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How To Increase Your Prices Without Upsetting Customers

It is a simple fact of business life that as you continue to grow and expand – costs rise. This is a natural process that can occur from increases in numbers of employees, increases in wages and suppliers raising their prices to name a few reasons.

At some point you will have to consider whether or not to raise your own prices, yet this can be met with some resistance by your customers.

Some previously loyal customers may leave your business in order to find other service providers. Others could be speaking more to your customer services, taking up valuable employee time. This is probably why many businesses decide to absorb rising costs themselves rather than face the wrath of their customers.

Increasing your prices without upsetting all your customers is possible. However, it requires a significant amount of planning and skill to achieve. Here are some of the methods you can use in order to raise prices and still maintain the majority of your customer base.

1. Surprise And Delight Your Customers

The first trick starts long before you need to increase your prices. If you are able to satisfy the needs of your customers and excel their expectations they are likely to tolerate the odd price rise. On the other hand, should you only just be managing to support them and they are often finding mistakes or problems with your service, they are not going to want to pay more.

This doesn’t mean the odd mistake should prevent you from increasing your prices as long as you are quick at dealing with any problems to the customer’s satisfaction.

2. Communication

You need to ensure you are explaining when and why you are going to raise the price of your services. Customers like to know in advance for their own financial planning and providing a solid reason for the price increase can help them be more understanding.

Giving at least two months warning is probably the best time frame, enough time to plan for the increase yet close enough that it is not forgotten when the new price on the invoice comes in.
Avoid using the excuse of rising costs. This may be a primary reason, yet some businesses using this model come under heavy scrutiny. Some organisations have increased their prices, blamed on higher costs of resources, only weeks before they announce an even larger increase in profits.

As a business you have to make money but customers will not be kind if they see your wealth increase when you’ve told them you’re facing increased pricing.

Instead time your price increases to coincide with other positive changes to the company, perhaps new infrastructure, i.e. new technology being implemented or something else which will benefit your clients. If they see they will gain from the price increase then it will be received more favourably.

3. Add Extra Benefits

Follow the example of Amazon Prime or magazine subscriptions. When they increase the prices they offer customers more features. In Amazon’s case they add more content to their service, giving customers more choice. Magazines will often become larger or decrease the number of advertisements in their publication.

If you can find a way to add features to your service during your price increase you can be sure customers will not mind so much.

4. Do Smaller Amounts More Frequently

Probably one of the biggest mistakes is that companies do not raise their prices soon enough or do it in too big a jump. Customers are going to be more resistant should you increase your price by $5 every two or three years than if you do it $0.50-$0.75 every year.

Many companies do this because they are fearful of losing customers with a price increase. Yet with good communication and an excellent service, a smaller amount is more likely to be overlooked by customers.

5. Restructure / Redesign Your Products

One way of increasing prices is to restructure your products and hide the increase amongst the bigger changes. Sky TV and other satellite TV providers do this frequently by rebranding and renaming their channel bundles.

In these circumstances it can be tough for your clients to see the price increase. Instead they are likely to be studying the new features and structure and comparing it to the old. This may cause some customer service problems, but your agents could be trained to deflect concerns with explaining how the new structure improves the service.

Increasing your prices is a natural part of being in business. Ensure you inform your customers with a good reason and in a timely manner. Also remind them of the benefits of your service at this time and often the majority of your customers will stay with your business.

Do you need recurring billing and subscription management software? Contact one of our experts at, call or check out the Fusebill free trial.

Image courtesy of Kittisak /

Unveiling Fusebill 2014

We are extraordinarily excited to introduce Fusebill 2014 – a major platform upgrade that delivers significant, innovative subscription billing features. Driven by customer requests and market feedback, the major features of Fusebill 2014 focuses on three key themes: Simplicity, Agility and Analytics.

Over the coming weeks we’ll drill into more detail on each theme, and highlight exciting new capabilities. (Or, join our launch webinar Friday January 10 at 2:00 PM eastern)

Simplicity, Agility and Analytics

Fusebill configure subscriptions screenFusebill 2014 makes it easy to do simple tasks. We’ve introduced “Plans” to group together products, charges and time intervals – so provisioning is faster, invoices more clear and reporting more insightful. Create custom payment schedules, review and edit invoices, allocate payments to invoices – you’ll find a wide range of features to make Fusebill simpler.

Agility means that Fusebill can adapt as pricing and billing needs evolve. Fusebill 2014 introduces the Product Catalog to provide a hierarchy of products and plans, so you can create product bundles and provide a la carte options. Mid-month changes, automatic pro-rating give you control.

