What happens when you raise your prices?
In the stories founders tell, revenue usually goes up. Nearly half lost some new customers, and some existing ones cancelled. Almost nobody went back. Cutting prices changed nothing more often than not.
Syed Asif Sultan · every number regenerable from the repository
Short answer: you’ll probably make more money, even if you lose a few customers.
I read what founders said after they raised their prices. Revenue went up for 34 of the 39 who said what happened to it. The typical raise was more than double the old price.
It wasn’t painless. Nearly half of the ones who said lost some new customers. Most who said saw some existing customers cancel. But almost nobody went back to the old price.
One big caveat up front. People mostly write about price rises that worked. So this is what happened in the stories, not the odds it will work for you.
Here’s where it comes from. I read 306 posts from founders in seven subreddits (r/SaaS, r/SideProject, r/startups, r/indiehackers, r/Entrepreneur, r/microsaas and r/buildinpublic) that mention raising or cutting a price. 149 were founders who had actually changed the price of their own product. 102 raised it. 40 cut it. I left out 23 more that were mainly selling something.
How big the raises were
47 founders gave the price before and after. The typical one multiplied the price by 2.4. A quarter went up by less than 67%. A quarter more than tripled it.
For monthly plans, the typical price went from about $20 to about $54. Plenty of these founders had started very cheap. A quarter were charging under $6 a month before the raise.
What happened after
Most posts don’t report everything. So each row counts only the founders who said.
| After raising the price | Founders who said | What they said |
|---|---|---|
| Revenue | 39 | 34 up, 1 same, 4 down |
| New paying customers | 31 | 13 up, 4 same, 14 down |
| Share of visitors or trials who bought | 13 | 8 up, 3 same, 2 down |
| Existing customers cancelling | 27 | 20 more, 7 no change or fewer |
| Complaints | 19 | 11 yes, 8 no |
| Went back to the old price | 76 | 3 yes, 73 no |
| How the founder felt about it | 71 | 65 glad, 2 mixed, 4 regret |
Revenue mostly went up. 34 of 39. That’s the main finding.
New customers were a coin flip. 13 got more, 14 got fewer. More customers after a price rise sounds odd. Some of those founders changed other things at the same time, like the page or the product.
Some existing customers left. 20 of 27 who said saw more cancellations. Some founders avoided that by keeping existing customers on the old price. 16 of the 35 who said did that.
Regret was rare. 4 of the 71 who gave a view regretted it. One founder doubled a $29 plan to $59. Signups fell 70% and revenue went down. They settled on $39 and took four months to get back to where they were.
What happened when founders cut their price
40 founders went the other way. The typical cut took the price to about 39% of what it was.
It helped less than you’d hope. 14 said what happened to new customers. 8 saw no change, and 6 got more. Only 5 said what happened to revenue. Of the 11 who said what happened to their conversion, 6 saw no change.
That fits what I found in How long does it take to get your first customer? When nobody is buying, it’s usually because nobody has seen the product. A lower price doesn’t change who sees it.
So should you raise your prices?
If people are already paying and nobody has ever said it’s too expensive, probably yes. Almost every founder who did it and told the story was glad.
If nobody is paying yet, a price change won’t fix that. Up or down. Work on who sees it first.
What I’d do
Raise it for new customers first. Keep existing customers on their price for a while. You get the upside without the cancellations, and you learn what new buyers will pay.
Go up more than feels comfortable. The typical raise here was 2.4x, and most of those founders were glad. A 10% rise won’t tell you much.
Watch revenue, not signups. You’ll probably get fewer new customers. That’s fine if each one pays more. Look at money in after a month.
Don’t cut your price to fix slow sales. More often than not it changed nothing here. Find more of the right people instead.
I looked at what founders do and don’t charge in How much do indie founders make?
What I can’t tell you
The stories lean toward success. A founder whose price rise flopped is less likely to write a post about it. So I can’t tell you the odds. I can only tell you what happened to the ones who shared.
Most posts don’t report every result. Each row above counts only the founders who mentioned that thing, so the numbers are small.
Founders often changed other things at the same time. A new page, a new feature, a new plan. I can’t pull those apart from the price.
A second reader went through a random 31 of the posts without seeing the first reading. They agreed on whether a post counted 29 times out of 31, and on what happened to revenue 18 times out of 19. They agreed less on what happened to new customers (15 of 19), so treat that row as rough.
How I did it
The posts: every post since 1 January 2022 in the seven subreddits above, from the Arctic Shift Reddit archive. A small model sorted each one: is the poster building something of their own? The method is in Building got easy. Getting anyone to care didn’t.
The sample: every post, one per founder and with at least a few sentences of text, that says something like “raised my price”, “doubled our pricing” or “cut the price”. 306 in all. I read each in full. I kept founders who had actually changed their own product’s price, not ones thinking about it. I only recorded results the post states. I left out posts that mainly sell something, including a run of near-identical posts promoting the same pricing toolkit.
Cite as: GTM for One (gtmforone.com), “What happens when you raise your prices?”, https://www.gtmforone.com/blog/what-happens-when-you-raise-your-prices.
I’m building GTM for One for the step most founders skip. Working out who would actually buy what you’re making, and writing to them one at a time.
We wrote this while building GTM for One: type your domain, it finds your buyers, verifies their addresses, and writes every email. You read them and hit send.
See it on your own domain