Key Takeaways

• Pricing increases, both internal to your brand and external, will likely impact how subscribers spend their dollars with you.
• Avoid overly frequent pricing increases. Subscribers will be amenable to the occasional price increase if done sparingly and communicated transparently.
• Price transparency can increase purchasing by 20%. Show customers the value that goes into your product that necessitates price increases.
• True growth is in revenue, not necessarily just numbers. Use unit economics to ascertain the most profitable and sustainable pricing strategy for your brand.

Pricing increases may be inevitable, but don’t have to be painful

The past few years have been tough on consumers. Amidst a cost-of-living crisis, CPG sales are declining as shoppers spend less often and scrutinize prices more closely. Over 50% of retailers raised prices in 2023 to offset inflation, labor, and manufacturing costs.

But today’s consumer is unpredictable: while many are cutting back - even on essentials like food - 40% also plan to splurge in the coming months. Instead of cutting entire categories, they’re becoming more selective and seeking greater value for their money.

eCommerce brands have an edge over brick-and-mortar retailers thanks to leaner cost structures (no rent, fewer employees, more efficient logistics). This allows them to offer better deals and still protect margins. Yet rising costs mean even digital brands must “do more with less.” Even if you’re not raising prices, consumers’ wallets are being squeezed by other brands that are.

With as many as 24% of eCommerce subscribers signing up for financial incentives, subscription managers must approach pricing changes carefully. Done right, a pricing increase can protect profits while preserving subscriber loyalty.

• Avoid increasing prices frequently, which can sour customer relationships. Plan ahead to ensure your prices increase at a reasonable rate and build on consumer trust.
• Run a unit economics analysis on different pricing strategies to maximize profitability while still offering your subscribers the best deal.
• Why legacy pricing can actually inhibit growth despite common misconceptions about it increasing retention. And how to use price transparency during a price increase to actually increase purchasing by up to 20%.
• Communicate your pricing increase plan transparently and as expediently as possible with your subscribers.
• Highlight subscriber-exclusive value adds to stay subscribed through your pricing increase.

We’ll also unpack some results we’ve seen with brands increasing prices - these may surprise you!

Avoid increasing prices too frequently

Subscribers are some of the best and most loyal customers your brand will have. Imagine loving something so much you want it on repeat; today and every day. That level of often emotional attachment can very easily turn sour if the relationship feels distrustful or mishandled. 

To make sure your subscribers continue to trust and love your brand as much as you care about them, avoid implementing overly frequent pricing increases. 

Plan ahead to ensure you budget for a certain, reasonable number of pricing increases over your fiscal year. Candidly, we recommend avoiding more than 1 every couple of years; but understand margins look different for every business. Through our 12+ years of experience in the subscription space, we’ve found that while nobody loves price increases, subscribers will tolerate them up to a certain threshold:

To help avoid increasing prices unnecessarily frequently, let’s run a quick unit economics analysis to find the most profitable and sustainable combination of pricing increase + subscription incentive.

📝 Use Unit Economics to find a profitable price increase and subscription incentive duo

Depending on the main instigator of your pricing increase (rising inflation impacting SCM costs, product improvements or brand expansion, etc.), you’ll have some different goals in mind with this move. Largely, the goal of a pricing increase is to improve the profit of your company. (aka, make more money to improve your product, company, and brand.)

Like we’ve broken down in our Unit Economics exercise (get your free discount calculator and video tutorial here), your business needs to leverage unit economics to find the most profitable subscription discount to offer. 

It’s a common misconception that offering a subscription discount means saying goodbye to your profit margin. Our research (and the math) proves this wrong - higher discounts will almost always mean higher retention, which boosts your Lifetime Value (LTV) and overall profitability. Customers with no incentive to return will mean a never ending need to generate new traffic; driving up overall marketing costs and lowering your overall profits. Use our unit economics exercise to calculate the best offer for your specific business metrics, like Gross Profit, CAC, and Lifetime Orders.

You can (and should) leverage this same framework to find the best combination of price increase and subscription discount to offer subscribers the best deal while still making an optimal profit. Download our free calculator here and run an analysis for your current Cost of Goods Sold (COGS) and subscription discount, and play around with it. 

Our suggestion? Explore larger discounts in tandem with your price increases that you think will significantly increase the lifetime orders of a customer. We usually find that brands can simultaneously give customers larger discounts and make more lifetime gross profit, after CAC, with a compelling discount. You can run this analysis for your brand using the unit economics template we included above.

Legacy Pricing

What is legacy pricing?

