This ONE Thing Will Grow Your SaaS Faster Than Anything Else...

in this video I'm going to tell you in this video I'm going to tell you about the one thing that will grow your about the one thing that will grow your about the one thing that will grow your SAS faster than anything else and that SAS faster than anything else and that SAS faster than anything else and that one thing is pricing pricing is the one thing is pricing pricing is the one thing is pricing pricing is the biggest lever in your SAS business biggest lever in your SAS business biggest lever in your SAS business having invested in more than 150 SAS having invested in more than 150 SAS having invested in more than 150 SAS companies I've seen it over and over companies I've seen it over and over companies I've seen it over and over again that when a Founder raises their again that when a Founder raises their again that when a Founder raises their prices they see their growth accelerate prices they see their growth accelerate prices they see their growth accelerate and to give you just one recent example and to give you just one recent example and to give you just one recent example of that take a look at this graph from a of that take a look at this graph from a of that take a look at this graph from a Tiny Seed company that asked to remain Tiny Seed company that asked to remain Tiny Seed company that asked to remain anonymous but he generously offered to anonymous but he generously offered to anonymous but he generously offered to share this graph with his Revenue growth share this graph with his Revenue growth share this graph with his Revenue growth and a couple milestones in his company and a couple milestones in his company and a couple milestones in his company getting into Tiny Seed and how it getting into Tiny Seed and how it getting into Tiny Seed and how it accelerated his growth and then look at accelerated his growth and then look at accelerated his growth and then look at that increase after he raised his prices that increase after he raised his prices that increase after he raised his prices so in this video I'm going to talk about so in this video I'm going to talk about so in this video I'm going to talk about why this works and then I'm going to why this works and then I'm going to why this works and then I'm going to talk to you about how to think through a talk to you about how to think through a talk to you about how to think through a price increase and how to raise prices price increase and how to raise prices price increase and how to raise prices well but I want to give you one more well but I want to give you one more well but I want to give you one more example of a Founder who raised his example of a Founder who raised his example of a Founder who raised his prices and dramatically accelerated his prices and dramatically accelerated his prices and dramatically accelerated his growth the company is jimes at Jim growth the company is jimes at Jim growth the company is jimes at Jim desk.com and the founder is Iran desk.com and the founder is Iran desk.com and the founder is Iran galperin I quoted Iran in my book The galperin I quoted Iran in my book The galperin I quoted Iran in my book The SAS Playbook about his experience SAS Playbook about his experience SAS Playbook about his experience raising his prices for for gym desk so raising his prices for for gym desk so raising his prices for for gym desk so Iran had been running gym desk for 5 or Iran had been running gym desk for 5 or Iran had been running gym desk for 5 or 6 years its Gym and Fitness Studio 6 years its Gym and Fitness Studio 6 years its Gym and Fitness Studio management software during that time he management software during that time he management software during that time he had built it into quite a force that had had built it into quite a force that had had built it into quite a force that had a significant foothold in the market and a significant foothold in the market and a significant foothold in the market and through some encouragement from our tiny through some encouragement from our tiny through some encouragement from our tiny SE pricing Playbook he decided to raise SE pricing Playbook he decided to raise SE pricing Playbook he decided to raise his prices pretty significantly in some his prices pretty significantly in some his prices pretty significantly in some cases by more than 50% and often this cases by more than 50% and often this cases by more than 50% and often this decision is much more about emotion than decision is much more about emotion than decision is much more about emotion than it is about flipping the switch it is about flipping the switch it is about flipping the switch technically it's not that hard to raise technically it's not that hard to raise technically it's not that hard to raise your prices but that fear of a backlash your prices but that fear of a backlash your prices but that fear of a backlash from customers that you built a from customers that you built a from customers that you built a relationship with is really scary and so

