The Figures Price Evolution: Why Tripling Prices Didn’t Hurt Customer Acquisition
Most founders fear pricing changes like they fear a recession. In a recent Category Visionaries episode, Figures CEO Virgile Raingeard shared how starting with “ridiculous” pricing led to a successful 3X price increase that didn’t hurt sales at all.
The Low-Price Starting Point “So I started charging €400 per year for the smaller scale startups to €2500 or something like that,” Virgile recalls. “And it was a ridiculous price.” This initial pricing wasn’t just low – it was strategically low, though they didn’t realize it at the time.
The Network Effect Strategy Even after launching their product, Figures initially lowered prices further. The logic was compelling: “Because we’re mostly a mix between a database business and a product SaaS products, right? But for the data set to become valuable, we need more company.” They believed lower prices would accelerate data collection.
The Pricing Wake-Up Call The turning point came through education. “Then afterwards I started reading some pricing strategies, advices,” Virgile explains. “And I realized it was a huge mistake. I devalued the value of our product and I increased pricing by three X June 2021.”
The Surprising Result The outcome defied conventional wisdom: “And it didn’t impact at all our win rate at the time.” This revelation suggests they had been significantly undervaluing their service, a common mistake among B2B SaaS companies.
The Renewal Challenge However, the price increase wasn’t without its challenges. “That was a nightmare,” Virgile admits. “That was the first hundred or so customers, and those ones have been a nightmare to renew.” The company had to navigate not just price increases but also growth-based pricing adjustments: “Not only our pricing changed, but your headcount grew.”
The Delegation Solution Rather than handling these difficult conversations himself, Virgile found a smart solution: “I hired my first salesperson when were still post trapped, and she’s the one who had to deal with Renewing client.” This delegation proved crucial for managing the transition.
Key Lessons for B2B SaaS Founders
- Low Initial Pricing Can Build Data Networks While Figures initially saw their low pricing as a mistake, it helped build their valuable data network. Sometimes, what seems like a pricing error can serve a strategic purpose.
- Price Increases Don’t Always Hurt Sales The fact that tripling prices didn’t affect win rates suggests many B2B companies are underpricing their products. When your value proposition is strong, customers will pay more.
- Grandfather with Caution The challenge of renewing early customers at higher rates suggests the importance of careful grandfathering strategies. Consider building price increase triggers into initial contracts.
- Delegate Difficult Conversations Having dedicated sales staff handle price increase discussions can help maintain founder focus and professional distance from potentially difficult conversations.
For founders building B2B SaaS companies, Figures’ experience offers a compelling case study in pricing evolution. Starting low might help build initial traction, but don’t let early pricing define your product’s value. When you’ve proven value and built a strong data moat, customers will often accept significant price increases without blinking.
The key is understanding when you’ve transitioned from building the network to monetizing it. As Figures demonstrates, timing this transition right can lead to substantial revenue growth without sacrificing customer acquisition.