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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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In today's competitive SaaS landscape, an optimized pricing and packaging strategy can be the difference between sustainable growth and stagnation. For email marketing software providers, the stakes are particularly high as the market becomes increasingly saturated. A well-executed pricing strategy doesn't just impact revenue—it communicates your value proposition, positions you against competitors, and influences customer perception.
Why Pricing Strategy Matters for Email Marketing SaaS
Email marketing platforms operate in a mature market with established players like Mailchimp, Constant Contact, and newer entrants disrupting the space. According to OpenView Partners' 2023 SaaS Benchmarks report, companies that conduct regular pricing reviews see 10-15% higher annual revenue growth compared to those that don't.
Your pricing structure isn't just a revenue lever—it's a strategic asset that:
- Communicates your product's value positioning
- Determines which customer segments you'll attract
- Establishes expectations for customer support and service levels
- Influences your sales and marketing approach
Phase 1: Preparation and Discovery
Assemble Your Cross-Functional Team
A successful pricing project requires input from multiple departments. Ideally, include representatives from:
- Product management
- Marketing
- Sales
- Customer success
- Finance
- Data/analytics
Each team brings unique insights: product knows feature value, sales understands customer objections, and finance can model revenue impacts.
Gather Your Intelligence Assets
Before making any decisions, collect comprehensive data on:
Current pricing performance: Analyze conversion rates at each tier, upgrade/downgrade patterns, and churn rates by price point.
Competitive landscape: Document pricing models, tiers, and feature allocation across direct competitors and adjacent solutions.
Customer segmentation: Understand which types of customers you currently serve and their willingness to pay.
Feature usage data: Identify which features drive engagement, retention, and perceived value.
Cost structure: Calculate your customer acquisition costs (CAC), service costs, and hosting costs to establish pricing floors.
Phase 2: Research and Analysis
Conduct Customer Research
Understanding willingness to pay is critical. Consider these research approaches:
In-depth interviews: Talk to 15-20 customers across different segments about how they value specific features and their price sensitivity.
Van Westendorp Price Sensitivity Meter: Survey customers to identify optimal price points by asking about acceptable price ranges.
Feature value ranking: Have customers allocate 100 points across features to understand relative value perceptions.
According to ProfitWell research, companies that conduct customer research before pricing changes see 30% higher revenue growth than those who rely solely on instinct.
Analyze the Competition
For email marketing software, examine:
- Pricing models: Per-contact pricing vs. email volume pricing vs. feature-based tiers
- Packaging boundaries: Where competitors draw lines between free, basic, and premium tiers
- Add-on strategies: Which features are packaged and which are premium add-ons
Create a feature matrix to visualize how competitors allocate features across tiers. This will help identify potential gaps or opportunities for differentiation.
Identify Value Metrics
The right value metric aligns pricing with customer value. For email marketing platforms, consider:
- Number of contacts/subscribers
- Email send volume
- Automation workflows
- Number of users/seats
- Advanced features (A/B testing, segmentation depth)
According to a study by Price Intelligently, companies with value metrics aligned to their customers' success metrics enjoy 30% higher growth rates and lower churn than those using arbitrary pricing units.
Phase 3: Strategy Development
Define Your Pricing Model
Based on your research, select the most appropriate model:
- Tiered pricing: Fixed price for bundles of features (most common)
- Usage-based: Charges scale with actual usage
- Hybrid model: Combines tiers with usage components
- Freemium: Free basic tier with paid upgrades
For email marketing SaaS, a tiered model with contact count limits often works well, potentially with usage limits for email sends within each tier.
Develop Your Packaging Architecture
Structure your tiers around customer segments and their needs:
- Entry-level: For solopreneurs and small businesses with basic needs
- Growth: For scaling SMBs needing automation and better analytics
- Professional/Enterprise: For larger organizations requiring advanced features
According to OpenView's Product Benchmarks, the optimal number of pricing tiers for most SaaS products is 3-4, with clear differentiation between each.
Feature Allocation Strategy
Thoughtfully decide which features belong in each tier:
- Must-have features: Include in all plans (email editor, basic templates)
- Growth features: Place in mid-tier plans (automation, segmentation)
- Advanced features: Reserve for top tiers (advanced analytics, dedicated IP)
A 2023 study by Paddle found that SaaS companies that strategically place high-value features in premium tiers see 25% higher average revenue per user (ARPU).
Phase 4: Testing and Validation
Financial Modeling
Before implementation, model various scenarios:
- Impact on new customer acquisition
- Effect on existing customer base if grandfathering isn't planned
- Revenue projections under different conversion assumptions
- Customer lifetime value changes
Create sensitivity analyses to understand risks and opportunities.
Testing Approaches
Depending on your risk tolerance and technical capabilities, consider:
- A/B testing: Present different pricing to segments of new visitors
- Cohort analysis: Implement new pricing for new customers only
- Customer interviews: Present mock pricing pages to gauge reactions
- Sales team testing: Allow sales to test new pricing with select prospects
Phase 5: Implementation and Communication
Implementation Timeline
A typical timeline includes:
- Planning phase: 2-4 weeks
- Research phase: 4-6 weeks
- Strategy development: 2-3 weeks
- Testing and validation: 3-4 weeks
- Implementation preparation: 2 weeks
- Launch and communication: 1-2 weeks
Communication Strategy
Your pricing change communication should address:
- Existing customers: Decide if you'll grandfather current pricing or migrate customers to new plans
- Sales team: Provide training, objection handling, and migration guidelines
- Marketing: Update website, create comparison materials, adjust positioning
According to research by Simon-Kucher & Partners, how you communicate price changes can impact customer retention by up to 20%. Frame changes in terms of added value, not just price increases.
Post-Launch Monitoring
Track key metrics after implementation:
- Conversion rates by tier
- Average revenue per user
- Upgrade/downgrade rates
- Churn impact
- Customer feedback sentiment
Be prepared to make adjustments based on early data.
Best Practices for Email Marketing SaaS Pricing
Value-Based Differentiation
Email marketing platforms often differentiate on:
- Deliverability capabilities
- Design flexibility and template quality
- Automation sophistication
- Integration ecosystem
- Analytics depth
- Support level
Ensure pricing tiers reflect these value differentiators clearly.
Consider the Competitive Landscape
The email marketing space includes:
- Full-service platforms (Mailchimp, Constant Contact)
- Marketing automation suites (HubSpot, Marketo)
- Specialized email tools (Substack, ConvertKit)
Position your pricing relative to the competitors you most directly challenge.
Avoid Common Pitfalls
- Underpricing premium features: Advanced automation and AI capabilities often have higher perceived value than companies realize.
- Overcomplicated structures: Complex pricing creates friction in the buying process.
- Ignoring expansion revenue: Design your pricing to grow as customers grow their subscriber lists.
Conclusion
A strategic pricing and packaging project for email marketing software requires methodical research, cross-functional collaboration, and customer-centric thinking. When executed well, it can significantly improve your unit economics, customer satisfaction, and competitive positioning.
Remember that pricing is never "done"—the most successful SaaS companies review and refine pricing at least annually. As the email marketing landscape evolves with AI capabilities, enhanced personalization, and changing privacy regulations, your pricing strategy must evolve too.
By following this structured approach and maintaining ongoing attention to pricing performance, your email marketing SaaS can optimize revenue while delivering clear value to customers at every price point.