Why you need to increase Prices?

Lately, I've seen a lot of inflation worries from SaaS founders. This worry is justified. After all, business expenses are higher and employees are much more expensive than a few years ago. Meanwhile, a recession is on the horizon. Private company valuations have softened, access to capital is more limited, and most importantly, customers are becoming more price sensitive.

For the past few weeks, our team has talked to other founders and studied the impact of inflation on SaaS companies. The reality is harsh. If you work in SaaS and understand recurring revenue, you're well aware of the positive side of compounding -- recurring revenue growth. Now just imagine the opposite when you picture years of inflation.

For example, if you're in the bay area and are wondering what would happen to your purchasing power over the last 6 years, it's basically been cut in half. So that $100/mo plan is effectively only buying you less than $50 today.

It's clear that SaaS founders don't increase prices often enough to keep up with inflation. There are many SaaS companies who could get by with 2x or 3x their current prices. So why do we as SaaS founders have such an aversion to raising prices?

I think the answer is FEAR... we worry that growth will slow due to price sensitivity or there'll be some form of customer backlash. If you approach the price increase in a reasonable manner and communicate it fairly to your customers, there's no reason to be fearful.

The Churnkey team has written a detailed guide for how founders can tackle inflation, raise prices, and we've even included sample price increase email templates for your SaaS customers.

https://churnkey.co/blog/the-founders-guide-to-inflation

👆🏻 Feel free to copy them and tweak to your liking.