How to use it
- 1Enter your number of paying customers and your gross margin today.
- 2Set the current and new monthly price. For annual plans, divide the annual price by twelve.
- 3Enter how many customers you honestly expect to cancel because of the change.
- 4Compare your expected loss with the two break-even points. If the bar stays in the green zone, the increase pays for itself even after the churn.
Examples
$29 → $39 for 800 customers
A 34% increase. MRR stays flat even if 25.6% of customers leave; gross profit (at 85% margin) stays flat up to 28.9%. Expecting to lose 8%, MRR goes from $23,200 to $28,704 and gross profit rises by about $5,800 a month.
Low-margin AI product, $10 → $12
At 60% gross margin (model costs eat 40%), the revenue break-even is 16.7% but the profit break-even is 25%. Losing 10% of 1,000 customers still raises MRR by $800 and gross profit by $1,200 a month — the leavers were each costing $4 to serve.
When an increase backfires
$20 → $30 for 250 customers at 90% margin. The break-even loss is 33.3% on revenue and 35.7% on profit. If 40% cancel — plausible for a price-sensitive audience with cheap alternatives — MRR falls from $5,000 to $4,500 and profit falls too. That's the case for testing on new signups first.
The break-even formulas
Revenue break-even loss = 1 − P₀ ÷ P₁, where P₀ is the current price and P₁ the new one. At that loss, fewer customers paying more exactly equals today's MRR.
Profit break-even loss = 1 − (P₀ − C) ÷ (P₁ − C), where C is the monthly cost to serve one customer, derived from your margin: C = P₀ × (1 − gross margin). Serving cost is assumed not to change with price.
MRR and gross profit after the change apply your expected loss to the customer count and multiply by the new price and new per-customer margin.
Limitations
- infoOnly cancellations are modelled. Price changes also slow new-customer conversion, which this doesn't capture — watch trial-to-paid rates for a few weeks after the change.
- infoIt's a steady-state comparison of one month before and after. Timing effects such as notice periods, annual renewals and refunds aren't included.
- infoServing cost per customer is assumed fixed. If the customers most likely to leave are also your lightest users, real profit results will be slightly worse than shown.
Questions people ask
How many customers can I lose after raising prices?
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On revenue, the answer is 1 − old price ÷ new price. A 20% increase (from $10 to $12) can lose 16.7% of customers before MRR drops. On gross profit you can usually lose more, because each customer who leaves also takes their serving cost with them.
Why is the profit break-even higher than the revenue break-even?
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The calculator holds the cost of serving a customer constant. When a customer leaves you lose their revenue but also stop paying for their hosting, support and API usage, so profit tolerates more loss than revenue. The lower your gross margin, the bigger that gap.
How much churn does a price increase usually cause?
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There's no reliable universal number — it depends on how much value customers get, what alternatives cost, and how the change is communicated. Grandfathering existing customers, giving 30–60 days' notice, and pairing the increase with new features all reduce it. Test on new signups first if you can.
Should I grandfather existing customers?
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Grandfathering eliminates churn from the change but also delays the revenue. A common middle path: new customers pay the new price immediately, existing ones move after 6–12 months with notice. You can model that here by running the calculator twice — once with a low expected loss for new customers only.
Does this account for customers who downgrade instead of leaving?
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No. It models customers either staying at the new price or leaving. If you expect downgrades to a cheaper plan, reduce the new price to the average you expect to collect and run it again.