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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Introduction
In today's competitive HR technology landscape, having the right pricing and packaging strategy can be the difference between stagnation and explosive growth. For HR SaaS companies, pricing isn't just about determining a dollar figure—it's about communicating value, understanding market positioning, and creating alignment between customer needs and your solution's capabilities. According to OpenView Partners' 2022 SaaS Pricing Survey, companies that conduct regular pricing reviews see 14% higher growth rates than those that don't. Yet, many HR tech companies approach pricing as an afterthought rather than the strategic lever it truly is.
This guide will walk you through how to run an effective pricing and packaging strategy project specifically for HR technology SaaS products, helping you maximize revenue while delivering clear value to your customers.
Assessing Your Current State
Gathering Pricing Intelligence
Before making any changes, you need a comprehensive understanding of your current pricing performance. Begin by collecting:
- Customer acquisition costs by segment
- Customer lifetime value metrics
- Price sensitivity across different buyer personas
- Conversion rates at different price points
- Competitive pricing landscape analysis
- Current customer feedback on pricing and packaging
According to ProfitWell research, 98% of SaaS businesses have significant gaps in their pricing strategy that leave revenue on the table. Start by examining these gaps in your current approach.
Understanding Value Perception
Work closely with your sales and customer success teams to gather qualitative insights:
- Which features do customers mention most during sales calls?
- What capabilities do customers cite when renewing?
- Where do prospects experience sticker shock?
- Which competitors do you win against and lose to, and why?
This intelligence forms the foundation for your pricing strategy evolution.
Developing Your Pricing Strategy Framework
Establishing Clear Objectives
Define what success looks like for your pricing project:
- Increasing average contract value (ACV)
- Improving conversion rates
- Reducing discounting
- Accelerating enterprise adoption
- Expanding into new market segments
According to a Salesforce study, HR technology buyers rank "clear, transparent pricing" as a top-5 factor in purchasing decisions. Your objectives should align with both business goals and customer expectations.
Forming Your Cross-Functional Team
Effective pricing strategy requires perspectives from multiple departments:
- Product Management: Understands feature value and development costs
- Sales: Provides frontline feedback on buyer objections
- Marketing: Offers insights on messaging and positioning
- Customer Success: Shares post-purchase value realization data
- Finance: Provides cost structure and profitability insights
This cross-functional approach ensures your pricing reflects both market realities and internal constraints.
Research: The Foundation of Effective Pricing
Market Analysis
Conduct thorough research to understand:
- Competitive landscape: How similar HR tech solutions are priced
- Market benchmarks: Typical pricing ranges for your segment
- Pricing models: Subscription vs. usage-based vs. hybrid approaches
The HR tech space has specific pricing norms—for example, HRIS systems typically price per employee per month, while talent acquisition solutions often use a model based on hiring volume or recruiter seats.
Customer Value Research
Engage customers to understand their perceived value:
- Value Drivers: Identify which features and outcomes customers value most
- Willingness-to-pay: Conduct research to determine price elasticity
- Segmentation Analysis: Understand how value perception differs across company sizes, industries, and use cases
According to PwC research, 77% of enterprise HR buyers expect pricing to reflect measurable business outcomes. Your research should uncover how customers quantify the value of your solution.
Crafting Your Packaging Architecture
Tiering Strategy
Most successful HR SaaS companies offer 3-4 pricing tiers:
- Entry-level tier: For smaller organizations or limited use cases
- Professional tier: For mid-market companies with standard needs
- Enterprise tier: For larger organizations with complex requirements
- Optional custom tier: For unique needs and larger deployments
Research from Price Intelligently suggests that the optimal number of pricing tiers for SaaS products is three, as it creates natural "good, better, best" decision architecture for buyers.
Feature Distribution
When deciding which features belong in each tier:
- Must-have features: Include in all plans
- Value-enhancers: Place in mid-tier plans
- Differentiators: Reserve for premium plans
- Enterprise needs: Include security, compliance, and scale features in top tiers
Remember that feature distribution should follow a clear value narrative, not just technical complexity.
Add-on Strategy
Identify capabilities that work best as add-ons rather than tier features:
- Specialized modules that apply to specific segments
- Premium support options
- Professional services
- Integration packages
- Extended data retention
According to Gartner, HR tech buyers increasingly prefer modular approaches that allow them to "pay for what they need," making a thoughtful add-on strategy essential.
Setting Price Points
Quantitative Methods
Use data-driven approaches to determine optimal pricing:
- Van Westendorp Price Sensitivity Analysis: Identifies acceptable price ranges
- Gabor-Granger Method: Tests willingness to pay at specific price points
- Conjoint Analysis: Evaluates how customers trade off features and price
These methodologies help ground pricing decisions in customer research rather than internal assumptions.
Accounting for Customer Segments
Different segments will have different willingness-to-pay thresholds:
- Enterprise companies typically evaluate ROI over absolute cost
- SMB customers tend to be more price-sensitive
- Industry-specific concerns may affect price sensitivity
According to Bain & Company research, effective segmentation in B2B SaaS pricing can increase revenue by 25% or more.
Get Started with Pricing Strategy Consulting
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.
Get Started with Pricing Strategy Consulting
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.