relationship with is really scary and so relationship with is really scary and so Iran raised prices and I have a quote Iran raised prices and I have a quote Iran raised prices and I have a quote from him he said most of our customers from him he said most of our customers from him he said most of our customers responded very well to the price responded very well to the price responded very well to the price increase some of them even wrote back increase some of them even wrote back increase some of them even wrote back and said congrats you deserve a raise in and said congrats you deserve a raise in and said congrats you deserve a raise in the end only a few of gym desks more the end only a few of gym desks more the end only a few of gym desks more than 600 customers left as a result of than 600 customers left as a result of than 600 customers left as a result of the price increase the company's mrr the price increase the company's mrr the price increase the company's mrr growth went up by 70% and its average growth went up by 70% and its average growth went up by 70% and its average revenue per customer has continued to revenue per customer has continued to revenue per customer has continued to climb with this increase in Revenue Iran climb with this increase in Revenue Iran climb with this increase in Revenue Iran was able to really accelerate the growth was able to really accelerate the growth was able to really accelerate the growth of the business so with the graph that I of the business so with the graph that I of the business so with the graph that I showed you and the story about Jim desk showed you and the story about Jim desk showed you and the story about Jim desk I hope I've intrigued you enough to I hope I've intrigued you enough to I hope I've intrigued you enough to think about pricing and the idea that think about pricing and the idea that think about pricing and the idea that most of us are underpriced and if you most of us are underpriced and if you most of us are underpriced and if you stick around till the end of this video stick around till the end of this video stick around till the end of this video I'm going to tell you the mistake I see I'm going to tell you the mistake I see I'm going to tell you the mistake I see many timid Founders make that renders many timid Founders make that renders many timid Founders make that renders the rest of the advice I'm about to give the rest of the advice I'm about to give the rest of the advice I'm about to give you kind of pointless the fact is most you kind of pointless the fact is most you kind of pointless the fact is most of us underprice our product we don't of us underprice our product we don't of us underprice our product we don't think it's very valuable we put a few think it's very valuable we put a few think it's very valuable we put a few months into coding it and then we say months into coding it and then we say months into coding it and then we say well I think I could charge $20 a month well I think I could charge $20 a month well I think I could charge $20 a month when in fact this may be worth $200 a when in fact this may be worth $200 a when in fact this may be worth $200 a month or $2,000 a month to the right month or $2,000 a month to the right month or $2,000 a month to the right customer Tiny Seed I've mentioned it a customer Tiny Seed I've mentioned it a customer Tiny Seed I've mentioned it a couple times it's the startup Exel Ator couple times it's the startup Exel Ator couple times it's the startup Exel Ator that I run at the beginning of many of that I run at the beginning of many of that I run at the beginning of many of our batches I will ask who here thinks our batches I will ask who here thinks our batches I will ask who here thinks they are underpriced and usually they are underpriced and usually they are underpriced and usually somewhere between 2/3 and 80% of the somewhere between 2/3 and 80% of the somewhere between 2/3 and 80% of the founders raise their hand so something founders raise their hand so something founders raise their hand so something that I talk about a lot is increasing that I talk about a lot is increasing that I talk about a lot is increasing pricing the first thing I want to talk pricing the first thing I want to talk pricing the first thing I want to talk about is why is it so effective there's about is why is it so effective there's about is why is it so effective there's a number of factors that are in play a number of factors that are in play a number of factors that are in play here but often times as you raise prices here but often times as you raise prices here but often times as you raise prices if you're able to go up Market you will if you're able to go up Market you will if you're able to go up Market you will reduce turn which gives you a healthier reduce turn which gives you a healthier reduce turn which gives you a healthier business but even if you don't go up business but even if you don't go up business but even if you don't go up Market when you raise prices the first Market when you raise prices the first Market when you raise prices the first order effect is that you make more money order effect is that you make more money order effect is that you make more money if you raise prices 20% even if you have

if you raise prices 20% even if you have if you raise prices 20% even if you have some cancellations you're probably going some cancellations you're probably going some cancellations you're probably going to make 15 plus% more per month if you to make 15 plus% more per month if you to make 15 plus% more per month if you raise prices 50% as some folks wind up raise prices 50% as some folks wind up raise prices 50% as some folks wind up doing you dramatically increase the doing you dramatically increase the doing you dramatically increase the amount of Mr coming in and you increase amount of Mr coming in and you increase amount of Mr coming in and you increase your growth at the same time assuming your growth at the same time assuming your growth at the same time assuming you aren't pushing your prices too high you aren't pushing your prices too high you aren't pushing your prices too high there is a point where you can push them there is a point where you can push them there is a point where you can push them too high and start losing market share too high and start losing market share too high and start losing market share but it's very rare that Founders get but it's very rare that Founders get but it's very rare that Founders get there and frankly you'll know it when there and frankly you'll know it when there and frankly