Price increase break-even calculator: how many customers can you lose?

Before you raise a subscription price, work out the number that matters: how many customers can leave before the change leaves you worse off. Enter your current price, the new price, your customer count and, if you know it, your gross margin. The result shows the break-even loss for revenue and for gross profit. It runs in your browser and sends nothing anywhere.

The arithmetic

• Price change = new price divided by old price, minus 1. Going from $20 to $25 is +25%.
• Revenue break-even loss = change divided by (1 + change). At +25% that is 20%: with 20% fewer customers paying 25% more, revenue is exactly the same.
• Gross profit break-even loss = price increase in dollars divided by the new price minus the cost to serve one customer. It is never smaller than the revenue figure: a lost customer also removes the cost of serving them, so the lower your margin, the more customers you can lose. At a 100% margin the two figures match. In this tool, cost per customer is old price times (1 minus margin).

Worked example: 400 customers at $20 is $8,000 a month. At $25, you break even on revenue with 320 customers (80 lost, 20%). With an 80% gross margin, serving a customer costs $4, so profit per customer goes from $16 to $21. Profit break-even is 400 times 16 divided by 21, about 305 customers: you can lose about 95 (23.8%) before profit falls. A lower margin gives more room on profit; at a 100% margin the two figures are the same.

What the number does and does not tell you

• It is a threshold, not a forecast. The calculator cannot say how many customers will actually leave. It tells you what loss rate you would have to beat. Compare it with what you can observe: churn after past changes, how many customers contacted support about price, and how many are on plans a competitor undercuts.
• Existing and new customers react differently. A rise applied only to new sign-ups can lower conversion rather than cause cancellations. In that case use the break-even as a limit on how far conversion may fall.
• Churn takes months to show. Annual customers will not leave until renewal, so watch cohorts over the full billing cycle before declaring the change a success.
• Fixed costs, discounts and plan mix are ignored. If customers move to a cheaper tier instead of leaving, the real average price is lower than the new list price. Enter the expected average price in the new-price box.

Check the market before you move

The other half of a pricing decision is where competitors sit. A rise that keeps you below comparable plans carries less risk than one that puts you above a free plan with the features your customers use. Read each competitor's live pricing page and record the price, the billing period, the limits and the date, using the 9-step checklist for reading a pricing page. The free comparison template puts plans on the same monthly and yearly basis, and the annual discount calculator checks what a "save 17%" badge really means.

Would rather not do the research yourself? The Price Teardown service reads your competitors' live pricing pages and delivers a sourced, dated report in 24 hours for $49.