INPUT CURRENT: Project management tool for marketing agencies, 79 EUR/month per team, 140 paying teams CHANGE: Raise to 99 EUR/month for everyone, including existing customers CUSTOMERS: Small agencies, 3-15 people. Most have been with us 1-3 years. Monthly churn about 3%. REASON: Our hosting and support costs went up and we have not raised prices in 3 years OUTPUT (Claude Sonnet, unedited) ## Verdict **Raise, but delay it for existing customers with real notice — don't flip everyone to €99 overnight.** ## The arithmetic Break-even: 140 × €79 = €11,060 today; €11,060 ÷ €99 = 111.7 → you need to keep at least 112 of 140 teams (lose ≤28, ≤20%) for revenue to hold. - At half that churn (10%, 14 teams lost): 126 × €99 = €12,474 (+12.8% vs today). - At double (40%, 56 teams lost): 84 × €99 = €8,316 (–24.8% vs today). Your baseline churn is 3%/month, far below the 20% break-even, so the increase has a wide margin — as long as it doesn't trigger a spike well beyond normal. ## What you are actually selling at the new price At €99/month you're asking a 3–15 person agency to pay 25% more for the same tool they've had for up to 3 years. For that to hold, the tool needs to still be the cheapest, most-painful-to-replace piece of their stack — used daily, with switching costs (data, workflows, client history) that outweigh €20/month. If usage has been flat or a competitor has closed the feature gap, this meets more resistance than the arithmetic suggests; you haven't given me usage or satisfaction data, so treat that as the open question, not the sure thing. ## Existing customers - **Grandfather forever**: costs €2,800/month (140×€20) indefinitely, shrinking only as the book naturally churns at 3%/month — over €30k in year one. Doesn't fix the cost problem you named, and creates two permanent tiers. - **Move everyone immediately**: full €2,800/month gain from day one, but lands with zero warning on a base that hasn't seen a price change in 3 years. - **Delay (recommended)**: 60 days' notice, effective the first billing cycle after that (notice Oct 1, effective Dec 1). In between, customers can ask questions, downgrade, cancel without penalty, or switch to annual billing now to lock in €79 for one more year. No permanent grandfathering after that. ## The announcement Subject: Your price is changing on [date] Hi [Name], Starting [effective date], [Product] moves from €79 to €99/month per team. This is our first price change in three years — our hosting and support costs have both risen, and this keeps us investing in the product you rely on. Everything else stays the same: your data, your plan, your seats, your support. If you'd rather lock in the current price a bit longer, switch to annual billing before [effective date] and you'll pay €79/month through [date+12mo]. No action needed if you're happy to continue at the new price — it applies automatically on your first invoice after [effective date]. — [Your name] ## Expected pushback 1. "We haven't seen new features to justify this." → Costs (hosting, support) rose independent of features; the price hadn't moved in 3 years while those did. 2. "Why now, all at once?" → You have 60 days' notice and an annual lock-in option before it takes effect. 3. "We'll just switch tools." → Fair — compare the cost of migration and retraining against €20/month before deciding. ## Tripwires - Churn exceeds 8%/month (double baseline) in the 60 days after the effective date → pause further rollout, review case by case. - Fewer than 5% of eligible teams take the annual lock-in by [effective date] → signals price resistance, revisit before finalizing. ## What to measure 1. Monthly churn rate — billing system. 2. MRR — billing system, tracked weekly. 3. Support tickets mentioning price — helpdesk tags. 4. Annual-plan opt-in rate — billing system.