Founder Playbook · Sub Club by RevenueCat
9 tactics from Patrick Rills
The Hidden Cost of Underpricing Your Subscription
Watch the full episode“We've had the same price since we launched the premium product in 2012. The biggest push for this has been the cost of acquisition has gone up — especially since costs are going up on all channels because of increased competition.”
Holding price constant for 14 years leaves money on the table as CAC rises
Lose It! kept its $39.99/year price from 2012 to 2026 while customer acquisition costs climbed steadily across every channel. What felt like pricing discipline was actually a slow revenue leak — the same dollars bought fewer and fewer new users over time. If CAC doubles and price stays flat, paid UA economics collapse without anyone noticing until it is too late.
“When we tested it for the first time it broke even. That was quite a surprise for us because that had never happened before. And so we tested it again on iOS and on Android on different cohorts of users — new users, existing users, reactivated users. We kept getting similar results.”
When a price test breaks even, that is the signal to raise prices
Years of testing showed that raising the price always lost money on net — until late 2024, when doubling the price simply broke even. Patrick treated that break-even as green-light data: if there is no revenue downside and the higher price unlocks paid acquisition and covers AI marginal costs, raising it is essentially free upside. A break-even test is not a reason to pause — it is a reason to move.
“The higher price point allows us to offer more discounts to more users and try to get more area under the curve there because from 0 to 40 there's not as much room to do 50, 25%, 75% discounts. But at $80 we can do more steep discounting.”
A higher base price gives your lifecycle sale engine much more room to operate
Lose It! built a sophisticated lifecycle discounting system over years — but at $40/year it had almost no room to run meaningful percent-off offers. Moving to $80 doubled the discount headroom without changing the absolute floor price. Steep discounts convert better even when the final price is higher in absolute dollars, so a higher list price benefits both conversion and perceived value simultaneously.
“All of our main competitors are around the $80 price point. We believe our product is just as good as theirs. However our price didn't really reflect that. What are prices if not information about how something is valuable?”
Prices signal quality — a low price relative to competitors devalues your product
The product team at Lose It! pushed for the price increase, not just the revenue team. Their reasoning: price is the only signal a prospective user has about relative quality. When Lose It! charged half the price of competitors, it implicitly communicated an inferior product regardless of actual feature parity. Pricing parity with competitors is a brand statement, not just a monetisation choice.
“In the app space it's not like a shelf at a grocery store where people are looking at the Campbell soup and then the store brand soup and doing the math. People are coming in from ads and they don't necessarily have that frame of reference.”
App users rarely comparison-shop on price — especially via paid acquisition funnels
The grocery-shelf mental model leads many founders to underprice defensively, assuming users are comparing options side by side. In paid acquisition channels users arrive at a single paywall with no visible competitor pricing — the relevant comparison is their own perception of value. This makes aggressive defensive discounting far less necessary than founders assume.
“The way that you have to increase the price on existing subscriptions in the app store — the UX is confusing and cumbersome. To us it was impossible to AB test. It was a huge risk. Is it 75% attrition? Is it 25%? It was just too big of an unknown.”
Grandfathering loyal subscribers protects a retention floor you cannot A/B test
Raising prices on new subscribers is a measurable experiment. Raising them on existing subscribers is a one-way door with no clean control group. Lose It! grandfathered all existing subscribers because the attrition risk was completely unknown — and because their culture treats the original subscription bargain as a promise. Grandfathering also becomes a retention asset: users on a lower locked-in price have an incentive to stay.
“If this is really going to unlock paid acquisition and some other things such as the marginal cost of AI features for us, then why not do it? It gives our marketing team so much more room to operate.”
Higher margins from pricing unlock the AI feature budget you could not previously afford
AI features carry real per-request costs that a flat $40/year subscription struggled to absorb at scale. The price increase to $80 did not just improve marketing economics — it funded the product roadmap. When every active user consumes more backend compute, unit economics either improve via pricing or erode via feature cuts. Pricing is now as much a product decision as a revenue one.
“So far the results have been exactly our experiment results, which hardly ever happens. Usually when you release something out in the wild it's a little bit different. That is a credit to our growth marketing team and our product team — they really tested this rigorously.”
Real-world rollout matching experiment results is the reward for rigorous testing
Most product experiments look messier in production than in a controlled test environment. The fact that Lose It!'s price doubling held up at full rollout is evidence of testing discipline: multiple platforms, multiple user cohorts, and enough duration to trust the signal before committing. Rigorous experimentation before a major price change is what lets you move decisively rather than nervously.
“Our free product is amazing since the beginning. We actually operated from 2008 to 2012 without a paid product. Our free product has always been very useful to people. We invest a lot in it.”
A genuinely strong free product stabilises retention even as the paid price rises
When Lose It! raised its subscription price, concerns about retention were muted because the free tier remained fully functional for the core weight-loss task. Users who do not convert to premium are not frustrated — they can still accomplish their goal. That free-product quality acts as a retention safety net, keeping the base engaged and making premium feel like an upgrade rather than a barrier.