Anybody here successfully raised prices without a major blowback? I'd love to hear how you did it (as opposed to these clowns).
If you're raising prices because of a profit issue, then you are prepared to lose some customers (the least profitable ones) so you can better serve the ones that give you a profit.
Which is why I asked for strategies that worked, not "Don't."
Also, in a company which is growing rapidly, the average price per month paid at any plan level is going to quickly converge on your currently published price per month. That is another factor which suggests using Joel's solution, if you're growing.
Not everyone thinks saturation is economically viable, or even desirable. And honestly, in a market like SaaS web apps, it would be very hard to achieve, even at rock bottom prices. A help desk tool, no matter how crappy, is not a true commodity. One will serve a given customer better than another.
Also: I wasn't asking about ZenDesk, I was asking for other examples.
In my consulting business, I raised my rates from $75 to $300 in a couple of years. I wasn't going for saturation, and I didn't grandfather at all. But that is a 1:1 relationship with clients, and I radically changed my business over that time. I also raised the price of my ebook package from $24 to $39 but that was not the same customers, being that it was a one-time sale.
I am a big believer in raising prices. I like more money from fewer customers, which means I can simultaneously work less, and have higher quality interactions with my customers. It's a win/win/win.
My SaaS is one of the most expensive in our category, and for good reason. We're growing at a nice pace, too. I want to think about how we might raise prices, if we decide to, and for future products that I am planning.
And that is why I wanted real examples. Which other people were able to provide me.
Thanks, other commentors.
Nobody in this thread ever said "don't raise prices", so I don't really understand why you're preaching the price-raising religion so hard. Fine, yes, raise prices, but grandfathering existing users might be an easy way to do so without causing a backlash that might hurt your ability to acquire new customers at the raised prices. It's certainly not such a stupid idea as to be "not really an answer", like you claim.
It was a success for us. Here's why:
1. It was early on - just a few months after our public launch.
2. We offered a limited free version in conjunction with the price increase.
3. We lost some customers, but they were only worth max $10 per month. We were able to work with some of those customers to setup custom plans that met their needs.
4. The customers we did keep went from being worth $50 - $100 per month to $100 minimum per month.
5. Our major competitors charge thousands per month, so we were still absurdly cheaper than them.
It's really not that hard.
Although I have no clue how they managed to do so :)