You underpriced your product. We know this because almost every founder-led company in the $10M-$50M range has underpriced their product. In the early days, you traded margin for logos. You gave early adopters "grandfathered" pricing to secure the case studies that got you to Series B. It was the right move then.
But now, that legacy pricing is an anchor on your valuation. While your costs have evolved—senior engineering talent, SOC 2 compliance, enterprise-grade support—your revenue per customer has stayed flat. You are effectively subsidizing your oldest, most demanding customers.
The fear stopping you is visceral: "If I raise prices, they will leave."
This fear is mathematically irrational. In 2025, B2B SaaS prices rose by an average of 11.4%, outpacing general inflation by nearly 4x. Your customers are already paying more for Salesforce, AWS, and Slack. If you remain the only vendor with 2019 pricing, you aren't being a "good partner"—you are signaling that your product has not increased in value.
Let’s look at the data. A study by ProfitWell (now part of Paddle) and McKinsey revealed a staggering truth: a 1% improvement in price monetization results in a 12.7% increase in profitability. Compare that to a 1% increase in acquisition volume, which yields only a 3.3% profit lift.
By refusing to touch pricing, you are choosing the hardest possible path to EBITDA growth: trying to out-sell your own margin compression. The goal of this diagnostic is to move you from "apologetic price hikes" to "value-based repricing."
Before you send a single email, you must audit your leverage. A blanket "inflation adjustment" email is lazy and dangerous. It invites procurement to shop around. Instead, successful price increases are built on a Value Realization Framework.
We categorize your customer base into three buckets to determine pricing power:
These customers have low usage, low NRR, and high support ticket volume. They bought a promise you haven't delivered on. Raising prices here will cause churn.
The Play: Do not raise prices yet. Fix the Customer Success function first. A price hike is a forcing function for them to leave. Unless you want to fire these customers (which is sometimes a valid strategy), stabilize them first.
They use the core product but haven't expanded. They are satisfied but not thrilled.
The Play: The "Give-Get." You raise the price, but you simultaneously unlock a feature that was previously gated. "We are adjusting your base rate to $50k, but we are including the Advanced Reporting Module (previously $10k) at no extra cost." You increase ARPU while they feel they got a deal.
These customers have integrated you into their critical workflows. Switching costs are massive. They are paying 2021 rates for a 2026 product.
The Play: Direct value alignment. Show them the math. "Since you joined, we’ve released 40 major features and improved uptime to 99.99%. To sustain this level of investment, we are bringing your contract to market rates."
The industry median for B2B churn is roughly 3.5% annually. If your churn benchmarks are already above 7%, a price increase is risky without product improvements. However, if your churn is under 3% and you haven't raised prices in two years, you are leaving millions in enterprise value on the table.
The difference between a renewal and a cancellation is often the narrative. Do not blame inflation. Your customers don't care about your AWS bill; they care about their outcomes. Here is the framework for the communication:
Expect 20% of customers to push back. This is healthy. It means they care. Empower your sales team with a "Concession Menu" that does not involve reverting the price.
Acceptable Concessions:
1. Multi-year lock-in (Price stays flat if they sign for 3 years).
2. Payment terms (Net 60 instead of Net 30).
3. One-time training or service credits.
For a company doing $20M ARR, a 10% price increase across 80% of the base (assuming 5% churn from the hike) results in $1.5M in pure profit. At a 15x EBITDA multiple, you just created $22.5M in Enterprise Value with one email campaign.
Stop apologizing for the value you create. If your product works, it is worth the market rate. If it doesn't, a low price won't save you anyway. Check your EBITDA margins—if they aren't best-in-class, your pricing is the first place to look.
