By Phil Harwood
What would happen if you raised your prices by 18%? Would your customers notice? Would you need to explain yourself? Would it hurt your sales and renewals? Or would it be a non-event, completely overlooked by everyone? A company with 140 million customers just announced an 18% price increase and nobody is going to care…
Netflix announced that their basic subscription rate is increasing from $11 per month to $13 per month, and increase of 18.18%. Their other two price tiers are increasing as well. Will anyone even notice? I don’t think so. Here’s why.
Netflix is offering a service that is in high demand, proven by the growth in subscribers. In 2011, the company had 22 million subscribers. In 2017, the company hit 100 million subscribers. Today, the company has almost 150 million subscribers. Something is working for Netflix. When demand is high, it’s time to raise prices.
Netflix is creating its own content and subscribers are eating it up. Paying an extra $2 per month is a small price to pay for something that provides hours and hours of entertainment. However, creating content is expensive and the company needs more cash to create more content. If you can give your customers a reason to justify a price increase, it will be much easier to swallow.
Here’s the bottom line. If your customers really value what you do, they’ll pay what is needed for your service. If you need to raise prices by 18% and can justify it, go for it. Think about any product or service you really love. Would a price increase change your loyalty? I doubt it.
As you think about renewals, don’t be afraid to ask for price increases. Maybe you don’t need an 18% price increase, but then again… why not?
By the way, GrowTheBench.com is NOT raising prices. :)
Now go forth.
Tags: Price Increase , Pricing ,