Fusebill Customer InsightsFusebill 2014 provides powerful business intelligence tools to deliver customer analytics and insights. The subscription-oriented metrics like churn rates, monthly recurring revenues, customer lifetime value have always been a strength of Fusebill. Now there are far more sophisticated tools to analyze those metrics, and more ways to slice and dice them.

Fusebill 2014 is a highly flexible but easy-to-use product designed for a business user, not an IT analyst or a developer. It’s easier to integrate, both into your systems and your workflows, and it provides customer insights through advanced analytics.

See for Yourself!
As the saying goes, a picture is worth a thousand words, and that’s why we invite you to a live demo of Fusebill 2014 presented by Fusebill CEO Steve Adams:

Date: Friday January 10th
Time: 2:00 PM Eastern

Multiple Editions Tips

multiple editionsLet us help you whip your pricing into shape with these tips!

Recently we talked about how you can use irrational decision to build a successful multiple edition price strategy. But that’s just the first step. In this post we’ll give you tips for getting the most out of your editions.

Most sites that use the multiple editions strategy create three options. Nothing says you have to only have three so if you find offering more works better for your business, don’t feel you have to remove some of them.

Tip 1 – Make sure the options or add-ons you include in each of your editions are justifiable by your potential customer. In other words make the decision making as easy as possible.
Tip 2 – Make sure as your editions increase in price that the benefits they provide are substantial.
Tip 3 – Choose prices for each edition that show the value of your service. Most people are wary of things that seem too good to be true so ensure your prices don’t set off any warning bells.

Least Expensive Edition Tips
Your most inexpensive edition should still have value. Keep in mind that people who may not be able to afford the more expensive editions today may be able to in time so use this edition to build brand loyalty. You want your customers to enjoy and benefit from what they are getting to the point that they will want more.

Middle Edition Tips
This is probably going to be your most popular option as it hits that sweet spot for a lot of customers who on one hand don’t want to buy the least expensive option, but on the other want to feel like they are saving money by not choosing the most expensive.

For many people, choosing the middle edition is often viewed as the ‘safest’ option.  Make sure your middle option includes all of the value and functionality of the less expensive edition, but has enough added benefits that it becomes the easy choice to make.  Many people are comforted (often subconsciously) by the thought that a lot of other people have made the same choice they have, so advertising that this is the most popular option will often increase the chance of its being selected.

Most Expensive Edition Tips
The most important reason for the existence of your most expensive edition is to make your other options seem more attractive because they cost less. Not to say you don’t want people to purchase it, so ensure there are substantial added benefits when compared to the middle edition but construct it with this main goal in mind.

Is Irrational Decision-Making Working for You?

Last year we posted an article that looked at the ‘multiple editions’ price strategy, in it we talked about how many subscription companies use this strategy to build different packages,  giving  their customers the ability to choose the one that  best suits their needs.

While we hit on many of the reasons why this strategy is popular, we didn’t go into a lot of detail about how important offering a choice to your customers can be to your bottom line.

So let’s talk about the psychology of choice.

We humans are a funny bunch, we do this thing called irrational decision making where we spend more for something while telling ourselves we are saving money – and we believe it! Even though we know the only way to save money is to not spend it.  This is one of the reasons multiple editions is successful.

Here’s an example. Say you’re walking down the street and you see this sign:

 id 1


If you weren’t looking for a layer cake you would probably walk right by.  If you are you would probably compare the $10 advertised to the price you previously decided was fair or acceptable for you to spend on a layer cake. If the $10 was higher than this amount you wouldn’t stop, but if lower or equal to it you probably would. This is rational decision making.

Now say instead of one sign with one item for one price you see this:


Suddenly not only can you get your layer cake, but you are also presented with options that offer you choices. And how do most people justify spending more than what they initially decided was an acceptable price? By telling themselves they are saving money. Look at all the money I am saving by spending just $10 more!

Now what if the sign looked like this:  


Suddenly the $10 option seems not only inferior, but it seems like spending $10 just to get a cake isn’t worth it when $5 more gets you more (even if you hadn’t planned on buying the add-ons listed). The middle option is not only more attractive looking but the most popular, and by choosing it you can also rationalize it by telling yourself you’re not buying the most expensive option – so you’re actually saving $5. This of course doesn’t make sense, but it does happen – hence irrational decision making.

