Industry standard: price increases

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LIUBOMYR POLIARUSH
LIUBOMYR POLIARUSH Member
edited February 29 in Technology & Services Strategy

Hello everyone,

I am working for a SaaS company that has a lot of customers who renew their subscriptions annually. Due to certain reasons, we need to increase the prices for our existing customers.

I wanted to know if there is any industry standard for price increase % for annual subscriptions. Also, should the price increase be the same for both new purchases and renewals of existing licenses?

Thank you!

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  • Jerome Peck
    Jerome Peck TSIA Administrator | admin
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    @Gerry Nolan @Hal Stanley Any insights on this question from Liubomyr?

  • Hal Stanley
    Hal Stanley Member | Enthusiast ✭
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    @Jerome Peck thanks for the heads-up. The TSIA Offering Management benchmark establishes that across the industry companies increase prices on service offers in-line with inflation — about 3% per year on average. We saw a significant spike in 2021 and 2022 when inflation rates also spiked. Large companies during that time, for example, bumped prices up more than 8% on average. We do not typically see significant variation between the price increase practices for initial product offers versus renewals.

    It's key to note that pricing is hard and it's more than keeping up with inflation. Companies that deepen their market discovery and identify more tangible value drivers for customers can shift to value pricing models that boost profitability.

    We talk pricing most days in the Offering Management research area; reach out if we can help further!

    -hal

    VP, Offering Management

    TSIA

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