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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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Jason Lemkin’s “Chief Price Raising Officer” Argument in Context
In a recent SaaStr post, Jason Lemkin provocatively claimed that when a SaaS company’s growth stalls, its Chief Revenue Officer (CRO) often devolves into a “Chief Price Raising Officer.” He points to an 11.4% average SaaS price increase in 2025 (far outpacing ~2.7% inflation), with high-profile examples like Slack (+20%), Adobe (+17%), and Salesforce (which layered a 9% hike in 2023 with another 6% in 2025)[1]. According to Lemkin, Salesforce now attributes up to 72% of its forward ARR growth to price increases rather than new sales or expansion[2].
In his view, once annual growth slows to ~15–20%, CROs pivot from chasing new logos to “extracting more revenue from the existing customer base”[3]. The tactics he lists are familiar (and indeed brutal): forcing multi-year renewals with automatic 8–10% uplifts, eliminating monthly plans or adding punitive fees for them, “resegmenting” tiers to push customers into higher-priced plans, bundling in new AI features as an excuse to raise prices, tacking on new platform or API fees, or using opaque credit systems that quietly double usage costs[4].
Lemkin even shares a firsthand horror story: as a long-time reference customer for a vendor, his team was blindsided by a new CRO announcing “we’re doubling prices” with zero notice[5]. The CRO cited inflation and rising costs, but couldn’t articulate added value – nor did he even realize Lemkin’s company was a flagship reference. The immediate fallout? Lemkin’s company delayed renewal, opened talks with a competitor that same day, and swore off being a reference ever again[6]. In short, the CRO’s short-term play to “put points on the board” destroyed goodwill.
Lemkin’s larger point is that these maneuvers are alarmingly common in slow-growth SaaS: “Every renewal call is an attempt to raise prices…customers notice…They pay because migrating is painful, but they’re not happy. They’re not expanding. The moment a credible alternative emerges – especially one 30–40% cheaper with AI-native efficiency – they’re gone.”[7].
He warns that squeezing your installed base for ARR today plants the seeds for stagnation (or decline) tomorrow: “I’ve seen companies go from $80M at 25% growth to $85M at 5% growth three years later. They made every quarter in between through price increases. And they destroyed the business.”[8].
The prescription? Good CROs at slow-growth firms focus on genuine product-led expansion and net revenue retention (NRR) driven by love, not leverage[9].
In other words, customers should expand because they’re receiving more value – not because you’ve left them no choice.
Lemkin’s post is a wake-up call about the perils of blunt-force pricing tactics.
But is it fair to broadly paint CROs of slower-growth companies with this brush?
Let’s examine why this framing, while containing truths, is also an oversimplification – and how savvy SaaS companies are really approaching monetization in today’s climate.
Why Blanket “Price Hike” Narratives Miss the Mark
Labeling all slow-growth SaaS firms as simply jacking up prices to hit quarterly targets is an overly broad (and polarizing) generalization. Yes, the examples Lemkin cites are real – many enterprise vendors have pushed aggressive increases and convoluted fees on customers in recent years.
However, most responsible SaaS leaders recognize that indiscriminate price gouging is a short road to long-term ruin. As one industry veteran bluntly put it: raising prices on new customers is one thing (they can vote with their wallet), but forcing unilateral price hikes on existing customers is another matter entirely[10].
The backlash can be severe: trust evaporates, referrals and case studies dry up, expansion goes to zero, and logo churn looms the minute a viable alternative appears[11]. No competent founder or board wants this outcome.
So what’s actually happening at many 20–30% growth SaaS companies? Far from simply “jacking up the price,” they’re undertaking intelligent monetization redesigns to fix legacy pricing models that no longer serve the business or the customer. It’s crucial to understand that a lot of today’s slow-growth companies enjoyed their high-growth heydays in an era of easy new customer acquisition, cheap capital, and less customer scrutiny on ROI.
They often scaled up with simplified, volume-driven pricing and packaging geared to land new logos quickly. That might have meant one-size-fits-all packages, lots of bundled features for a flat fee, underpriced usage limits, or overly generous tiers – anything to reduce friction in the land phase. Over time, those legacy models left significant value on the table and created unintended side effects: for instance, customers on a low-priced plan using the product heavily (but not paying for that usage), or large enterprises paying relatively little per seat because the pricing was designed years ago for scrappy SMB adoption.
