Board prep

Before you change pricing: decide the policies and the walk-back rule

Before you commit to a pricing change, write down the policies that decide how it lands: who keeps the old price and for how long, how much notice each contract requires, which customer groups are most likely to leave, how sales commissions and discounts will work, what each plan includes, and how long you will measure before judging the result. Then set the rule for walking it back. Paste the pricing proposal, customer counts by plan and contract type, churn history, the commission plan, the draft pricing page, and contract notice terms from counsel into one request. Instruct Pingpong to mark which policies are decided and which are still open, and to flag the customer groups the change hits hardest. Review your written answers in a second round.

This page is for chief executives, finance and revenue leaders, and directors deciding whether a pricing change is ready to commit. Executive starting points live under Pingpong for executives.

The policies to decide first

  • Grandfathering: whether existing customers keep their price, for how long, and whether that differs by plan. "Case by case" means sales and support will each decide differently.
  • Notice: what each contract type and the terms of service require, confirmed by counsel. Monthly and annual customers usually need different dates.
  • Churn risk by group: the customers facing the largest jump in price or packaging, and how similar groups behaved after past changes.
  • Commissions and discounts: what reps earn on increases they did not sell, and who can approve a discount.
  • Packaging: one description of each plan, used on every page, deck, and help article.

Set the measurement window and the walk-back rule

Pick the measures, the comparison period, and the length of the window before launch, so early noise does not decide the outcome. Then write the threshold that triggers a change, who makes the call, and what the change would be.

A worked example

This example is illustrative and does not describe a customer. A 90-person design collaboration software company plans to raise its team plan from $15 to $19 per seat each month and move single sign-on from the team plan to the enterprise plan. Most customers pay monthly through self-serve, and the rest sign annual contracts.

The chief executive pastes the proposal, plan and contract counts, churn after the last price change, the commission plan, the draft pricing page, and counsel's summary of notice terms.

A useful pass finds the grandfathering policy undecided, with growth proposing three months and customer success arguing for no end date. About 1,100 team accounts use single sign-on, and moving it to the enterprise plan would more than double their cost. Those accounts, mostly above 50 seats, carry the most churn risk, and the proposal never mentions them. Counsel's summary shows monthly customers need 30 days' notice under the terms of service, while annual customers keep their price until renewal. The commission plan would count renewal price increases as new bookings, paying reps for changes they did not sell. The draft pricing page, the sales deck, and a help article describe the team plan three different ways. The plan says to "watch conversion" with no window, and the launch falls in a quarter when trial volume usually dips. Nothing says what result would reverse the change.

The revised plan applies the new price to new customers at launch. Existing monthly customers move after 90 days' notice, and annual customers move at renewal. Accounts already using single sign-on keep it on the team plan through their next renewal, with a discounted enterprise offer for the first year. Renewal increases earn a reduced commission rate, and discounts above 10% need approval. One packaging description replaces the three. The measurement window runs eight weeks, comparing trial-to-paid conversion and monthly churn against the same weeks last year. If trial-to-paid conversion falls more than 15% relative to that baseline, or churn among single sign-on accounts doubles, the chief executive and chief financial officer adjust the change on terms agreed in advance.

For an adversarial session on the revenue forecast before the board, see war-game a pricing change before the board books the revenue.

A request you can copy

Below are our pricing proposal, customer counts by plan and contract type, churn history, commission plan, draft pricing page, and counsel's summary of notice terms. Mark each policy decided or open: grandfathering, notice, churn risk by customer group, commissions and discounts, and packaging. Identify the groups facing the largest increase. Check whether we have set a measurement window, a baseline, and a walk-back rule. Mark contract questions for counsel. Stop there so we can answer in writing, then review our answers.

How Pingpong runs the review

The web review app sends your request through several models in order. Each later model receives the original request and every earlier answer, with instructions to assess the work so far. For the steps inside the app, see running your first review.

What a model can't review

A model does not know how your customers value the product, what competitors charge in private deals, or what each contract says beyond the summary you paste. Counsel owns notice obligations, and you and the board own the decision.

When the decision goes to the board, see war-game a decision before the board meeting. More guides live under work decisions before you commit.