How to Conduct a SaaS Pricing Audit: A Consultant's Step-by-Step Approach

May 20, 2025

Introduction

Pricing is the most powerful, yet most underutilized lever for SaaS growth. According to research by Price Intelligently, a mere 1% improvement in pricing can yield an 11-15% increase in profits. Yet, surprisingly, the average SaaS company spends only 6 hours on their pricing strategy over their entire company lifetime. If you're an executive at a SaaS company, this statistic should be alarming – you're potentially leaving millions on the table through suboptimal pricing.

A comprehensive pricing audit can reveal these hidden opportunities and identify critical gaps in your monetization strategy. This article walks through a consultant's systematic approach to conducting a SaaS pricing audit that delivers actionable insights and measurable revenue impact.

Why SaaS Pricing Audits Matter

Before diving into the methodology, let's establish why regular pricing audits are crucial:

  • Market Evolution: SaaS markets evolve rapidly, with new competitors and feature sets constantly emerging.
  • Value Perception Shifts: How customers perceive your value proposition changes over time.
  • Customer Segmentation Changes: Your ideal customer profile may have evolved since your last pricing exercise.
  • Feature Development: Your product likely has new capabilities deserving monetization.

According to OpenView Partners' 2023 SaaS Benchmarks report, companies that revisit pricing at least annually grow 30% faster than those that don't. With that context, let's explore the step-by-step audit process.

Step 1: Establish Clear Objectives and Metrics

Begin by defining what success looks like for your pricing strategy:

Key Metrics to Track:

  • Annual Contract Value (ACV): Are you targeting higher ACV or pursuing volume?
  • Revenue Growth Rate: What growth targets must pricing support?
  • Customer Acquisition Cost (CAC) Payback: How quickly must customers become profitable?
  • Net Revenue Retention (NRR): What expansion targets are you aiming for?
  • Conversion Rates: How does pricing affect your funnel?

Document your current performance against these metrics before making any changes to establish a baseline for measuring improvement.

Step 2: Conduct a Competitive Analysis

Understanding your position in the market is essential to effective pricing.

Competitive Analysis Framework:

  1. Map Direct Competitors: Identify 5-7 direct competitors with similar offerings.
  2. Record Pricing Structure: Note their tiers, price points, and packaging strategies.
  3. Feature Matrix: Create a detailed feature comparison across pricing tiers.
  4. Positioning Analysis: Analyze their messaging—are they positioning as premium, value, or specialized?

According to Harvard Business Review, 72% of SaaS buying decisions involve competitive comparisons, making this analysis critical.

Step 3: Evaluate Your Value Metrics

A value metric is how you charge customers (per user, per transaction, etc.).

Value Metric Assessment:

  1. List Potential Value Metrics: Identify all possible ways to charge for your product.
  2. Test Against Criteria: Good value metrics should:
  • Scale with value delivered
  • Align with customer ROI
  • Be predictable for customers
  • Be simple to understand
  1. Quantify the Impact: Model how different value metrics would affect revenue for different customer segments.

Research by ProfitWell indicates that companies using value metrics aligned with customer success achieve 8-10% higher growth rates than those using arbitrary metrics like user seats when that doesn't align with value delivery.

Step 4: Customer Value Research

Understanding what customers truly value is fundamental to effective pricing.

Research Methods:

  1. Customer Interviews: Conduct 15-20 interviews across customer segments.
  2. Feature Value Survey: Use the Van Westendorp Price Sensitivity Meter or Conjoint Analysis.
  3. Win/Loss Analysis: Examine why prospects convert or walk away.

Key questions to answer:

  • What problems does your solution solve?
  • Which features are must-haves vs. nice-to-haves?
  • What would make customers pay more?
  • What alternatives do they consider?

Step 5: Segmentation Analysis

Different customer segments have different willingness to pay and feature requirements.

Segmentation Approach:

  1. Identify Key Variables: Company size, industry, use case, geography.
  2. Analyze Current Customer Data: Look for patterns in usage, support needs, and expansion.
  3. Create Segment Profiles: Document distinct needs and willingness to pay by segment.
  4. Prioritize Segments: Determine which segments to optimize for.

