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10 tactics from Reid DeRamus
Raising App Prices the RIGHT Way — Reid DeRamus, Substack
Watch the full episode“Your health metrics are too good — it's like going into the doctor's office and they're like look you need to eat a cheeseburger. I think that's actually one thing I see a lot of writers on Substack that I think are underpriced and they're not realizing their full earnings potential.”
Great Retention Is a Warning — You May Be Leaving Revenue on the Table
Reid DeRamus advises Substack writers (and app operators) that unusually high retention rates are a double-edged signal. Yes, it means subscribers love the product — but it also means many would happily pay more. He urges operators to resist the temptation to 'let it cruise' and instead treat above-peer retention as a trigger to evaluate whether prices have drifted below the market's willingness to pay.
“What we typically see when we've done price increases in the past is that they usually impact subscriber acquisition way more than subscriber retention — if you execute well you won't see much churn from your existing subscriber base but you will see a little pressure on new subscriber acquisition.”
Price Increases Hit New Subscriber Acquisition Far More Than Existing Retention
Across Hulu, Crunchyroll, and HBO Max, Reid DeRamus observed a consistent pattern: well-executed price hikes produce minimal churn among existing subscribers but cause a visible step-function drop in new subscriber adds. The implication for small apps is that the short-term revenue hit of raising prices is mostly a slowdown in growth velocity, not a wave of cancellations — a far more manageable trade-off than most operators fear.
“To really realize the revenue gain from a price increase it's important to figure out a way to increase price for existing subscribers — if you only do it for new subscribers in the future that's a fine approach but just know that you're leaving the vast majority of the impact from a price increase on the table.”
Existing Subscribers Hold Most of the Revenue Upside in a Price Increase
Reid DeRamus frames the price-increase calculus clearly: raising price only for new subscribers captures a fraction of the potential revenue. The real money is in the existing subscriber base — but that requires thoughtful communication, timing, and often grandfathering early supporters at the old price. For early-stage apps with only a handful of founding subscribers, skip the complexity and grandfather them; for established apps, the math on existing-subscriber uplift almost always justifies the effort.
“The timing piece is really important. The best way to do it: you announce it two or three weeks ahead and by the time the price increase actually takes effect they're going to be mid-show on these exciting new shows — that's the best way to do it.”
Time Your Price Increase to Coincide With a Major Feature or Content Launch
Rather than blaming inflation or external costs, the most effective price-increase communication leads with what's improving in the product. Reid DeRamus recommends timing the effective date of the increase to land mid-way through a big new feature rollout or content launch — when subscribers are already engaged and excited. The PR lumps come early, the enthusiasm peak arrives when the price actually kicks in.
“One of the things a Spotify and a Disney Plus can't do because they are such a big brand is actually test the price increase on new users before they actually raise a price on existing users — if you're not a brand name, if people don't know your price offhand, you can go ahead and see first what the impact is on new subscribers.”
Small Apps Can Test Price on New Users Before Rolling It to Existing Subscribers
Big-brand price changes are immediately noticed and covered by press, making quiet testing impossible. Smaller subscription apps have an advantage: they can quietly raise the price for new signups, measure conversion and retention impact, find the elasticity ceiling, and only then roll it out to the existing base. This new-user testing approach converts a scary all-or-nothing decision into an iterative experiment.
“I think tiers make a ton of sense — without them you're forcing one price on everybody when you know that people have different willingness to pay. I think it's good to keep it as simple as possible — more than three tiers the consumer's brain might start to break.”
Keep Tiers to Three or Fewer — Beyond That the Consumer's Brain Breaks
Tiered pricing lets apps capture revenue from both budget-conscious users and power users willing to pay premium prices, without forcing everyone onto one plan. Reid DeRamus draws from streaming experience to set a practical limit: three tiers is the threshold before cognitive overload sets in. Beyond that, the complexity of the paywall starts working against conversion rather than for it.
“When you're pre-product market fit you should really just be focused on trying to really find the sweet spot of what you want to do and the product you want to build and an audience. You should not be really worried about what your cancel flow looks like or overthinking price.”
Pre-PMF: Relentless Product Focus Beats Any Lifecycle or Retention Tactic
Reid DeRamus warns early-stage founders against the seductive trap of optimizing cancel flows, discount offers, and win-back campaigns before finding product-market fit. If users churn in the first month at high rates, the problem is almost never the cancellation UI — it's the product. Investing in lifecycle retention tactics before PMF is a distraction from the only thing that actually matters at that stage.
“Look at the people who are canceling their subscription early on, look at the people who are making it through that period, and look for the behavior that is different about those two groups — try to figure out early on what is indicative of risky behavior, what is signaling valuable behavior, try to bend the product in those directions.”
Compare Early Cancelers vs Survivors to Find the Onboarding Behaviors That Predict Retention
Reid DeRamus describes a simple but powerful cohort analysis: split early cancelers from survivors and find the behavioral divergence in the first session, day, or week. The behaviors that separate the retained cohort become the signals to optimize onboarding toward — whether that's watching a show, completing a workout, or hitting a specific feature. This is the most objective way to find the activation event without guessing.
“We really wanted to exhaust all the possible ways of bringing on new subscribers — only got to a price increase pretty deep into my time there, after six or seven years of really focusing on paid subscribers and scaling that up as much as possible.”
Exhaust Subscriber Growth First, Then Raise Prices — Crunchyroll's Sequencing Lesson
Crunchyroll spent six-plus years maximizing subscriber volume — through marketing, partnerships, content expansion, and adjacent product lines — before finally raising prices. The lesson isn't that you should always wait that long, but that growing the subscriber base to its potential ceiling is a prerequisite for getting the most from a price increase. Raising prices too early trades long-term growth velocity for short-term revenue.
“Don't blame a price increase on inflation or something that consumers can't control — it's usually best to focus on your product and how it's getting better and how you're going to use this extra money to continue to make the product better.”
Don't Blame Inflation — Lead With Product Value When Communicating Price Increases
Pointing to external cost pressures (inflation, content licensing) as justification for a price increase is psychologically ineffective — it reminds subscribers of things they resent and can't control. Reid DeRamus argues the superior framing anchors on the product's improving value and what the extra revenue enables. Subscribers who already love the product will respond far better to a forward-looking product story than to an economic apology.