Practitioner pattern · Eric Crowley (M&A and fundraising advisor to CSS companies; GP Bullhound advised Flo, TeamSnap (Mojo) and Nutracheck on deals discussed)
Email loyal subscribers before a price rise and explain what they get for it
Guest says best-of-breed apps keep users through it; one of the main paths to positive NRR
Workedpricingemailretention
What they did
Once churn has flattened into a stable base of long-term subscribers (2-3+ years), raise prices periodically like Amazon Prime, Netflix and Hulu (roughly every 2 years). Don't sneak it in: send an email with the old and new price (e.g. '$29.99 to $35.99') and list the benefits users are getting for the extra money. A/B test on a slice first and watch retention. Cohost adds: only worth it after you have compounded a sturdy long-term base for a handful of years; expect some users to be upset.
What happened
Guest says across most of his clients, best-of-breed apps with good quality service see users accept increases; price rises on a flat cohort create positive net revenue retention.
- Stage
- Scale (mature subscriber base)
In their words
Sub Club by RevenueCat · The Subscription App Industry Rebound — Eric Crowley, GP Bullhound“You have to justify it to your users, right? You can't sneak it in. You send an email. You say, "Hey, guys. We're going from $29.99 to $35.99, and here's why. Here's all the benefits you're getting for that extra six bucks."”
“You can A/B test this stuff. Like a lot of companies A/B test, right? They try a little bit, see what their retention is. But generally, like what I've found with most of my clients is that if you're a best-of-breed and you're producing a good quality service, people are going to get it.”
Related topics
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