When using multiple editions for your services you can actually lead customers through this thought process by not only inferring what the acceptable price is but by providing options that make customers think about what they are saving instead of what they are spending. It will take some price testing to find the right price and options but if you keep track of results and make changes accordingly you will find the multiple editions that work best for you!

What’s New in November?

The holiday season is approaching fast – and that means life is about to get very busy for a lot of people!  We’ve decided to start the giving early with this month’s webinars, which include an exciting peek into Fusebill 2014…

Subscription Billing 101

When: 2 p.m., November 14th, 2013,
Register here
Tune in and we’ll offer you an overview of the subscription billing model and recurring billing in general, including the difference between payment gateways and payment platforms and the criteria you should be keeping an eye out for while you’re choosing the right service for your business.


Fusebill 2014 Sneak Peek

When: 2 p.m., November 21st, 2013
Where: Sign up here
Why: Over the past few months, we’ve been very busy developing a brand new Fusebill UI – Fusebill 2014!  It’s clean, easy to use, and has a beautiful new design.  We’re very excited about it, so although it’s not ready yet, Fusebill CEO Steve Adams will be giving everyone a sneak peek and taking your feedback and questions.


Want to see more?  Check out our Webinars page for a look at upcoming webinars and an archive of past recordings on all kinds of topics!  If you have a topic you’d like us to talk about, we’d love to hear it – just send us an email at or comment on this article.

Attention Fusebill Clients: A few hours before the general Sneak Peek webinar, we will be holding a special Sneak Peek webinar just for you! It will take place at noon on Thursday November 21st and you will receive a special email invitation shortly. If you don’t receive your information by end of day today (Monday November 11), please email or give us a call  at 888.519.1425

Tiered vs. Volume Pricing – Do You Know the Difference?

This is the first in a mini-series of articles on Tiered, Volume, and Usage based pricing as part of metered price plans.

We have found that a lot of people think they have a “complex” pricing model only because they are difficult to track manually and not because of anything inherent in the price model itself. We’re hoping that these articles will give people a better understanding of the different types of metered pricing.

A good place to start is to answer the question, what is tiered pricing? This is important because a lot of people think tiered pricing and volume pricing are the same thing when they are actually very different.  Tiered pricing defines a price PER unit within a range and volume pricing defines a price for ALL units within the range.

It’s easier to see how it works using an example. Let’s say you have just sold 60 widgets.

Volume Pricing:
01-20 = $10 per widget
21-30 =  $8.5 per widget
31-40 =  $7 per widget
41+   =  $5.5 per widget
Cost Breakdown:
You have sold 60 widgets.  This is in the range of 41+; all widgets will cost $5.5 each.
Tiered Pricing:
01-20 = $10 per widget
21-30 =  $8.5 per widget
31-40 =  $7 per widget
41+   =  $5.5 per widget
Cost Breakdown:
First  20 widgets cost $10 each
Next 10 widgets cost $8.5 each
Next 10 widgets cost  $7 each
Additional widgets cost $5.5 each

volume vs tiered

Total cost = 60 x 5.5 = $330.00
Total cost = (20 x 10) + (10 x 8.5) + (10 x 7) + (20x 5.5) = $465

With tiered pricing, once you fill up a ‘tier’ – in this case, the first 20 widgets – you move to the next tier and start charging a different price.  The first 20 widgets will cost $10 each.  Once you’ve sold all 20 from tier 1, the next tier costs $8.5 each, the next tier $7, and so on.

Volume pricing, on the other hand, means that as soon as you hit a particular number, all units will cost the lower price.  If someone only buys 20 widgets, each widget will cost $10; but once they get over 20 widgets, the price of all the widgets in their purchase drops to $9 each; then to $8.

See the difference? If you were using volume pricing you would have made $330 for your 60 widgets, but using tiered pricing you make $465, and this difference is based on the cost of each widget.

Are you using volume or tiered pricing for your subscription-based business?  If so, use the comments section to let us know how and why you chose your pricing strategy!

Fusebill is hiring!

Work at FusebillWe are currently looking for four new people to join the Fusebill team! Open positions:


Fusebill is a great place to work, we offer all team members:

  • A fun, collaborative agile, and open working environment
  • A place for continuous learning and growth
  • Flexible work hours
  • A competitive salary with a generous stock option plan
  • Comprehensive benefits
  • Free coffee, tea and snacks
  • Free Parking

And in return we ask that you bring:

  • A desire to learn something new every day
  • Ability to perform in a fast paced environment
  • A customer and business value first mindset

For more information, or to apply for any of the positions below, please contact 

Hope to see you around the water cooler!