How to communicate a price increase — and keep your best subscribers

Take a moment and imagine if you could charge all your subscribers 10% more. That’s a nice thought, isn’t it? What would it mean for your business? What would it do for Lifetime Value? What would it do for your profit margins? 

Don’t start drooling and changing your price just yet. If it were that simple, we’d all be bumping up our prices, myself included. Yet, there is a chance you could easily charge more.

Ex-Substack Growth PM Reid DeRamus talks about this in a Sub Club podcast interview. Reid discussed how impactful a price increase could be and how if you have strong retention metrics, the added business value will far outweigh the churn. 

However, we tend not to increase prices, fearing the backlash, mass churn, and loss of valuable customers. We fear that customers simply won’t accept it. Yet, the reality is that they probably will, perhaps grudgingly so.

In the interview, Reid focuses primarily on examples of streaming platforms, an obvious culprit of the price bump. I think we’ve all noticed them hitching up their prices in recent years. Netflix cost $7.99 per month when it launched its streaming-only subscription in 2011. 

With all the recent price increases in streaming platforms, I told my partner, “It’s time to purge; they are costing us a fortune.” And yet… we still have Netflix and Disney+ taking money from us each month. When I canceled Amazon Prime in a rage against Amazon (they kept leaving my packages on the streets of London to be stolen), my partner simply got his own Prime subscription. The truth is that despite our outrage at increased subscription prices, we’re probably still using most of the same streaming services.

This is because customers will accept price changes when your retention is strong. They may even think your pricing is too good to be true and you were actually underpricing previously, so they don’t mind paying fairly for the value you provide. So approach it right, and it can positively impact your growth, even if there is a bit of churn like it did for Netflix: 

Here’s the thing: Netflix is so big that its number of new subscribers has slowed down. Not because they were failing in any way but because everyone was already subscribed. Netflix has become a cornerstone of our society — Netflix and Chill — in the same way WhatsApp and Instagram have. So, the only way they could drive growth was to turn to higher prices.

Disney+ followed the same example. They started at a low monthly cost of $5, aiming to reach 100 million users quickly. A price lower, grow faster strategy Reid suggested in the podcast interview. Then, they raised their prices, and despite losing subscribers, their growth was positively impacted.

But how do you do it without inciting backlash? How do you avoid shooting yourself in the foot with it and earning less than you initially did?

It’s easy to get caught up in the phrasing of the increase and believe this to solely be a matter of communication, but let’s not get ahead of ourselves. First, there are a few things to consider before you increase your prices.

I believe 90% of success in price communication comes from thinking through the decision and approach, and just 10% is the messaging. 

Good messaging comes from thorough consideration behind the change. You probably aren’t at the level of Disney or Netflix, which can rely on their name and ability to create a large amount of new content to justify your price change. But I believe you can navigate it more gracefully than they did to improve profitability and drive growth.

Before you even consider how you’ll communicate a change in pricing, answer the following four questions together as a team. Once we’ve covered the four crucial questions we will discuss communication in more depth.

1. Is it the right time to increase your prices?

You’ve got to consider the context around your price change. A foundational requirement is that you have strong retention, demonstrated by:

• Are your retention metrics strong? 
• Are you post-product-market-fit?

If they aren’t, you might see an initial positive increase in revenue, but retention will drop over time and may do more harm than good. Price increases to salvage the low profitability from bad retention are rarely successful.

The other timing consideration is whether you’ve already tried alternative ways to increase value, such as:

• Adding a new tier
• Adding upsells

With a new tier, you can introduce new features or improvements at a higher tier to drive up value. But this only works if you don’t have too many tiers to begin with (fewer than two or three at this point), so the new feature can be a part of it. 

Here’s one to consider, though: if your base price is too low to begin with, you probably want to start with an increase in the price. In a different Sub Club interview with co-founder and CEO Vince Mayfield of TalkingParents, a co-parenting app for separated couples, he talked about their journey from not charging to a freemium model with a $4.99 tier. Then, they evolved to charging $9.99 for that $4.99 tier. 