you'll know it when you see it if you raise your prices too you see it if you raise your prices too you see it if you raise your prices too far it's going to be pretty obvious far it's going to be pretty obvious far it's going to be pretty obvious pretty quickly and you will be able to pretty quickly and you will be able to pretty quickly and you will be able to roll that back so the first order effect roll that back so the first order effect roll that back so the first order effect of raising prices is you have more money of raising prices is you have more money of raising prices is you have more money to invest into staff into marketing or to invest into staff into marketing or to invest into staff into marketing or maybe to pull out into your pocket just maybe to pull out into your pocket just maybe to pull out into your pocket just to be more profitable but the second to be more profitable but the second to be more profitable but the second order effect of raising prices is you order effect of raising prices is you order effect of raising prices is you can invest in so many more marketing can invest in so many more marketing can invest in so many more marketing approaches the higher your budget so approaches the higher your budget so approaches the higher your budget so there's a whole swath of marketing there's a whole swath of marketing there's a whole swath of marketing approaches that are unavailable at a approaches that are unavailable at a approaches that are unavailable at a $500 annual contract value that become $500 annual contract value that become $500 annual contract value that become available at $7,000 a year and so things available at $7,000 a year and so things available at $7,000 a year and so things like cold Outreach or doing in-person like cold Outreach or doing in-person like cold Outreach or doing in-person events or even doing a heavy sales events or even doing a heavy sales events or even doing a heavy sales driven process they just don't make driven process they just don't make driven process they just don't make sense when you're charging 500 or $1,000 sense when you're charging 500 or $1,000 sense when you're charging 500 or $1,000 or $1,500 a year so the first order or $1,500 a year so the first order or $1,500 a year so the first order effect is you have more money but the effect is you have more money but the effect is you have more money but the second order effect is you can feasibly second order effect is you can feasibly second order effect is you can feasibly grow your business faster because your grow your business faster because your grow your business faster because your pallet of marketing approaches that can pallet of marketing approaches that can pallet of marketing approaches that can work become so much more I often get work become so much more I often get work become so much more I often get asked how often should I consider asked how often should I consider asked how often should I consider raising prices and depending on how fast raising prices and depending on how fast raising prices and depending on how fast your Market moves you should revisit your Market moves you should revisit your Market moves you should revisit your pricing every 6 to 18 months I'm your pricing every 6 to 18 months I'm your pricing every 6 to 18 months I'm not saying make changes that often but not saying make changes that often but not saying make changes that often but at least revisit your pricing compared at least revisit your pricing compared at least revisit your pricing compared to your competition and ask yourself is

to your competition and ask yourself is to your competition and ask yourself is anyone complaining that we are too anyone complaining that we are too anyone complaining that we are too expensive you should be losing a small expensive you should be losing a small expensive you should be losing a small number of deals to people who say you're number of deals to people who say you're number of deals to people who say you're too expensive otherwise you're usually too expensive otherwise you're usually too expensive otherwise you're usually underpriced now let's talk about how to underpriced now let's talk about how to underpriced now let's talk about how to increase prices there's a couple really increase prices there's a couple really increase prices there's a couple really simple ways to do it that many people simple ways to do it that many people simple ways to do it that many people may not even notice and then there's the may not even notice and then there's the may not even notice and then there's the more comprehensive way that we'll talk more comprehensive way that we'll talk more comprehensive way that we'll talk about in a second about notifying all about in a second about notifying all about in a second about notifying all your customers but one simple option to your customers but one simple option to your customers but one simple option to increase prices is to decrease the value increase prices is to decrease the value increase prices is to decrease the value metric of your plans but keep the prices metric of your plans but keep the prices metric of your plans but keep the prices is the same so for example today if is the same so for example today if is the same so for example today if customers get 3,000 subscribers for $49 customers get 3,000 subscribers for $49 customers get 3,000 subscribers for $49 a month you can drop that number down to a month you can drop that number down to a month you can drop that number down to say 2500 subscribers or 2,000 say 2500 subscribers or 2,000 say 2500 subscribers or 2,000 subscribers for the same price so the subscribers for the same price so the subscribers for the same price so the pricing amount stays the same but people pricing amount stays the same but people pricing amount stays the same but people