By Scott Woody
Pricing in software is undergoing a seismic shift — but navigating this evolution is no small feat. Get it wrong, and customers won’t be shy about voicing their frustration.
Just ask Canva or Unity. Both companies faced customer backlash over pricing in recent years. And they’re not alone. Pricing changes are one of the most delicate moves a software company can make. Done right, they unlock growth. Done wrong, they can alienate loyal users and force awkward public walk-backs.
With nearly two-thirds of SaaS companies adopting usage-based pricing and another 21% planning to experiment with it, according to OpenView Partners, the stakes are high. Hybrid pricing models — blending usage-based and traditional subscriptions — are also on the rise, adding more complexity to an already tricky game.
I work with companies every day to help them roll out usage-based and hybrid pricing strategies. I’ve seen what works, and what doesn’t. Here are five rules to live by when introducing new pricing structures or levels.
1. Lead with value
When you’re rolling out a pricing change, whether it’s a price hike or a restructuring, your first job is to make sure your customers understand the value they’re getting. This is essential.
If you’re raising prices, you need to show customers that the value they’re getting has gone up as well. That could mean new features, better performance, or a more tailored experience. On the flip side, if you’re lowering prices, you don’t need to change the value proposition. Customers will already see that as a win. Either way, aligning their perception of cost with the value they’re receiving is your first line of defense against backlash.
2. Don’t rush the rollout
Big or sudden pricing changes can be risky. The software world isn’t just transactional — especially for companies that have built a user community. Be deliberate, clear and paced.
3. Plan ahead
If you’re raising prices, consider grandfathering in existing customers at their current rates, at least for a while. This softens the blow and shows you value their loyalty. But be transparent — let them know when their pricing will change and tie it to the value they’ll receive.
For new customers, roll out new pricing with new features or solutions. Limit price increases to no more than once a year. Customers expect occasional adjustments, but if you surprise them too often, you’ll erode trust.
4. Invest in visibility tools
If you want customers to accept your pricing changes, make the value crystal clear — starting with visibility.
Customers should know what they’re paying for, when they’re paying for it, and what value they’re getting in return. This is especially true with usage-based pricing, where the numbers can climb quickly if usage spikes. Give them the tools to track costs, set budgets and control spending. Transparency doesn’t just build trust — it also helps customers make smarter decisions, which reflects positively on your product.
5. Don’t shock the system
Sticker shock is a surefire way to alienate your customers. Canva learned this when it raised certain pricing tiers from $180 to $500. Even if your product is worth the higher price, a sudden, steep jump is a tough pill for customers to swallow.
If you need significant price increases, consider a staged approach. Spread the increases over time and use clear, frequent communication to explain the “why” behind the changes. Customers are far more likely to accept higher costs if they feel included in the journey, rather than blindsided by it.
Why pricing changes will be faster — and bumpier
Let’s be real: Software customers aren’t strangers to pricing transitions. But this time, the ride is going to be faster, bumpier and more chaotic. The reason? AI.
AI is accelerating the pace of innovation, flooding the market with new solutions and increasing competition. At the same time, the shift from subscription to usage-based or hybrid models doesn’t require massive infrastructure changes. Unlike the transition from on-premise to cloud, this is cloud-to-cloud. That means pricing changes will happen faster and the pressure to adapt will be relentless.
The speed of this evolution makes it more important than ever to innovate carefully, communicate clearly and execute flawlessly. Your customers are watching and they won’t hesitate to let you know when you mess up.
Avoiding missteps comes down to three things: planning, strategy and communication. Nail those and you’ll stay ahead of the curve — and your competition.
Scott Woody is the co-founder and CEO of Metronome. He previously led Dropbox‘s growth and monetization engineering team, where he drove new product launches and helped the company scale to 10 million-plus paying customers.
Illustration: Dom Guzman
Stay up to date with recent funding rounds, acquisitions, and more with the
Crunchbase Daily.
