Strategy
Pricing built on what buyers will pay, not what you are comfortable charging.
Most companies underprice their product by 20 to 40 percent. They set the price based on what they think the market will accept, not on research about what buyers are actually willing to pay. They design packages based on features, not based on buyer value perception. The result is revenue left on the table with every customer who signs, and a pricing model that creates friction in the sales process instead of reducing it.
The pricing problems that cap your revenue ceiling.
Pricing mistakes are expensive because they affect every customer you acquire. The errors are consistent and fixable.
Price is set by cost-plus, not by value.
The product costs ₹500 to deliver per month, so the price is ₹1,200 because a 2.4× markup feels reasonable. The buyer is extracting ₹8,000 of value per month from the product but paying ₹1,200 because the seller never asked what the value was worth. Cost-plus pricing is the most common pricing methodology and the one that leaves the most money on the table.
There are too many packages and the buyer is confused.
The pricing page has five tiers: Starter, Basic, Professional, Business, and Enterprise. Each one has 30 features listed in a comparison table. The buyer spends 8 minutes on the pricing page and leaves without converting. The job of a pricing page is to make the decision easy, not to display exhaustive feature comparison tables. More options do not help buyers choose; they cause inaction.
The value metric is set to user seats when buyers do not think in seats.
Per-seat pricing is the default for SaaS. But if the buyer's value from the product scales with the volume of transactions, the number of customers they serve, or the amount of revenue they manage, then per-seat pricing disconnects the price from the value. The buyer grows their business and does not pay more. The revenue ceiling is the number of seats, not the business impact.
Discounting is destroying the pricing model.
The published price is ₹15,000 per month. The actual average revenue per account is ₹9,200 because the sales team is discounting 30–40% to close deals. The pricing model has become a negotiation starting point, not an actual price. Discounting trains buyers to expect discounts, signals that the published price is fiction, and makes the revenue model unpredictable.
Annual pricing is not incentivised strongly enough.
Monthly and annual plans are priced with a 10% discount for annual. The business needs predictable cash flow and prefers annual commits. But at 10% discount, most buyers choose monthly because the switching cost of cancelling monthly is low and the savings on annual are not compelling. The discount required to shift buyers to annual is category-specific and requires research, not a 10% default.
How we build pricing strategy.
Willingness-to-pay research first. Value metric selection second. Package design third. Revenue impact modelling fourth.
Find out what buyers actually value before setting any price
- Van Westendorp price sensitivity analysis, the four-question framework to find the acceptable price range
- Conjoint analysis design, feature and price combination testing to identify the highest-value package
- Customer interviews, qualitative research on how buyers perceive value and what they compare you against
- Competitor pricing audit, full landscape of published pricing and estimated discounted pricing
- Value calculator construction, a quantified model of the economic value each customer segment extracts
- Segment willingness-to-pay, price sensitivity mapped by customer segment, use case, and company size
Select the right model and value metric for your product
- Value metric selection, the unit of pricing that best correlates with the value the buyer receives
- Pricing model recommendation, per-seat, usage-based, outcome-based, or hybrid model selection
- Annual vs. monthly incentive calibration, the discount level required to shift the majority to annual
- Free tier and trial design, whether a freemium or free trial model fits the product and conversion economics
- Enterprise pricing architecture, custom pricing approach and packaging for enterprise deals
- Price point selection, specific price recommendations by tier based on willingness-to-pay research
Design the tier structure to guide buyers to the right package
- Good-better-best architecture, three-tier structure designed around three distinct buyer segments
- Feature allocation, which features go in which tier based on perceived value, not development cost
- Anchoring strategy, how the highest tier is positioned to make the middle tier feel like the obvious choice
- Add-on architecture, which features to keep as optional add-ons rather than including in a tier
- Pricing page design brief, the visual and copy brief for the pricing page redesign
- Discount policy, written policy for when, how much, and who can approve a discount
Model the revenue impact before making the change
- Current ARPU baseline, the current average revenue per account by segment and tier
- Migration model, how existing customers move to the new pricing and what the revenue impact is
- Win rate impact model, projected change in win rate at each price point from research data
- Expansion revenue model, projected increase in expansion revenue from value metric pricing
- Transition plan, how to communicate the pricing change to existing customers and retain them
What pricing strategy includes.
Research
- Van Westendorp analysis
- Conjoint analysis
- Customer pricing interviews
- Competitor pricing audit
- Value calculator
- Segment willingness-to-pay map
Model Design
- Value metric selection
- Pricing model recommendation
- Annual/monthly incentive calibration
- Free tier design
- Enterprise pricing architecture
- Price point recommendations
Packaging
- Good-better-best architecture
- Feature allocation by tier
- Anchoring strategy
- Add-on design
- Pricing page brief
- Discount policy document
Revenue Modelling
- Current ARPU baseline
- Customer migration model
- Win rate impact projection
- Expansion revenue forecast
- Transition communication plan
- Post-launch monitoring plan
This is right for you if:
- SaaS founders who have never formally tested willingness to pay and suspect they are leaving revenue on the table
- Companies with high discount rates where the sales team is effectively setting price in every deal
- Businesses preparing for a price increase and needing a research-backed case for how to do it without losing customers
- Companies with complex packaging that is confusing buyers and slowing the sales process
- Businesses expanding upmarket where their current pricing model does not work for enterprise buyers
Not the right fit if:
- Commodity businesses where price is fully determined by market competition, there is no pricing strategy for a product with perfect substitutes at zero switching cost
- Companies that are not willing to potentially raise prices, pricing research sometimes confirms current pricing is appropriate; if the goal is always to lower prices, this engagement is not the right one
Frequently asked questions.
How do we raise prices without losing existing customers?
With a combination of research, segmentation, and communication sequencing. Research confirms the price increase is within the acceptable range for your buyer segments. Segmentation identifies which customers are most price sensitive and which have the highest switching cost. Communication gives existing customers advance notice, explains the value they are receiving, and offers grandfather pricing on annual plans as a retention mechanism. The right approach varies by customer concentration and contract structure.
Is usage-based pricing right for SaaS?
Usage-based pricing is right when the value the customer receives scales with usage, when the cost to serve also scales with usage, and when the buyer understands and trusts the usage metric. It is wrong when buyers need cost predictability to get budget approval, when usage measurement is complex, or when the product's value is not obviously proportional to a measurable unit. We evaluate all of these criteria as part of the pricing model selection process.
How long does it take to see the revenue impact of a pricing change?
For new customers: immediately, from the first month the new pricing is live. For existing customers on monthly billing: within 30 to 60 days if the migration is handled well. For annual contract customers: at renewal. The full revenue impact of a pricing change typically becomes visible within 6 to 12 months, which is why we build a phased revenue impact model before making the change.
Ready to find out how much revenue you are leaving on the table?
Book a 30-minute call. We will review your current pricing model and identify the three most significant revenue optimisation opportunities.
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