need to upgrade to higher tiers faster need to upgrade to higher tiers faster need to upgrade to higher tiers faster another option is just to hide your another option is just to hide your another option is just to hide your lowest pricing tier on your pricing page lowest pricing tier on your pricing page lowest pricing tier on your pricing page this should be relatively quick and what this should be relatively quick and what this should be relatively quick and what you'll likely see is you'll get a few you'll likely see is you'll get a few you'll likely see is you'll get a few fewer trials or new customers but more fewer trials or new customers but more fewer trials or new customers but more of them will be on the higher price of them will be on the higher price of them will be on the higher price plans those are not comprehensive ways plans those are not comprehensive ways plans those are not comprehensive ways of raising prices across the board but of raising prices across the board but of raising prices across the board but there are simple things that you can there are simple things that you can there are simple things that you can test out if you want to dip your toe in test out if you want to dip your toe in test out if you want to dip your toe in the water and start to get comfortable the water and start to get comfortable the water and start to get comfortable with the idea of raising prices so now with the idea of raising prices so now with the idea of raising prices so now let's dive into what it looks like to let's dive into what it looks like to let's dive into what it looks like to raise prices well across the board you raise prices well across the board you raise prices well across the board you have to make a decision of whether or have to make a decision of whether or have to make a decision of whether or not you're going to grandfather existing not you're going to grandfather existing not you're going to grandfather existing customers or not and for the sake of customers or not and for the sake of customers or not and for the sake of this example let's assume you're not this example let's assume you're not this example let's assume you're not going to grandfather existing customers going to grandfather existing customers going to grandfather existing customers in that case you're going to want to in that case you're going to want to in that case you're going to want to notify customers and give them months notify customers and give them months notify customers and give them months between announcing and actually between announcing and actually between announcing and actually implementing the price increase I implementing the price increase I implementing the price increase I recommend two to 4 months depending on recommend two to 4 months depending on recommend two to 4 months depending on how difficult it is to switch away from

how difficult it is to switch away from how difficult it is to switch away from your product so if you make it too short your product so if you make it too short your product so if you make it too short people will feel trapped and they'll be people will feel trapped and they'll be people will feel trapped and they'll be angry if you make it too long then when angry if you make it too long then when angry if you make it too long then when the price hike does come they'll have the price hike does come they'll have the price hike does come they'll have forgotten about it you know do the forgotten about it you know do the forgotten about it you know do the famous Netflix thing where you announce famous Netflix thing where you announce famous Netflix thing where you announce it a year in advance everyone gets mad it a year in advance everyone gets mad it a year in advance everyone gets mad and then a year later everyone gets mad and then a year later everyone gets mad and then a year later everyone gets mad again when you actually raise prices if again when you actually raise prices if again when you actually raise prices if you are going to grandfather in existing you are going to grandfather in existing you are going to grandfather in existing customers at their current price points customers at their current price points customers at their current price points raising prices is pretty easy you just raising prices is pretty easy you just raising prices is pretty easy you just go to your pricing page and you raise go to your pricing page and you raise go to your pricing page and you raise them for new customers and you you them for new customers and you you them for new customers and you you should probably let your existing should probably let your existing should probably let your existing customers know we have raise prices but customers know we have raise prices but customers know we have raise prices but in loyalty to you we haven't raised them in loyalty to you we haven't raised them in loyalty to you we haven't raised them on existing customers this time don't on existing customers this time don't on existing customers this time don't commit to never raising prices on these commit to never raising prices on these commit to never raising prices on these folks but it's a lot easier if you're folks but it's a lot easier if you're folks but it's a lot easier if you're going to grandfather and I'll talk a going to grandfather and I'll talk a going to grandfather and I'll talk a little more about that at the end of the little more about that at the end of the little more about that at the end of the video but if you are not going to video but if you are not going to video but if you are not going to grandfather you're going to raise it on grandfather you're going to raise it on grandfather you're going to raise it on everyone across the board then I have everyone across the board then I have everyone across the board then I have five key things that