Part Two: The product · Trouble and change
Costs rise and prices must follow. People who built their work around the old terms feel the ground move under them.
A customer who chose a product three years ago made a calculation. This much a month, for these limits, with these features. They then built on it: trained staff, moved their records in, set their own prices by it.
The company has changed since. Hosting costs more. New customers pay twice what the early ones do. On a spreadsheet, the old accounts are money left on the table, and one email could collect it.
A property manager gets that email. Their plan no longer exists, the nearest one costs more and counts buildings differently, and they have thirty days. Moving two hundred tenancies would take a season, so they pay, and they start looking. A rise imposed on someone who cannot easily leave collects the money and spends the goodwill of people who took a chance early.
37signals made the opposite promise about the product, and wrote it down. When a new Basecamp launched in 2012, customers on the original were not made to move. Its policy, "Until the End of the Internet," says every version of Basecamp will keep running for the customers on it, and Basecamp Classic still runs for those who stayed. The promise is about software, and the same holds for price: what a customer built their work on stays put.
A scheduling tool raises its rate for new sign-ups from twelve dollars a seat to twenty. The salon that joined in its first year goes on paying twelve, and each invoice says so.
The early customers wrote the first reviews, and still pick up when a prospect asks for a reference. What they say on that call depends on how the last price change went.
Therefore:
Charge new customers the new price. Let existing customers keep the price and terms they signed up for as long as you can afford to. If their deal must change, give long notice and plain reasons.
In practice. Find your ten oldest paying customers and look at what each pays and what they were promised. Settle now, before anyone proposes a price change, what you will never do to them.
Goes with. Any price should be A PRICE YOU CAN EXPLAIN (13). A rise is only fair to people who are free to go: EASY TO LEAVE (15). Habits deserve the same respect as contracts: CHANGE SLOWLY WHAT PEOPLE KNOW (56).
Source: 37signals, "Until the End of the Internet" policy.