Only later did they offer an additional tier priced at $24.99. They had to first get people used to paying a higher base rate before it made sense to introduce higher-priced additional tiers. But it worked for them, despite all of the odds and advice against multiple price changes. That’s because they had proved themselves to the users and realised each new price with new features, which we’ll talk more about.

2. What is the value your subscribers get from the price increase?

Whenever you can coordinate a price increase with a new feature, new content or major improvement, the price increase can be made more acceptable. Especially if those improvements relate to what your customers are looking for. 

With a price increase, your goal should be to show customers that it’s driven by existing or future value adds for them rather than by your desire to be more profitable.

This is what TalkingParents did well. That doubled price from $4.99 to $9.99 came with a significant new feature of transcribed accountable calls. This is extremely important for their market of separated parents as they are often dealing with a legal case in which proof of communication is key. However, that transcription came at a cost to TalkingParents, and most parents using the app understood that because it added value. They initially saw around a quarter of their customer base churn, but overall, it worked out better financially for them. I include the churn in this to show you even with higher churn, it could still be the right move for your company to make that change and focus on creating a better experience for the users that are the most valuable to you.

You can also use this not just as a reason for the price change for existing customers and to show you listen to their needs, but to attract new customers. Tractive, a dog tracker with a physical product and app subscription did this well. Earlier this year, they launched Version 6 of their product, Tractive DOG 6, which included the following changes to the physical product and app: 

Part of this was also adding a barking monitoring feature to the app:

This opens them up to a new target audience for them: dogs with separation anxiety. Suddenly, it isn’t just a tracker for when you are out with your dog; it is also for when you are away. As someone with a Covid puppy myself and with many friends with nervous dogs, I can assure you that this is an attractive feature to pet owners. 

I hadn’t used them before, but I realized through some investigation (ok, I was looking for a discount code) that this was a sneaky price increase as their previous product (just named the Tractive Dog GPS Tracker) was cheaper. They’d renamed the product to further communicate the improvements that led to the price change.

As a dog owner, I didn’t care that it cost more than I expected it would. Just the evening before, my partner had lost our dog for 30 minutes in the forest right before sunset, so the panic was still fresh. I was happy to hand over my money. The extras simply made it even more worthwhile. Don’t worry, our dog was found a mere 30 meters away from the original spot. He had jumped over some brambles and trapped himself, so he waited silently to be rescued by my panicked partner. 

While this is a physical product and subscription app combination, it demonstrates how a price increase can almost become a marketing scheme. It’s an opportunity to show what you’ve added and how you are innovating to meet their needs better. If you are a dog owner, you’ll likely know the sheer panic as your dog runs off into a forest. 

If you haven’t added new features recently or have any in the immediate pipeline, you can instead focus on future features. What will this increase allow you to offer? Tractive doesn’t just talk about the current features but also what they have upcoming later that year, such as heart and respiratory rate monitoring (honestly, my dog’s activity tracker is fancier than mine at this point). 

So, talk about your roadmap and what you plan to make happen for them. Don’t focus on the feature, but the value, like Tractive does: “Tractive’s monitoring technology provides pet owners with a simple and non-invasive way to track these parameters at home, alerting owners to potential changes in their pet’s health status.” I think they could have done it even better by focusing a level deeper, such as feeling less anxious about your pet’s health, knowing you are keeping a close eye on them.

With every improvement you plan to use to explain your price increase, think about what is in it for your customer, why will they care about it.

