What is Grandfathering?
Definition
The practice of allowing existing subscribers to keep their current pricing or plan terms when a service changes its pricing structure.
Understanding Grandfathering
Grandfathering is a retention strategy where existing customers are exempt from price increases or plan changes. When Netflix raises prices, for example, they may grandfather existing subscribers at the old rate for a period. This builds loyalty and reduces churn during transitions.
However, grandfathering is usually temporary — most services eventually migrate all users to new pricing. Savvy consumers leverage grandfathering by subscribing to services before announced price increases. Some services offer permanent grandfathering as a loyalty reward.
Related Terms
Price Increase
When a subscription service raises its pricing, affecting existing and/or new subscribers.
Retention Rate
The percentage of subscribers who continue their subscription over a given period, calculated as the inverse of churn rate.
Subscription
A recurring payment arrangement where a customer pays at regular intervals to access a product or service.