiers create upsell paths without alienating base users
• Test increases on 5-10% of customers before full rollout

• Price increases are better suited for when growth slows or you’ve hit a more mature stage.
• Pair any price increase with clear, tangible improvements to justify the hike.
• Introduce a new premium plan with advanced features instead of raising prices across the board.
• SMBs will churn when you raise prices, so test increases on a subset of customers first.
• Annual price increases can work well at scale if value is consistently added.
• Grandfather early customers into early pricing to maintain loyalty.

• Focus on adding customers and increasing value rather than hiking prices if growing at 30%+ annually.
• Pair price increases with clear, tangible improvements to justify the hike.
• Test price increases on a subset of customers or new sign-ups before broad rollout.
• Consider grandfathering early customers into early pricing to maintain loyalty.

• 30%+ annually (Growth rate where focus should remain on adding customers rather than hiking prices.)
• 5-6% annually (Recommended modest price increase benchmark.)
• 3-4 months (Recommended notice period before implementing price increases.)