Money Ball: How to increase prices and run the table
Inhale. Exhale. Let's go.
Imagine now that you've done all the work researching, interviewing, and surveying. You've attended meeting after meeting and reviewed reports and graphs. Then BOOM! New glorious pricing. Cue special lighting effects. Now what?
Tell your customers.
Communication is more than what you say, it's also how you say it. There's a way to tell your clients their fees have increased and have them excited to pay you! Here's how: Cue up. Move up. True up.
The whole purpose of the white ball in billiards is to cue another ball into motion. If you've ever played then you know the positioning of the cue ball makes all the difference. Your sales or CS team is your cue ball. Position them for success with a script to highlight the meaningful value of your product and navigate the price increase conversation. Include objection handlers and escalation paths.
Be sure to define the most suitable options for your client base; "one size fits all" is a no-go. It is best to segment your base and offer different options to each segment giving customers a path to stay, upgrade, or downgrade.
The glossy white ball is lined up with the last sphere on the table, the eight. You draw back your blue-tipped stick and gently thrust it forward putting your cue into motion. This is your sales team's strategic engagement. Your script should include a list of value boosters in 3 ways:
1. The value the customer has used to date
hint: tell them the number of users, messages, or contacts used so far this year
2. The biggest releases in the past 6 months
hint: choose big and noticeable enhancements they can actually see and feel
3. The new value coming in the next 6 months
hint: talk about new goodies that are already in beta or close to finished. Avoid roadmap ideas or early concepts
Remember that investing in better support, faster onboarding, and more services boosts value as well. Make it clear as to what you want the customer to do by giving them a specific call to action such as choosing a plan or confirming an option. In many SMB or small ACV cases, the pricing change may be passive (auto-renew, nothing for you to do, etc.) but always give the customer a path to choose, if they need to. Identify churn risk by defining signals that your customers may not accept the new plan or price change. Look for signs such as reducing user seats, asking for escalation, a sharp drop in usage, etc. Have a remedy in place for each scenario.
Clack! The eight is in motion to the corner pocket. The kinetic energy is guiding that last ball to the goal, the price increase.
Reframe the pricing change by offering a time-bound promotion. Something like renewing in the next 30 days to get one month free or getting a free upgrade for 3 months. Ensure that all promotions have a condition and expiration date in order to sink the eight without scratching.
Another technique to ease customers into the new pricing plans is to define milestones that qualify for discounts, credits, or other terms. For example, when customers reach a certain amount in transaction volume by a specific time frame, they'll receive a credit equal to 10% of their contract value. Let them use the credits to buy services or purchase add-ons that could yield more value. If you want to get fancy, boost up the value of the credits so they get more when they buy selected products. Should you choose this route, be sure to track and enforce the milestones closely.
Grandfathering should be offered very selectively to accounts that fit a defined set of conditions (tenure, size, strategic value, LTV). Give them a path to full or near full price over the next one to two years. In some industries, word travels and others may demand the same rate. In other cases, some people leave organizations to join new companies and will demand the same rate. Too many grandpas lead to both financial and operational headaches, so be careful.
Cue up. Move up. True up. Ooo... that eight went in clean!