I tripled the price and lost sixty per cent of my customers

OneWho is telling this?

I founded a scheduling product for clinics. Twelve people now, all in Bengaluru, all hired by me. No co-founder; I have never had one, which is the single fact that shapes everything else here.

Four years in the chair. At the time of this story we were at $431,000 of annual recurring revenue across 1,240 accounts, which is a number I could recite in my sleep because I recited it to myself most nights.

TwoWhat was the decision?

Raise the price from $29 a seat to $89 a seat, for everyone, with a ninety-day grandfather. Or keep the price and hire two more support engineers I could not really afford.

I knew in October, when I did an exercise I recommend to anyone: I ranked every account by support tickets per dollar of revenue. The bottom two hundred accounts generated 41% of our tickets and 6% of our revenue. They were not bad customers. They were customers for whom the product was slightly wrong, and who were compensating with our time.

Option one on paper: $89, expect to lose half, end up with a smaller and sane business. Option two: $29 forever, hire support, and be a company whose main activity is answering questions about a product that costs less than a dinner.

ThreeWho did you talk to before you decided?

Two other founders in a WhatsApp group, both of whom told me to do it, and both of whom sell to enterprises and have never priced anything at $29.

My support lead, who told me the truth, which was that she had been apologising for the product to people who could not afford anything better and that it was making her ill.

I did not talk to a single customer. That is the whole error and it took me eleven weeks to see it. I ran a pricing decision entirely on internal data because I had no one to tell me that a price is a message and I had only examined it as a number.

Having no co-founder means there is no one in the building whose judgement is not downstream of your salary. I want to be careful not to make that sound romantic. It is just a structural fact and it cost me here.

FourWhat were you afraid of the night before?

That I would send the email and discover the product had never been worth $29.

I told myself that if a price increase kills the company, the company was already dead and I was just finding out the date. That is true and it is also the kind of thing you say at two in the morning to stop yourself from opening the spreadsheet again.

The cost was not sleep, it was a kind of isolation I had not felt before. I had made bigger decisions. This was the first one where I could not construct a version of the reasoning that would survive being explained to someone who disagreed, because there was no one to explain it to.

I thought the risk was that the price was too high. The risk was that I had no way to tell the customers I wanted to keep that I wanted to keep them.

FiveWhat did you actually do that morning?

I sent one email to 1,240 accounts at 9am IST. Subject line: 'Pricing is changing on 1 February.' It was four paragraphs, it was honest, it explained the ticket ratio, and it was addressed to nobody.

That is what went wrong. One email, one message, to a list that contained three entirely different kinds of customer: clinics for whom $89 was trivial, clinics for whom it was impossible, and about two hundred accounts who would have paid $200 if I had ever asked them what they needed.

The first reply arrived in four minutes and was one line: 'after five years?' I have that email still. I answered all 612 replies myself over nine days. By the third day I was copying and pasting, and the customers could tell.

SixWhat did it cost?

We went from 1,240 accounts to 484 in eleven weeks. Revenue dipped for one quarter and finished the year at 2.1 times where it started. Support tickets fell from about 310 a week to 74.

Two of the twelve people left, both from support, both because the job they had been hired for no longer existed, and I handled the first of those conversations badly by pretending it was unrelated.

The number that surprised me: 38. That is how many accounts wrote back asking for a plan between $29 and $89. I did not have one. I built one in March and 29 of those 38 took it. I had lost eleven weeks and a lot of goodwill discovering a tier that a single conversation in October would have revealed.

SevenWas it the right call?

The price was right. The launch was wrong, and the two are separable in a way I did not understand at the time.

In practice I would do three things differently. Call twenty customers in October. Not survey, call. Segment the email into three messages instead of one. And ship the middle tier on day one rather than in month four.

I would not change the number, the ninety-day grandfather, or the decision to apply it to existing customers rather than only new ones. Grandfathering existing customers forever is the polite option and it quietly guarantees you spend the rest of the company's life running two businesses.

What I got right and do not get credit for: I answered every one of those 612 emails personally. Badly, by the end. But the 484 accounts that stayed include a lot of people who stayed because a human answered on a Sunday.

EightWhat does the next CEO need to hear?

A price is a message before it is a number. I thought the risk was that the price was too high. The risk was that I had no way to tell the customers I wanted to keep that I wanted to keep them. Everyone got the same four paragraphs, so everyone concluded the same thing: that they were a line in a spreadsheet, which on that day they were.

Rank your accounts by cost-to-serve before you touch price. The list tells you what the price is actually for. Mine told me I was running a support organisation with a software product attached.

If you have no co-founder, buy the disagreement. Pay an advisor, join a group, find one peer who owes you nothing. I did not, and the specific thing I lost was not analysis; it was somebody to say 'you have only examined this as a number.'

The thing everyone says that turned out to be false: 'you can always lower it again.' You cannot. Not because of pricing mechanics, but because the email has been read. The number is recoverable; the message is not.