Great read as always Kyle. Do you have any insights into whether these companies implement these price changes for all existing customers as a method to increase revenue? Or what is best / most common practice for increasing prices for existing customers.
There’s not a one size fits all. Generally early stage, hyper growth companies keep folks on legacy pricing. Others do migrate existing customers. If it’s a small price increase, they tend to do it across the board but try to make it a “non event” (ex do rolling price increases on certain cohorts). If it’s a big price increase, they might do a stair step rollout or let folks keep legacy plans for a certain time period (ex 1 year). Hope that helps!
Thanks Kyle, yes that helps alot. In terms Net dollar retention, when calculating that, can or should general price increases be included in the calculation?
This is a fantastic analysis of pricing trends in SaaS. As someone interested in this space, I'm curious about your thoughts on the future trajectory of usage-based pricing. While we're seeing increased adoption and experimentation with both usage-based and outcome-based models, what's your perspective on the displacement of traditional seat-based pricing?
The usage-based pricing raise interesting questions about revenue forecasting – particularly how it impacts MRR/ARR predictability and, consequently, startup valuations.
Would love to hear your insights on how investors and founders should approach valuation frameworks for companies transitioning to these more dynamic pricing models.
Great read as always Kyle. Do you have any insights into whether these companies implement these price changes for all existing customers as a method to increase revenue? Or what is best / most common practice for increasing prices for existing customers.
Thanks
There’s not a one size fits all. Generally early stage, hyper growth companies keep folks on legacy pricing. Others do migrate existing customers. If it’s a small price increase, they tend to do it across the board but try to make it a “non event” (ex do rolling price increases on certain cohorts). If it’s a big price increase, they might do a stair step rollout or let folks keep legacy plans for a certain time period (ex 1 year). Hope that helps!
Thanks Kyle, yes that helps alot. In terms Net dollar retention, when calculating that, can or should general price increases be included in the calculation?
+1 how do legacy customers fit into pricing changes esp in a self serve model?
Just dropped in some thoughts!
excellent write up. thank you!
Thanks Elena! Big fan of your work.
To be fair, I feel like Lastpass's pricing page should be the least of their worry... 😄
Nice analysis!
This is a fantastic analysis of pricing trends in SaaS. As someone interested in this space, I'm curious about your thoughts on the future trajectory of usage-based pricing. While we're seeing increased adoption and experimentation with both usage-based and outcome-based models, what's your perspective on the displacement of traditional seat-based pricing?
The usage-based pricing raise interesting questions about revenue forecasting – particularly how it impacts MRR/ARR predictability and, consequently, startup valuations.
Would love to hear your insights on how investors and founders should approach valuation frameworks for companies transitioning to these more dynamic pricing models.
love the pricing analysis, kyle! can you share more in the future on SaaS discounting strategies? very curious on how other companies run promos
Thanks for the analysis Kyle, help me for deciding pricing for my on going saas dev
Some great analysis Kyle, do you make any trades on the data?