If you have nothing currently planned even in the far future, you can still focus on reinforcing your existing value, AKA the reason people have subscribed in the first place, the value you consistently provide. Often you have already improved a lot since the initial price increase, Peloton shows a comparison table on their website of just how much has changed since they initially set their prices:

It didn’t feel like Disney + used anything specific to justify their change in price, though as a streaming platform they are always increasing prices. Yet intentionally or unintentionally, Disney +’s price increase led to a mass of articles pushing people to get it at the old price before it increased:

People who might have been on the fence about getting Disney+ suddenly saw themselves as saving money by immediately subscribing. These people might have got it three months later without prompt, or might have never subscribed. So the save money by subscribing now or get a year subscription can also drive acceptance of the price change. 

3. Will you increase your price for only new subscribers or existing ones as well?

This is another important consideration. I’m a huge fan of spoiling your existing subscriber base, but listening to Reid’s Sub Club podcast interview raised (pun intended) an important point: you are leaving a lot of money on the table if you don’t increase it for existing subscribers, especially as they are the ones most likely to accept the change. 

I do believe it’s worth considering how you reward those existing subscribers over new ones, and ways to do this are:

• Delay their increase
• Offer them an annual subscription at the old price if they upgrade now
• Give them extra warning 
• Give them something extra as a thank you for their loyalty

I would also avoid having too many different prices, as that legacy can make things messy in the long run. I recommend applying it for all but seeing how to treat your existing subscriber base a bit differently using one of the four approaches above.

4. How much will your price increase?

Price increases vary greatly for products; some do smaller incremental increases while others, like TalkingParents, twice increased their price by 100% ($4.99 to $9.99) and a second of 150% with the additional tier at $24.99. 

Obviously, bigger increases come with more risk, and there’s no way around that. But if you are underpriced and retention is strong, I believe you’re better off going for slightly more significant, less frequent increases. Otherwise, your subscribers will feel like you are endlessly increasing your prices—the same way I think about all my streaming subscriptions. 

How much you can get away with it depends on the situation, determined by the following factors:

• Your initial price
• The strength of your retention
• If you are adding anything now or in the future to justify the increase
• How price elastic your customers are

That last point is often the hardest to understand. You might indicate if you’ve run discounts before. High price elasticity means customers are very price sensitive in which case discounts are very effective, but price increases are trickier. So, if you’ve seen discounts work very well, it may be harder to increase prices.

If you can, additional pricing research can give an indication of price elasticity, e.g., using the Gabor-Granger pricing model. This tests a range of price points by asking users if they would purchase at each level to determine demand elasticity and the optimal price.

Now, your optimal price may be below what you want to increase it to because, with pricing research, there is a lack of context and the added value of the brand, but it’s still valuable in gauging the steepness of that curve for your audience, e.g., steeper means your customers are more price sensitive.

This can also help you do some rough calculations about whether the price change would increase your overall profitability.

Now comes the messaging

Okay, we’ve gone through four key considerations:

1. Is it the right time to increase your prices?
2. What is the value your subscribers get from the price increase?
3. Will you increase for only new subscribers of existing ones as well?
4. How much will your price increase?

This is the heavy lifting, the thought process behind the increase. As mentioned previously, the messaging is the final 10%; even the best copywriter can’t make a poorly thought-out price increase land well.

I am not diminishing the importance of communication–my sister is a writer and would never forgive me if I dared do that. Instead, I’m highlighting that communication is the final step and is reliant on previous considerations. Having a strong strategy behind it versus doing a random increase with no communication will actually allow you to get away with a bigger increase. But how do you bring it across effectively?

There are a few key parts to keep in mind for your message:

• Be transparent about the reason. Don’t blame someone else, but be honest and share with them why you need to increase the prices, whether this is to protect the quality or invest in future improvements.
• Make it easy to see the new price. Don’t say, “Please go to your account to see your new price.” Include both your old and new prices clearly in your email.
• Clear and sufficient notice. Give notice; the more, the better, as this makes people feel like it’s less out of nowhere that prices have changed. 
• Make it personal. I like writing these emails from a founder’s perspective or a main team member to show it’s not some corporate increasing prices. You want to come across as human rather than an automated notification.
• Segment where possible. Don’t give a huge list of every price change, but segment your audience to make it feel more personal.
• Make it easy to cancel or downgrade. Communicate how to best do that and the other options to help them out. 

