Most indie hackers underprice their product. They pick a number that feels "fair" during launch week, never revisit it, and leave thousands of euros on the table over the life of the business.
Pricing is not a one-time decision. It is a lever you should pull regularly, and pulling it well can double your revenue faster than acquiring new customers. Here is how to know when it is time and how to do it without blowing up your customer base.
Signals That You Are Underpriced
You do not need a pricing consultant to spot these. If two or more apply to you, it is probably time to raise prices.
Your Conversion Rate Is Too High
A healthy trial-to-paid conversion rate for SaaS is 3-8% for freemium and 15-25% for free trials. If your conversion rate is above 40%, your price is probably not a barrier to anyone -- which means you could charge more and still convert well.
Nobody Pushes Back on Price
When was the last time a prospect said "That is too expensive"? If the answer is "never," you are leaving money on the table. Healthy pricing means about 20% of prospects think you are too expensive. Those are not your customers anyway.
Customers Say "This Is a No-Brainer"
When customers describe your product as an obvious deal, they are telling you the value they get far exceeds what they pay. That gap is your pricing opportunity.
You Can Raise Prices and Churn Stays Flat
The ultimate test. If you raise prices 20-30% and your churn rate does not change, you were underpriced. Many indie hackers have done this and seen zero incremental churn because the product's value justified the higher price all along.
Your Competitors Charge More
Do a quick competitive audit. If competitors with similar (or worse) features charge 2-3x what you do, your pricing signals "cheap" -- which some customers interpret as "not serious."
The Pricing Ladder: Free, Starter, Pro
Most indie SaaS products benefit from a three-tier structure:
Free (EUR 0)
- Purpose: Remove the adoption barrier, build the top of funnel
- Include: Core functionality with limits (e.g., 1 project, 100 subscribers)
- Goal: Get users to experience value so they upgrade
Starter (EUR 9-19/month)
- Purpose: Capture hobbyists and early-stage founders
- Include: Higher limits, basic integrations, no branding removal
- Goal: Be an easy "yes" -- low enough that people do not need approval
Pro (EUR 29-79/month)
- Purpose: Capture serious users who get real business value
- Include: Unlimited usage, all integrations, priority support, white-labeling
- Goal: Capture the willingness-to-pay of your best customers
At IndieBase, we use exactly this structure: Free at EUR 0, Starter at EUR 9/month, and Pro at EUR 29/month. The gap between tiers is deliberate -- each step up should feel like a meaningful upgrade in value, not just slightly higher limits.
Want to model how different price points affect your revenue? Use the SaaS Calculator to play with the numbers.
How to Actually Raise Prices
Decide: Grandfather or Migrate?
This is the biggest decision. You have two options:
Grandfathering -- Existing customers keep their current price. New customers pay the higher price.
- Pros: Zero churn from existing customers, no angry emails, builds loyalty
- Cons: Revenue increase is slower, creates pricing complexity over time, some customers feel entitled to the old price forever
Migration -- All customers move to the new price after a grace period.
- Pros: Cleaner pricing, faster revenue impact, no long-term pricing debt
- Cons: Some customers will cancel, requires careful communication
For most indie hackers, grandfathering with a time limit works best: "Current customers keep their price for 12 months, then move to the new pricing." This gives you the loyalty benefit without the forever commitment.
Communication Templates
How you communicate the change matters as much as the change itself. Here are two templates:
For grandfathered customers:
Subject: We are updating our pricing (you are locked in)
Hey [Name],
We are raising our prices on [date] to reflect the features we have added since you joined. As a thank-you for being an early customer, your price stays the same for the next 12 months.
After that, you will move to the new pricing: [new price]. You can lock in annual billing at the current rate if you prefer.
Thanks for being part of this journey.
For migrating customers:
Subject: Pricing update effective [date]
Hey [Name],
We are updating our pricing on [date]. Your plan will change from [old price] to [new price]. Here is why:
Since you signed up, we have added [feature 1], [feature 2], and [feature 3]. The new pricing reflects the product's current value.
If the new price does not work for you, reply to this email and we will work something out.
The last line is crucial. Offering a personal conversation catches customers who would otherwise just cancel silently. Most will not take you up on it, but the ones who do are often your most engaged users.
The most common outcome of a price increase is anticlimactic -- and that is the point. Most founders agonize for weeks, draft apology emails, and brace for a wave of cancellations. Then they raise prices, a handful of customers ask questions, maybe one or two cancel, and MRR jumps 20-30% overnight. The customers who stay (which is almost all of them) never mention it again. The fear of raising prices is almost always worse than the reality.
Psychological Pricing Tactics
Anchor High, Then Discount
Show the highest tier first. When someone sees Pro at EUR 29/month before they see Starter at EUR 9/month, the Starter plan feels like a bargain rather than an expense.
Annual Discounts as a Lock-In
Offer 2 months free on annual billing (effectively a 17% discount). This does two things: it improves your cash flow and it reduces churn because customers have prepaid for a year.
Price in Value, Not Cost
Do not set your price based on what it costs you to run the servers. Set it based on the value the customer gets. If your tool saves a founder 5 hours per month and their time is worth EUR 50/hour, your tool is saving them EUR 250/month. Charging EUR 29 for that is a steal.
Use Odd Numbers Strategically
EUR 29 feels meaningfully cheaper than EUR 30, even though the difference is trivial. But do not go too far -- EUR 27.99 looks like a consumer app, not a B2B SaaS product. Stick to clean numbers ending in 9.
When NOT to Raise Prices
Price increases are not always the answer. Hold off if:
- Churn is already above 8% monthly. Fix retention first. Raising prices with high churn accelerates the problem.
- You just launched. Give yourself 3-6 months of data before adjusting. You need enough customers to see patterns.
- Your product has major gaps. If customers regularly request basic features you do not have, charging more for what exists will feel unfair.
- You have not validated with customers. Talk to 5-10 customers about value and willingness to pay before committing to new pricing.
Tracking the Impact of Price Changes
After raising prices, track these metrics for 90 days:
- MRR growth: Are you adding more MRR per new customer? (See our MRR guide for formulas)
- Churn rate: Has it increased? By how much?
- Trial conversion rate: Are fewer people converting from trial to paid?
- Customer LTV: Higher price with same churn = higher LTV
The ideal outcome: MRR per new customer goes up, churn stays flat or dips slightly, and LTV increases. If churn spikes more than 2-3 percentage points, you may have overshot -- but a small increase in churn is often worth a large increase in ARPU.
The best approach to pricing is to treat it as an ongoing experiment, not a permanent decision. Start simple -- maybe a single plan at a price that feels slightly uncomfortable. After a few months, add a second tier based on what customers actually ask for. Six months later, adjust the limits based on real usage data. Each iteration gets you closer to a pricing structure that reflects real value. The founders who get pricing right are not the ones who nailed it on day one -- they are the ones who kept adjusting.
Pricing Is a Feature
Think of pricing as a product feature you iterate on, not a fixed attribute. The best indie SaaS founders revisit their pricing every 6-12 months, test new tiers, and adjust based on data.
You do not need to get it perfect. You need to get it less wrong over time. Start by looking at the signals above, talk to a few customers, and make a change. The worst case is you learn something. The best case is you double your revenue.
Track how pricing changes affect your MRR. Start free