Legacy pricing in SaaS businesses refers to retaining old pricing plans for existing customers of a company. New pricing plans will be applicable only to new customers. Legacy pricing allows a company's existing customers to continue paying the same price for a product/service although the company's new customers have to follow new pricing. This pricing model is followed by many SaaS subscription-based companies.
The concept of legacy pricing is important in SaaS businesses since it allows companies to focus on customer retention by developing better relationships, especially with old-time customers. With this clause, businesses can also maintain the trust and loyalty of long-term customers. It can also have strategic advantages that help businesses move customers onto plans with higher prices. It acts as a reward for long-term customers through temporary rate reduction. However, companies must be careful to keep a limited grace period for legacy prices and this should be clearly communicated to customers.
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