We Raised Prices by 300% and Nobody Left. Why Your Product is Too Cheap.

The scariest button I ever pushed was the "Deploy" button on our new Pricing Page.

For 3 years, we charged $29/month. It was a "Standard SaaS" price. We were terrified that if we charged more, people would leave.

But the math wasn't working. Support costs were eating us alive. The $29 customers were demanding.

So, we ripped the band-aid off. We deleted the Basic Plan. The new minimum was $99/month. A 300% increase.

I prepared for the backlash. I prepared the apology emails.

Silence.

Then, new signups started coming in. And weirdly... the quality of the signups changed.

We doubled our revenue overnight. And Churn actually dropped.

Here is why your SaaS is almost certainly underpriced.

Section 1: The "Pro Hobbyist" Problem

At $29/mo, you attract "Prosumers" (Hobbyists).

• They pay with their own credit card.
• They care deeply about every feature.
• They email support constantly because it's their money.
• They churn as soon as they get bored.

At $99/mo, you filter out the hobbyists. You attract Businesses.

• They pay with a Company Card.
• They don't care about the price (it's a rounding error).
• They only care: "Does this solve the problem?"
• They rarely churn because they embed the tool in a workflow.

By raising prices, we effectively fired our worst customers and kept our best ones.

Section 2: Price = Trust (Signaling Theory)

In B2B, low price can signal Low Quality.

If you are selling a "Mission Critical Database Backup" tool, and you charge $5/month, the CTO thinks: "This must be a toy. I can't trust my data to a $5 toy."

If you charge $500/month, the CTO thinks: "This must be serious enterprise software. It must be robust."

We sell "Peace of Mind." You cannot sell cheap Peace of Mind.

The "Veblen Good" Effect in SaaS:

Sometimes, raising the price actually increases demand because it moves you into a different consideration set (Enterprise vs DIY).

Section 3: The Support Math

Every customer has a fixed support cost (Ticket volume).

Let's say a support ticket costs $10 to resolve (human time).

At $29/mo: If a user files 3 tickets, you have lost money that month. You are essentially paying them to use your software.

At $99/mo: You can afford to give them white-glove support. You can hop on a Zoom call.

This creates a virtuous cycle. Higher Price -> Better Support -> Happier Customers -> Lower Churn.

Low prices create a "Death Spiral" of overwhelmed support and angry cheap users.

Section 4: How to Grandfather (The Ethical Way)

We didn't just jack up the price for existing users.

The Strategy: Legacy Lock.

"If you are already on the $29 plan, you keep it forever... as long as you don't cancel."

This drove Churn to near zero. Nobody wanted to cancel because they knew they had a "Golden Ticket" deal that they could never get back.

For new users, the price was $99. No exceptions.

This honors the loyalty of early adopters while fixing the unit economics for the future.

Section 5: Justification (Value Metrics)

When you raise prices, you need to reframe the Value.

We stopped talking about "Features" (Unlimted Storage! 5 Users!).

We started talking about ROI.

"This tool saves your engineer 4 hours a week. An engineer costs $100/hour. That is $1,600/month in value. We are charging $99. That is a 16x ROI."

When you frame it like that, $99 looks cheap.

Conclusion

Patrick McKenzie (patio11) famously said: "Charge More."

It is the single highest-leverage lever in a business. You can code for 6 months to add a feature that increases conversion by 10%. Or you can change a CSS number on your pricing page in 5 minutes and double revenue.

Be brave. Your product is worth it.