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At the end of 2015, we raised prices for our SaaS app, Noko Time Tracking — and introduced a new pricing model with per-seat upgrades.
To date, we’ve migrated 60% of our existing customers to the new pricing… by their own choice! That was after really just one promotional push.
(Aaand as I wrote this, I realized we never revisited the remaining 40%. We will be doing that soon!)
Before you dive in, be sure to read the story of how we did it. And you can learn my strategy for raising prices without tears.
Here are the actual emails we sent out to our existing customers to:
- Pre-announce the change — because nobody likes a surprise with a dollar sign
- Reassure them that nothing would change for them if they didn’t want it to — we offered indefinite grandfathering for all existing accounts
- Entice them to upgrade to the new plans — to persuade our existing plans to upgrade, we offered them goodies that only the new plans would include
NOTE: the emails below contain Liquid (conditional code) which let us output slightly different offers to slightly different customers, depending on size.
Email 1: “Noko Price Plan Updates”
The initial goal for this email is to let our customers know a change is coming — nobody likes a price surprise — and to relieve the immediate anxiety everyone feels when they see an email about a price change.
Second, I wanted to set the scene for why we’re raising prices: all the new features that they’ll love. That’s value. That also shows our best customers (the ones who write us often because they use Noko all the time) that we are listening to them.
I explicitly did not include dollar amounts in this email because it’s all about paving the way, cultivating the right expectations. That would be too much info at once.
And, to reduce cognitive load, I outlined a couple scenarios that might reflect their current reality to help take the decision-making load off.
Here’s the raw email:
Hi there, {{customer.first_name}}!
Thank you SO much for being our customer. Hopefully your holiday
season is off to a great start.
Ours sure is… Noko development is going along at a good clip thanks
to our growing team. And Noko is turning 6 years old this year!
We're kinda freaking out (in a good way)! We couldn't do it without
you. Literally. (And I do mean literally literally, not figuratively
literally. ;)
Now I'm writing you specifically because, for the first time in 6
years, we're changing the way that pricing works.
FIRST: Don't stress out — you don't have to do anything or pay any
more. :)
Keep your plan as it is, and nothing changes. Not at all! We value
your business, and your trust, and would never surprise you with
increased costs.
WAITING TO UPGRADE? If you are on the edge of your current plan and
need a couple more user seats but have been waiting to upgrade, then
you will save money with either upgrading before pricing changes or
with the new pricing plan.
GROWING & CHANGING? If you run a large or growing team and need to add
and remove extra user seats on a regular basis, great news — it's
getting instant and easy to manage.
This is part & parcel of many upgrades we're developing for larger &
growing teams, like more permission settings, timesheet approval,
recurring budgets and more.
Too much to take in right now? Don't worry about it. We just wanted to
give you as much of a heads' up as humanly possible.
We'll be emailing you Friday with specific pricing details and a
special offer for your plan and your team size, to help you make an
informed decision!
Thanks again for your business. We appreciate it! :)
Cheers,
Amy Hoy
Noko's Designer
Email 2: “Noko pricing: recommendations and special offer”
This is the big email — we tailored it to account sizes, and laid out all the pricing, and the extra incentives to sign up soon (free seats, scaled by account size). We offered at least one free seat to all customers.
My explanation of how seats work was a direct response to the semi-regular emails we got from our valuable accounts asking if they really had to jump a plan level just to add one more person. (And typically we’d give them at least a few freebies. But they had to email us! What a pain for all involved.)
For folks who didn’t want to have the new pricing plans, but were about to run out, we even suggested they upgrade to the “old” plan before it disappeared so they could lock in the price.
Hi again, {{customer.first_name}}!
Last Tuesday I wrote you about how we'll changing the way our pricing
works in the first time in 6 years. Today I'll write you with more
details, and a special offer for you for being our customer!
