> But what if your wrong, how do you properly handle increasing your price on existing customers?

I think "properly" is to go about it in a way that is fair to everyone. If you have a customer base who sees value in the service you are providing and the raise is within reason they should stick around. If it is a very disruptive price increase you can always grandfather customers in or give them a X-month run way.

>Also, how do you know if it would be better to increase the price and maybe get more per customer, or decrease and maybe get more customers? How do you test that?

Why not just A/B test your pricing structure? Unless your customers communicate in the same channels you have little risk in charging Customer A one price and Customer B a different price.

They go to your website, see price A, then they switch IP address and computer (e.g. they visit your website again with their phone) and see price B.

It is a sunny day and a among his other wares a street vendor is selling umbrellas for $11.99. After you pass his stand it begins to rain, and you return to the vendor. The umbrellas are now priced at $15.99.

I want to say patio11 addressed this, but I may be misattributing. In any case the advice I recall is to, if anyone notices or complains, offer them a direct link to the lower price, possibly accompanies by a 10$ off coupon. An apology about the mix-up is optional, as is bringing up the fact that you are the founder, and you're happy to chat with customers any time on how to improve the service.

You should probably also charge all customers the lower of the two test price points at the final checkout step (as mentioned by whyleyc in this thread). That should avoid most complaints.

For services the best thing to do is to start at what seems to be high (but not so outrageous that people label you a kook) and scale back as needed. Nobody will complain if next month's bill is smaller than this month's.

For actual shipped products things are much more difficult, if you price high and people buy but not enough people buy and you then lower the price "too soon", the early adopters will feel understandably pissed. See: Nintendo 3DS.

See also the price drop for the iPhone back in 2007 (33% drop 10 weeks after release [1]). Resulted in an open letter and apology from the CEO [2].

[1] http://pogue.blogs.nytimes.com/2007/09/06/the-iphone-price-d...

[2] http://www.apple.com/hotnews/openiphoneletter/