Price Increase Execution

Price increases are the single highest-margin growth lever available — and the one most companies execute poorly. A 10% price increase on a $20M ARR base adds $2M in revenue at 100% margin. No sales cost. No implementation cost. No support cost. Pure margin. But the execution determines whether you capture that margin or trigger a churn event. The difference is communication, timing, and the grandfathering strategy.

1. Communication: Lead with Value Never announce a price increase in isolation. Always pair it with the value that justifies it: new features, improved performance, additional capacity. "We have added X, Y, and Z capabilities, and we are adjusting pricing to reflect the expanded value" frames the increase as fair. "Prices are going up 10%" frames it as extraction.
2. Timing: Avoid Surprise Give customers 60-90 days notice before a price increase takes effect. Align increases with renewal cycles, not arbitrary dates. Never increase prices during a customer's contract term — only at renewal. The contract is a commitment. Honoring it is non-negotiable.
3. Segmentation: Risk-Adjusted Rollout Do not increase prices across the entire base simultaneously. Start with new customers (zero churn risk), then move to healthy accounts with strong usage and expansion (low risk), then address at-risk accounts individually. A staged rollout limits blast radius if the increase triggers unexpected churn.