FIRST: Don't stress out — you don't have to do anything or pay any
more and you can keep your current pricing plan forever. :)
The new pricing is strictly opt-in. Plans will be per-seat pricing, a
feature a lot of our customers requested—you'll be able to have an
unlimited number of users and pay-as-you-go for only the number of
users you need:
Solo plan: $19/month, 1 seat included, extra seats $14/month
Team plan: $49/month, 5 seats included, extra seats $10/month
Organization plan: $199/month, 25 seats included, extra
seats $8/month
{% if customer.team_size > 1 %}
Inviting a person will add to the seat count, archiving a person will
deduct. It's instant and automatic—no longer does the account owner
(you!) have to be bothered if the user limit is reached and an admin
needs to quickly add a new team member or freelancer!
We also offer custom pricing if you need more than 50 or so users now
or in the future—please talk to us (you can just reply to this
email), and we'll help customizing a plan that works great for you.
{% endif %}
The Team and Organization plans will also come with extra features
over the Solo plan, as we roll them out over the next year. As with
the current plans, you'll be able to pre-pay for a year in advance,
and get a free month of service.
We will launch the new plans on the weekend just after Thanksgiving,
on Saturday, November 29. At that point, only the new plans will be
available if you want to switch your plan.
If you expect to grow beyond your current plan size (you have {% if
customer.remaining_users > 1 %}{{ customer.remaining_users }} seats{%
elsif customer.remaining_users == 1 %}1 seat{% elsif
customer.remaining_users == 0 %}no seats{% endif %} left on your
current plan), we recommend that you upgrade to the next higher plan
now, to get the locked-in pricing.
{% if customer.team_size < 5 %}
As a special offer, we will add a free seat to your account if you
upgrade now to the next higher plan, or upgrade to the new pricing
before the end of year. (Please contact support to claim the free seat
after you upgraded! You can keep these free seats forever, unless you
downgrade to a lower plan level again).
{% elsif customer.team_size < 15 %}
As a special offer, we will add 3 free seats to your account
if you upgrade now to the next higher plan, or upgrade to the new
pricing before the end of year (Please contact support to claim 3 free
seats after you upgraded! You can keep these free seats forever,
unless you downgrade to a lower plan level again).
{% else %}
As a special offer, we will add 5 free seats to your account if you
upgrade now to the next higher plan, or upgrade to the new pricing
until the end of year. (Please contact support to claim the 5 free
seats after you upgraded! You can keep these free seats forever,
unless you downgrade to a lower plan level again)
{% endif %}
[LINK] Go to your billing page to review or upgrade your current plan.
And don't forget, if you don't do anything, your pricing will stay as-
is, forever. Of course you can still switch to another pricing plan at
any time later.
If you have any questions about this—please don't hesitate to ask,
we're here to help. Just hit reply or call up the chat box on any
Noko page.
Thanks again for your business. We appreciate it! :)
Cheers,
Amy Hoy
Noko's Designer
Third email
We sent a third email to each customer that calculated their new cost, and especially noted if the customer in question would save money under the new pricing scheme. Quite a few would! And nothing builds trust like pointing out a cheaper option. That’s how you play the long game.
Personal followup
We also personally reached out to accounts we identified as either A) very large accounts or B) accounts on the edge of the limits of the old plans (who might hesitate to upgrade). While they were individually sent, I’m trying to dig up example emails for your edification.
My strategy for writing excellent emails
The most important thing for me is that every customer feels we are talking directly to them, and considering their needs.
In email #1 and #2, for example, I went out of my way to tell our customers that they did not have to do anything or pay any more.
Where possible, I addressed the details to their specific account level.
The pains I outlined are pains we know many of our customers experienced. (The pricing plan is in response to customer needs, not just a money grab!)
And all our emails come from an inbox we monitor for support, and we actively encourage customers to write us. A no-reply address says “fuck you” to your customer.
FURTHER READING: How to Raise Your SaaS Prices
There's more where that came from
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