Raise Your Prices It Unlocks Growth

Raising prices is one of the most difficult but necessary actions for a SaaS founder. Most founders underprice their products due to psychological factors like fear of rejection, but revisiting and increasing prices every 6-12 months is a critical growth activity.

Why You Should Raise Prices:

1. To Make More Money (The Obvious Reason): Higher prices directly translate to higher revenue, which can be reinvested into the team, product, and marketing, or taken as profit.

2. To Unlock More Marketing Channels (The Real Reason): This is the crucial second-order effect that most founders miss. The marketing channels available to you are a direct function of your Average Revenue Per Account (ARPA).

   • At a $20 ARPA, you can only afford a few, mostly organic, marketing approaches.
   • At a $500 ARPA, you can afford to invest in many more channels, like paid ads and content marketing.
   • At a $5,000 ARPA, every marketing and sales channel becomes a viable option.

   Pricing isn't just about revenue; it's about giving yourself more options to grow the business.

Handling Price Objections and "Aspirational Pricing":

• Expect Complaints: Some people will always complain that your product is too expensive. This is often a sign that your pricing is in the right ballpark. If no one complains, you are definitely too cheap.
• Don't Default to Lowering Prices: When a prospect says you're "too expensive," it often means "your product is not worth this price to me." The solution is rarely to lower the price.
• Use Aspirational Pricing: Instead of lowering your price to match your current feature set, set the price you want to be able to charge. Then, use that "aspirational price" as a forcing function to improve your product until it provides enough value to justify that price point. This turns pricing from a reactive measure into a proactive driver of your product roadmap.

It is incredibly difficult to build a significant business when you are underpriced.

Tags: #SaaS #pricing #strategy #growth #marketing-channels #ARPA #aspirational-pricing