Would a price rise pay off?
See the monthly revenue trade-off before you change your SaaS pricing.
Estimated monthly revenue
Before
£2,500
After
£2,760
+£260 per month
At a 20% price increase, monthly revenue breaks even if you lose fewer than 16.7% of customers. This assumes every remaining customer pays the new price.
How the estimate works.
Current MRR is customers × current monthly price. Projected MRR is customers × (1 − customer loss) × current monthly price × (1 + price increase). The difference is the monthly change. Break-even customer loss equals price increase ÷ (1 + price increase).
What it leaves out.
This simple model treats every customer as paying the same monthly price and assumes the change happens at once. It leaves out annual contracts, discounts, taxes, expansion, new sales and later churn. Use it to test a first assumption, not as a forecast.
How do I work out if a SaaS price increase will pay off?
Compare current MRR (customers × price) with projected MRR (customers × (1 − customer loss) × price × (1 + price increase)). If projected MRR is higher, the price rise pays off at that level of customer loss.
What is the break-even churn for a price increase?
The share of customers you can lose before a price rise stops paying off: price increase ÷ (1 + price increase). For a 20% increase it is 20 ÷ 120, about 16.7% of customers.
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