2023 PLG Price Increases - 47.43% on Average
2023 PLG Price Increases - 47.43% on Average
👋 Hi and welcome to PLG Monetized newsletter. Every ~week we explore how leading SaaS companies leverage monetization to drive growth through self-serve sales.
Price increases are a sure way to increase MRR in SaaS. In this week’s edition, we take a look at the stats and talk about some of the best practices.
Let’s Start with the Numbers
We analyzed 3021 B2B SaaS companies since the beginning of the year.
How did we get the data?
We took screenshots of the pricing pages at the beginning of the year and then again around beginning of March 2023. Then manually went through the ones that changed.
12 out of 3021 increased prices so far…
The price increases range has been quite vast (from as little as 3.57% to over 200%).
On average though, the prices increases were 47.43%
On average, the price increases were 47.43%. Although, the median was 30.88%.
What’s interesting though, is that companies that raised prices tend to skew towards the ones that are in the range of 11-50 employees.
Now, if we compare it to the overall dataset distribution, clearly 11-50 is the biggest chunk, but 11-50 was still a clear outlier.
PricingSaaS.com Dataset - March 1st, 2023 (n=3021)
Companies in 11-50 range have been the most active in terms of price increases
Some Examples
Biggest price increase: Calendar.com
Smallest Price Increase: glasscubes
For a full list of pricing changes, we put this handy Google Sheet for you.
Best Practices
OK… so before you rush off and start raising your prices, here’s a few things to consider:
Model MRR Impact vs. churn and conversion impact. Basically, for every % you raise your prices, you can expect a relative increase in churn and decrease in conversion rates. So figure out the sweet spot for optimizing for MRR and LTV (lifetime value). At the end of the day, it will be a guess, but you can run different scenarios.
Communicate - externally and internally!
For internal folks, make sure everyone is aware of what's going on. Finance needs to know, customer success, sales, etc.
For customers, you need to communicate the value your product continues to deliver to them. Netflix does this really well. They are the masters of raising prices, so look at their emails.
Playbooks - provide your teams with playbooks. Some customers will not be happy. You may also have some prospects mid flight (where they saw one price and will not be presented with a different one). Consider all of these cases and have a playbook(s) for your customer facing teams.
To grandfather or not - this is a big one. Are you raising prices for new customers only? What happens to existing customers…?
If you are keep them on old pricing - this will have smaller impact on overall MRR. Raising pricing for existing customers has immediate meaningful MRR impact.
If you raise for existing, remember that anyone on annual plan will not see the price increase till their renewal date. So that means it will take you about 12 months to fully roll out this change.
Additional Resources
PricingSaaS.com - B2B Pricing Tracker. Sign-up to get free email alerts, to get notified when your peers and competitors change their pricing.
Do you need help with pricing and monetization? Our boutique agency, Buyerson Inc. can help. Our services range from weekly advisory sessions to full blown pricing studies. Get in touch to schedule a free call.