you need to five key things that you need to five key things that you need to communicate in the email or blog post or communicate in the email or blog post or communicate in the email or blog post or whatever other announcement that you whatever other announcement that you whatever other announcement that you make to your existing customers so let's make to your existing customers so let's make to your existing customers so let's walk through these points of what I walk through these points of what I walk through these points of what I would include in the email or the blog would include in the email or the blog would include in the email or the blog post number one set the stage for the post number one set the stage for the post number one set the stage for the value that your product offers in other value that your product offers in other value that your product offers in other words we've been around for a long time words we've been around for a long time words we've been around for a long time we've become a trusted provider in this we've become a trusted provider in this we've become a trusted provider in this space ETC number two just call it out we space ETC number two just call it out we space ETC number two just call it out we are changing our pricing let them know are changing our pricing let them know are changing our pricing let them know right up front what's happening number right up front what's happening number right up front what's happening number three provide a high level justification three provide a high level justification three provide a high level justification about why you're changing pricing so for about why you're changing pricing so for about why you're changing pricing so for example we've added tons more value example we've added tons more value example we've added tons more value we're in a completely different space we're in a completely different space we're in a completely different space than when we launched we're expanding than when we launched we're expanding than when we launched we're expanding our features ETC number four this is an our features ETC number four this is an our features ETC number four this is an optional step offer more specifics about optional step offer more specifics about optional step offer more specifics about whom it impacts when price increases whom it impacts when price increases whom it impacts when price increases will go into effect Etc and provide more will go into effect Etc and provide more will go into effect Etc and provide more justification if you feel necessary and justification if you feel necessary and justification if you feel necessary and finally item number five is let people

finally item number five is let people finally item number five is let people know to reach out with questions let know to reach out with questions let know to reach out with questions let them know your doors are open for them know your doors are open for them know your doors are open for questions comments and feedback in questions comments and feedback in questions comments and feedback in almost all cases the hardest part of almost all cases the hardest part of almost all cases the hardest part of raising prices is the emotional toll raising prices is the emotional toll raising prices is the emotional toll that it will take on you as a Founder that it will take on you as a Founder that it will take on you as a Founder it's getting over the hurdle of just it's getting over the hurdle of just it's getting over the hurdle of just mentally saying I am going to raise mentally saying I am going to raise mentally saying I am going to raise prices cuz actually doing it technically prices cuz actually doing it technically prices cuz actually doing it technically usually isn't that hard and lastly as usually isn't that hard and lastly as usually isn't that hard and lastly as you're thinking about raising prices you you're thinking about raising prices you you're thinking about raising prices you have to think about grandfathering or have to think about grandfathering or have to think about grandfathering or not so in a perfect world you would just not so in a perfect world you would just not so in a perfect world you would just raise prices on everyone because for raise prices on everyone because for raise prices on everyone because for example if you had a restaurant and you example if you had a restaurant and you example if you had a restaurant and you changed your prices then anyone who changed your prices then anyone who changed your prices then anyone who shows up next week to get a burger and shows up next week to get a burger and shows up next week to get a burger and fries pays the same new price but SAS is fries pays the same new price but SAS is fries pays the same new price but SAS is subscription so it's trickier so you subscription so it's trickier so you subscription so it's trickier so you have to think about a couple reasons why have to think about a couple reasons why have to think about a couple reasons why you might want to grandfather existing you might want to grandfather existing you might want to grandfather existing customers into your existing prices the customers into your existing prices the customers into your existing prices the first is if you're worried people might first is if you're worried people might first is if you're worried people might switch to your competition or just leave switch to your competition or just leave switch to your competition or just leave you all together if you're worried about you all together if you're worried about you all together if you're worried about thousands of customers who write in thousands of customers who write in thousands of customers who write in angrily to your support people or if angrily to your support people or if angrily to your support people or if you're worried