You need to raise prices but don't want to lose existing customers
Lock in early adopters at your current price forever. Raise prices for new users. Early users become your most loyal advocates.
When to use
You're underpriced and need to raise prices. You have existing paying customers.
Hypothesis template
If we raise prices to fill in: new price for new users while keeping existing users at fill in: old price, revenue will increase by fill in: target% without increasing churn.
Method
The problem: Your price is too low but raising it feels risky. You don't want to upset existing customers who believed in you early.
What Basecamp did: When they raised prices, existing customers kept their old rate forever. New customers paid more. Early adopters felt rewarded, not punished.
The result: Grandfathering increases revenue from new customers without churning existing ones. Early users become your biggest advocates because they got a deal nobody else can get.
How to do it:
- Decide the new price (most SaaS is underpriced — a 30-50% increase is common)
- Email existing customers: "Your price stays the same. Forever. Thanks for being early."
- Update pricing page with new prices
- New signups get the new price
- Track: new user conversion rate at higher price, existing user churn (should be zero)
- Consider doing this once per year as you add value
Key insight: Grandfathering turns a price increase into a loyalty reward. Early users feel special. New users accept the price because they don't know the old one.
Success metrics
- •Revenue per new user
- •Existing user churn after announcement
- •NPS change
- •New user conversion rate at higher price
Prerequisites
- Enough value to justify higher prices
- A billing system that supports different prices per cohort
- Communication plan for existing users
Common pitfalls
- •Raising prices on existing users (defeats the purpose)
- •Not communicating the grandfather clearly
- •Raising prices without adding value first
- •Raising too frequently (once per year max)
Source: Basecamp, Notion. Grandfathering turns price increases into loyalty rewards.
Suggested ICE scores
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