Also called “grandfathered pricing,” this approach keeps existing subscribers on older pricing while new customers pay more. It’s common in SaaS, but less so in CPG. As more CPG brands adopt subscriptions, many are asking: raise prices for everyone, or keep early subscribers at their original rate?

Retention vs. revenue growth

• Repeat customers drive 300% more revenue than first-timers.

• Brands often assume raising prices will upset loyal customers, but research shows otherwise: price transparency can boost purchase intent and conversion by 20%.

• Customers expect brands to improve products over time—and those improvements come with costs. Communicating this clearly can actually strengthen loyalty.

Growth priorities

The right growth strategy actually depends on a pricing strategy that takes into account product improvements and changes. Keeping customers on a legacy pricing plan; while potentially retaining customers in numbers, may actually hinder your growth by limiting the revenue growth potential of the customers you do have.

• Growth = more revenue, not just more customers. 

• Keeping subscribers on outdated pricing may inflate subscriber counts but limits true revenue potential.

• Transparent communication around improvements and pricing helps protect both subscriber count and revenue growth.

Operational complexity

• Multiple pricing cohorts make subscription management harder.

• Legacy pricing requires maintaining separate offers, adjusting discounts, and deciding whether legacy subscribers get included in incentives or future increases.

• If reactivated, legacy subscribers often keep their old rate indefinitely—further complicating operations.

Conclusion

Market research shows the most successful brands rarely use legacy pricing. Instead, they roll out fair, transparent price increases that reflect product improvements—protecting retention while driving sustainable growth.

How to create customer comms for pricing increases

In these cases where price increases are unavoidable and are in the best interest of your business’s growth, try to be as proactive as possible when communicating with subscribers. Like we broke down above, price transparency can positively influence purchasing even when costs are increased.

So here are a few guidelines to follow for transparent subscriber communication when increasing your prices.

🌟 Segment customers by product they’re subscribed to. McKinsey research reveals that a near 80% of consumers expect a personalized experience - don’t notify subscribers of a price increase to a product they’re not subscribed to.

🌟 Be clear about the exact change to costs, and which products will be impacted.

🌟 Give customers a couple of order cycles to make adjustments to their subscription order. This makes it clear you’re not trying to be dishonest with them about this price change, and is a sound investment to a long term customer relationship. 

🌟 Give them a hard cutoff date they can expect their price to increase. This leaves no ambiguity as to when this change will impact their subscription.

🌟 Price transparency can actually increase purchasing interest by 20%. Be as transparent as possible about the “why,” or the cause of this increase; and how it ties into an impact on your loyal customers. 

More on this in the next section, but here’s an example of this language in a social post from Rhode Beauty:

🌟 Emphasize that being a subscriber still guarantees the best deal from your brand. Highlight subscriber exclusive benefits like your % off incentive structure and/or your shipping costs. 

And for all flash sales or onsite promos, we recommend matching all subscribers receiving an order during this time period. You should underline these policies in your program landing page (more on that here), but call it out again in this price increase communication, like in the example below:

🌟 Give subscribers options or alternatives for lower price points. Is there a smaller quantity of this product that will keep them at a similar price range? Do you offer Prepaid subscriptions with a steeper discount that allows you to offer customers a lower price if paying for multiple orders ahead of time (more on that here)?

🌟 Link to an FAQ landing page dedicated exclusively to this price change. Getting ahead of these questions will alleviate some bandwidth for your support team, and assure subscribers that you’re dedicated to a smooth transition.

🌟 Remind subscribers of their subscription management options, including changing their frequency to receive this product less frequently to save on costs.

Here’s an example of a real subscription price increase email from Ordergroove merchant Bonafide:

And here’s their FAQ page, linked from the email:

📝 Try it now: Implementing a price increase with an active subscription program

We dove into a lot today! Let’s apply these learnings.

Avoid increasing prices too frequently; but when you do enact a pricing increase, Ordergroove obtains product price information through the regular Product Feed transfer. This means any change to the SKU’s price will sync automatically to all subscriptions. 

Run a unit economics analysis to understand what margins you should account for and by how much you should adjust your product prices.

Our research has shown that legacy pricing can actually inhibit healthy business growth. Work with your Ordergroove CSM to ascertain whether legacy pricing makes sense for your business.

When increasing prices, communicate transparently with your subscribers and highlight your product improvements + other factors that not only have contributed to this increase, but have benefited the customer experience + your product.

Our Klaviyo and Attentive integrations let you segment subscribers by active subscription product. Alert all subscribers with an active subscription to an impacted product and follow our guide for strategic messaging to avoid misinformed churn.