I almost switched vendors today.
After many, many years with our current solution, I was ready to make the jump. New vendor lined up. Budget approved. $80,000 a year contract ready to sign.
Then I saw it: $7,500 migration fee.
And just like that, the deal died.
It’s Not About Affordability. It’s About Friction.
Here’s the thing — I can afford $7,500. I can pay it for something valuable if I need to. That’s not the issue.
The issue is that this vendor was already slightly more expensive than our current solution. So in my head, I was already justifying the incremental cost based on better features, improved support, whatever the differentiators were.
Then you add another $7,500 on top?
Suddenly, the math gets ugly. The ROI timeline extends. The “this is a no-brainer” decision becomes “I need to think about this.”
That’s friction. And friction kills deals. It really, really does.
The Real Cost of Migration Fees
This vendor just pushed an $80,000 ARR deal from Q4 2025 into 2026. Maybe it happens. Maybe it doesn’t. But what definitely happened is:
- They lost 1-2 quarters of revenue
- They gave me time to second-guess the decision
- They gave my current vendor time to retain me
- They added a psychological barrier to switching
All for $7,500.
Think about that ROI. They’re protecting a one-time $7,500 fee at the risk of losing $80,000 in ARR. Over three years, that’s $240,000+ in contract value.
The math doesn’t math.
When Migration Fees Make Sense (Spoiler: Rarely)
Look, I get it. Migrations are real work. Data transfer, integration setup, customer hand-holding — it costs you money.
But here’s what most B2B vendors miss:
Migration fees optimize for the wrong metric.
You’re optimizing to recover costs on a single transaction. You should be optimizing for customer lifetime value and minimizing barriers to acquisition.
The only time migration fees make sense:
- Truly complex, enterprise-scale migrations requiring substantial professional services
- When you’re positioning as a premium solution and the fee is a tiny fraction of the total contract (think $10K fee on a $500K deal)
- When your product is SO differentiated that customers will pay anything to get it
For everyone else? You’re just giving your competitors a gift.
What Winners Do Instead
The best SaaS companies I’ve seen handle this differently:
Option 1: Eat the migration cost. Build it into your unit economics. If you can’t afford to onboard a customer properly, you have bigger problems than migration fees.
Option 2: Include it in Year 1 pricing. Slightly higher first-year fee, then standard pricing going forward. Same economic outcome for you, but psychologically easier for the buyer.
Option 3: Make it optional. Offer white-glove migration as an add-on, but provide self-service tools for free. Let customers choose their own adventure.
Option 4: Waive it strategically. Build the fee into your pricing but waive it during negotiations. Makes you look flexible and customer-centric.
The Lesson for B2B Founders
Every fee you charge is a decision point. Every decision point is a chance for the customer to walk away.
You’re not just asking for $7,500. You’re asking the customer to:
- Justify additional budget
- Defend the total cost internally
- Question whether the switch is really worth it
- Consider staying with the incumbent
I was a qualified, motivated, budget-approved buyer. I was trying to give this vendor $80,000 a year.
And a $7,500 migration fee stopped me cold.
So ask yourself: Is that fee really worth it? Would you want to pay it yourself?
Because I can tell you from experience — the answer is usually no.
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