When I launched Feature Upvote, my B2B SaaS, in 2017, the price was $29/month, with a 20% discount for paying yearly. I chose that price arbitrarily, but also because it is what I felt I would pay for a similar service.
After hearing repeatedly that developers who start businesses need to charge more, I wanted to experiment with a small increase.
I delayed doing this until I had enough new customers each month to really be sure of the price change’s effect.
In January 2019 I put the price up to $35/month, a 20% increase.
Why such a small increase? I knew in theory that I should charge significantly more, but in practice I wasn’t confident about it. I am, after all, still a developer .
What happened? The conversion rate stayed roughly the same. That is, the same number of new customers per month, but each paying more.
Nobody complained. Ever. Not a single person questioned the change in our pricing.
A year later, in January 2020 I got bolder. I put the price up to $49/month, a 40% increase.
What happened? The conversion rate initially dropped a little but not much. It might have just been statistical noise, or the post-Christmas lull.
I was getting fewer new customers, but they were paying more. Pricing experts say that customers who pay more tend to remain customers longer, resulting in a much higher customer life time value, so this seemed okay.
Then the pandemic started and we were all in shock and sales stalled for a little while. So it was really hard to tell the true effect of the price increase.
But now, six months later, I’m signing up more new customers than ever, at the conversion rate we had before the price increase.
As with the first price change, nobody complained. Ever.
What about existing customers?
I’ve never put up prices for existing customers. I’m okay with people getting the price they started with indefinitely. It is the way I’d want to be treated as a customer. Anyway, within a couple of years, as existing customers churn, the “problem” of older customers paying less will simply go away.
Has the customer base changed?
Yes. As the price goes up we tend to get larger organisations as customers. Unfortunately, they are also more likely to ask for custom legals, T&Cs, and security audits. In all cases, I say no. That may change in the future.
What did I tell existing customers about the price change?
Nothing. I probably should have, but it fell off my to-do list.
To make sure existing trial customers weren’t shown one price and charged another, I did the following:
- December 2019: change the prices listed on our pricing page, but still charge new customers the old pricing.
- January 2020: start actually charging the new prices.
Other pricing plans
I have bootstrapper pricing at $19/month (with a 20% discount when paying yearly). I’ve had this pricing since the very start, and never changed it. It is an easy way to answer would-be customers who write “I want to use Feature Upvote, but it is too expensive for me.”
For charities or non-profits who ask, we have a plan that’s 25% cheaper. Almost no-one asks for this plan. I don’t know why, because it is featured on our pricing page.
Just about any Open Source project that asks can use us for free. There are a couple of stipulations, but I tend not to check too carefully.
Do I charge enough?
I don’t know. I’m content with the pricing now, and have no plans to change it in the near future. Next year I might add a much more expensive enterprise plan, for those people who ask about custom legals, T&Cs, and security audits.