According to data from Tomasz Tunguz at Redpoint Ventures, effective segmentation can increase average revenue per account by 25-35% by aligning offerings with specific customer needs.

Step 6: Package and Tier Optimization

Well-designed tiers help customers self-select into appropriate pricing levels.

Tiering Strategy:

  1. Good-Better-Best Framework: Design three primary tiers to capture different segments.
  2. Feature Allocation: Decide which features belong in which tier based on your value research.
  3. Price Anchoring: Set your middle tier as the intended landing spot for most customers.
  4. Upsell Pathways: Create clear value-based reasons to upgrade.

When analyzing your tiers, ensure:

  • At least 15-20% of customers choose your top tier
  • No more than 30% select your entry-level tier
  • Clear differentiation exists between tiers

Step 7: Pricing Model Selection

Choose between subscription, usage-based, hybrid, or other pricing models.

Model Assessment:

  1. Predictability Analysis: How important is revenue predictability for your business?
  2. Customer Preference: Do customers prefer fixed costs or usage-based flexibility?
  3. Market Standard: What models are customers accustomed to in your space?
  4. Cash Flow Impact: How will the model affect cash flow and financial planning?

Recent trends show a clear shift toward hybrid pricing models. According to OpenView's 2023 report, 45% of SaaS companies now employ some form of usage-based component in their pricing, up from 34% in 2021.

Step 8: Price Point Optimization

With structure determined, optimize actual price points.

Price Setting Process:

  1. Willingness to Pay Analysis: Use customer research to set upper bounds.
  2. Cost Analysis: Establish floor prices that maintain healthy margins.
  3. Scenario Modeling: Model the revenue impact of different price points.
  4. Cohort Impact Analysis: Evaluate how changes affect different customer segments.

Be aware that most SaaS companies underprice their products. Research by Simon-Kucher & Partners reveals that 77% of SaaS companies leave money on the table with suboptimal pricing.

Step 9: Discount Strategy Review

Discounting practices can significantly impact realized price.

Discount Analysis:

  1. Current Discount Patterns: Analyze historic discount rates by customer segment, deal size, and sales rep.
  2. Discount Authority Matrix: Develop guidelines for who can approve what level of discount.
  3. Annual vs. Monthly Pricing: Set appropriate differential (typically 15-20%).
  4. Special Case Handling: Define policies for enterprise deals, non-profits, etc.

Effective discount governance can increase net realized price by 3-5% according to pricing consultancy firm Ibbaka.

Step 10: Implementation Planning

A pricing change requires careful execution.

Implementation Roadmap:

  1. Existing Customer Strategy: Will changes apply to existing customers? If so, how and when?
  2. Communication Plan: Develop messaging that emphasizes value, not price.
  3. Sales Enablement: Prepare materials to help your team articulate the new pricing.
  4. Technical Requirements: Map system changes needed to support new pricing.
  5. Timeline: Create a phased rollout plan with clear milestones.

According to research by Patrick Campbell at ProfitWell, the most successful pricing changes involve at least 4-6 weeks of preparation before launch.

Step 11: Measurement and Iteration

A pricing audit is not a one-time event but an ongoing process.

Measurement Framework:

  1. Key Metrics Dashboard: Track impact on conversion, ACV, retention, and growth.
  2. Customer Feedback Loop: Establish mechanisms to collect feedback.
  3. Competitive Monitoring: Continue tracking market changes.
  4. Iteration Schedule: Plan for quarterly reviews and annual deep dives.

The most successful SaaS companies iterate on pricing 3-4 times per year with smaller adjustments and conduct comprehensive reviews annually.

Conclusion

An effective SaaS pricing audit is a strategic exercise that combines quantitative analysis, customer research, and competitive intelligence. When executed correctly, it not only impro

Get Started with Pricing-as-a-Service

Join companies like Zoom, DocuSign, and Twilio using our systematic pricing approach to increase revenue by 12-40% year-over-year.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.