Email communication will take up a large part of it. If you are struggling to structure your email, here is a basic template to start from:

Hello [First Name],

I’m [Name + Role] at [Company Name]. I wanted to reach out to let you know we’ve had to increase our prices for [Subscription Type] from [Old Price] to [New Price], this will happen as of [Date].

We really appreciate you being a subscriber of [APP NAME] and wanted to share why this change has occurred. [Insert Reasoning].

If you have any questions at all, please hit reply,

Thanks for your time,

[Name]

Naturally, you could also go into much more detail. These SaaS pricing change examples by User List show you how to include more depth. But personally, I can’t stress the importance of clarity and simplicity. Don’t get into a long ramble and justification of the price change, you’ve already decided the main value of the price change before so focus on that.

I’d also recommend sending a reminder to users right before the price change. While not an app subscription, I really liked how Bella and Duke, a raw dog food subscription (yes, all my money goes to my dog, and all those subscriptions are increasing their prices), did this with an email titled: We noticed you haven’t seen an important subscription update. 

I clearly had missed the price increase email, so they sent me a clear follow-up email with all the same communication:

You’ll notice they do a lot of the above in terms of clarity and keeping it personal. I’d advise doing at least two emails about the price change for all and also an extra follow-up for the non-opens. I also want to highlight how they reminded the reader of their USPs, even though these won’t change with the price.

In all honesty, you could just increase your price and let the app store notify your customers. But you’ll notice I haven’t even given this as an option, as it isn’t one in my opinion. It’s just a big no and a sure way to have your price change fall flat. So please don’t do that; reach out to your customers yourself or risk them all jumping ship to a cheaper option.

Determine where else to communicate

I started with email because it’ll be a significant part of your active communication. You can then use that same messaging to actively communicate through other methods:

• In-app notification: A pop-up or banner within the app ensures they learn about the increase (only helpful for active users)
• Help Center / FAQs: Have a dedicated place for the price increase and an explanation about it

If it’s a major increase, I’d also advise you to use:

• Push notifications: Because these are so short, I prefer reminding through email, but if you have a low opt-in rate or a low open rate, push can be helpful as well
• Social media: If you have an active following, this can be helpful as well to highlight transparency and lead an active conversation 

In general, I prefer to communicate in multiple places and multiple times. It may drive up short-term churn, but it’ll protect your brand’s reputation in the long term. Nothing is worse than your customers only realising you’ve increased your prices when they look at the charge on their bank. 

Prepare your backlash communication

There will always be backlash, even a slight price increase of a high retention app will get some backlash, and that’s fine. It’s important to have communications prepared for complaints so that you can present a united front and keep an eye on it relative to the larger group. 

If less than 1% of users complain, it’s not too bad. A mass unsubscribing that is dropping monthly revenue (without improving profit) means you must work on damage control. As you noticed with Disney Plus, it’s a balance, as revenue increased relatively speaking despite the subscriber drop. Half a million unsubscribes might sound like a lot, but based on Disney’s online figures, it’s only 0.32%. 

Navigating price increases with confidence

Price increases can feel daunting but can be a powerful lever for growth and profitability when approached strategically. The key is ensuring that your app delivers substantial value, your timing aligns with retention strength, and your communication is clear, concise, and transparent.

Yes, some customers will churn, but the right ones will choose to stay. Instead of fearing a backlash, focus on preparing a strong strategy instead. With thoughtful execution, a price increase won’t just improve profitability and overall revenue but can actually be an opportunity to build trust that you communicate transparently and are also focused on improving the experience for them. Don’t forget your revenue will continue to grow with all the new subscribers that join at this higher price.

So, if you’re hesitating, ask yourself: Are you underpricing your product? And what’s the real cost of not making this change?