that you'll damage your you're worried that you'll damage your you're worried that you'll damage your brand and your reputation so how do you brand and your reputation so how do you brand and your reputation so how do you decide whether to grandfather or not decide whether to grandfather or not decide whether to grandfather or not I'll tell you that in just a minute I I'll tell you that in just a minute I I'll tell you that in just a minute I want to let you know about the Companion want to let you know about the Companion want to let you know about the Companion podcast to this YouTube channel it's podcast to this YouTube channel it's podcast to this YouTube channel it's called startups for the rest of us and I called startups for the rest of us and I called startups for the rest of us and I release 52 episodes a year much like release 52 episodes a year much like release 52 episodes a year much like this YouTube channel startups for the this YouTube channel startups for the this YouTube channel startups for the restof us.com if you want to check it restof us.com if you want to check it restof us.com if you want to check it out we're approaching episode 700 it's out we're approaching episode 700 it's out we're approaching episode 700 it's all about building launching and growing all about building launching and growing all about building launching and growing your SAS company I answer listener your SAS company I answer listener your SAS company I answer listener questions I do solo Adventures where I questions I do solo Adventures where I questions I do solo Adventures where I Riff on a topic that should apply to you Riff on a topic that should apply to you Riff on a topic that should apply to you as an entrepreneur and I interview as an entrepreneur and I interview as an entrepreneur and I interview Founders who have been where you want to Founders who have been where you want to Founders who have been where you want to be you can find startups for the rest of be you can find startups for the rest of be you can find startups for the rest of us anywhere greater podcasts are served us anywhere greater podcasts are served us anywhere greater podcasts are served so my recommendation for deciding so my recommendation for deciding so my recommendation for deciding whether to grandfather or not is to use whether to grandfather or not is to use whether to grandfather or not is to use what I call Rob's rule of 10 Rob's rule

what I call Rob's rule of 10 Rob's rule what I call Rob's rule of 10 Rob's rule of 10 says if raising prices for of 10 says if raising prices for of 10 says if raising prices for existing customers will not grow your existing customers will not grow your existing customers will not grow your mrr by at least 10% ideally more it is mrr by at least 10% ideally more it is mrr by at least 10% ideally more it is rarely worth considering cuz the amount rarely worth considering cuz the amount rarely worth considering cuz the amount of headache the support burden the brand of headache the support burden the brand of headache the support burden the brand damage the potential churn is so onerous damage the potential churn is so onerous damage the potential churn is so onerous that if you're only going to grow by a that if you're only going to grow by a that if you're only going to grow by a few percentage points it's best just to few percentage points it's best just to few percentage points it's best just to Granda those users in and I'll be honest Granda those users in and I'll be honest Granda those users in and I'll be honest in some places I think I did a in some places I think I did a in some places I think I did a conference talk where I mentioned Rob's conference talk where I mentioned Rob's conference talk where I mentioned Rob's rule of and it's the same thing and I've rule of and it's the same thing and I've rule of and it's the same thing and I've kind of gone back and forth between 10 kind of gone back and forth between 10 kind of gone back and forth between 10 and 15 it's somewhere in between those and 15 it's somewhere in between those and 15 it's somewhere in between those numbers so 10 is an absolute minimum and numbers so 10 is an absolute minimum and numbers so 10 is an absolute minimum and I think by the time you're going to grow I think by the time you're going to grow I think by the time you're going to grow your Mr by 15% you should really think your Mr by 15% you should really think your Mr by 15% you should really think about not grandfathering and raising on about not grandfathering and raising on about not grandfathering and raising on everyone and while raising your prices everyone and while raising your prices everyone and while raising your prices is the biggest lever that you can pull is the biggest lever that you can pull is the biggest lever that you can pull in SAS I talk to Founders All the Time in SAS I talk to Founders All the Time in SAS I talk to Founders All the Time who are worried that increasing their who are worried that increasing their who are worried that increasing their prices will blow up their entire prices will blow up their entire prices will blow up their entire business and not in the good way that business and not in the good way that business and not in the good way that you're thinking about if you want to you're thinking about if you want to you're thinking about if you want to hear more in-depth advice on this topic hear more in-depth advice on this topic hear more in-depth advice on this topic including exact step that I have including exact step that I have including exact step that I have Founders think through when they're Founders think through when they're Founders think through when they're raising their prices watch this video raising their prices watch this video raising their prices watch this video I'll see you next time