How grandfathering works
When you change a plan's price, you create a new price for new customers and leave current subscribers on the old one. Their renewals keep billing at the old amount, while everyone who signs up from then on pays the new amount.
Grandfathering can last forever, for a fixed time such as 12 months, or until a date you announce. When it ends, the grandfathered customers are migrated to the new price, usually at their next renewal so nobody sees a charge in the middle of a period.
Over the years a business can end up with several old prices still billing. Keeping a record of which customers are on which price, and what each old price was, is what makes a later migration possible.
Worked example
A project tool raises its plan from $40 to $50 a month on June 1. It has 120 customers on the old price, and 30 new customers sign up in June.
- 120 grandfathered customers × $40
- $4,800
- 30 new customers × $50
- $1,500
- MRR after June
- $6,300
Moving all 150 customers to $50 would make MRR $7,500: $1,200 more a month, and the question of how the 120 would react.
Why grandfathering matters
A price rise that lands on every existing customer at once is the kind of change that makes people look at alternatives. Grandfathering lets you raise prices for new customers without breaking a promise to the ones who trusted you first.
It also costs revenue, and the cost grows with every price rise. That is why many businesses grandfather for a set time, then migrate everyone with plenty of notice.
Common mistakes
- Editing the live price Changing the amount on a price every customer is on moves them all at once, often without notice. Create a new price instead.
- Promising forever without meaning it If the old price will end one day, say so from the start. Taking back a forever promise costs more trust than a time limit would have.
- Migrating mid-period by surprise Moving customers to a higher price in the middle of a period creates an unexpected charge. Migrate at renewal and give notice first.