In other cases, early pricing plans inadvertently created “shelfware” – customers locked into a higher tier with lots of features they never use, breeding dissatisfaction. And importantly, many hyper-growth era pricing schemes lacked built-in expansion levers – once a customer was in at a fixed price, there was little room to grow the account except by sales negotiating an upsell to the next plan (if one even existed).
As OpenView Partners has noted, companies that neglect to update their monetization model regularly often find themselves with stalled growth and significant unrealized revenue[12]. In fact, in OpenView’s 2024 SaaS Benchmarks, companies that do regularly review and optimize pricing see 30% higher growth rates than those that don’t, yet nearly 40% of SaaS companies hadn’t revisited their pricing in 18+ months[12]. The message is clear: sticking with an outdated pricing model is itself a recipe for slow growth.
In this light, many “price increases” rolling out today are not wanton greed or panic – they are course corrections to decades-old pricing architectures that were optimized for a very different environment. Think of a mature SaaS company that, during its early rocketship years, priced its product at $49/user/month with unlimited usage of certain features. Five years later, large customers are running huge workloads or deriving massive value, but still paying that flat per-seat rate – effectively enjoying a steep volume discount that was never intended.
The company’s new CRO isn’t simply saying “let’s charge everyone more because we’re not hitting 50% growth”; rather, she’s likely saying “our packaging and metrics aren’t aligned to how customers derive value anymore – we need to repackage and reprice so that heavy users (who get more value) pay more, and light users (who get less) pay appropriately.”
This often involves resegmenting packages – yes, Lemkin’s bogeyman – but done with a different spirit. Instead of a cynical “gotcha, you now have to buy Enterprise edition because we moved one feature,” smart resegmentation is about creating offerings that better fit distinct customer segments and use cases, and introducing pricing metrics that scale with usage or value.
For example, consider a SaaS analytics platform that originally sold only per-user licenses. As usage grew, they found some customers were ingesting terabytes of data (creating high load on the service) while others used very little – yet billing didn’t reflect that. It’s very common now for such a company to add a usage-based metric (e.g. data volume, API calls, etc.) alongside seat licenses or replace seat pricing altogether.
Software’s Deflationary Nature Demands a Monetization Rethink
Another flaw in the “chief price raiser” narrative is that it assumes vendors hold all the cards. In reality, today’s software market dynamics put customers in a stronger position to push back than ever – and the best companies know it. We’re living in an era of software deflation and AI commoditization.
Unlike most goods and services which rise in price over time, software tends to drop in price or deliver more for the same cost. In fact, software is one of the most deflationary product categories in the economy: by one analysis, if software cost $100 in 2015, by 2023 its effective value cost is about $60[16]. This is a result of intense competition, low marginal costs, and continuous improvements.
Now add AI to the mix – as Monetizely co-founder Ajit Ghuman points out, AI has set off a “deflationary bomb” in software[17]. The cost of AI capabilities is plummeting (GPT-4’s per-unit compute cost fell ~99.7% in just a few years[18]), and barriers to building new software have never been lower. Startups can leverage open-source models and no-code tools to replicate features in weeks that used to take large teams months. We now have “10,000 MarTech tools and 10,000 SalesTech tools” and a weekend in a garage might be enough to spin up a basic SaaS product[19].
The upshot: software is rapidly getting commoditized. As Ghuman notes, “we cannot keep charging for software like we do” in a world where alternatives abound and switching costs (especially for simpler tools) are falling[20].
This deflationary environment puts a natural lid on how far companies can push price increases. Customers know that somewhere out there is likely a cheaper, “good enough” solution – or they soon will be. Gartner’s data shows CIOs are already budgeting ~9% of IT spend just to cover price increases on existing software[21], meaning enterprises expect vendors to try, but that budget is finite.
If one vendor overshoots and demands a 40% uplift without new value, procurement will walk that spend to a competitor. In Lemkin’s Slack example, the U.S. federal government pushed back on Slack’s aggressive pricing and ultimately secured a 90% discount – a jaw-dropping concession that revealed just how much margin Slack had padded in and how much leverage a customer can have when they call a vendor’s bluff[22].
Moreover, emerging technologies like AI can completely undermine legacy pricing models. A salient example is seat-based (per-user) pricing – the bread and butter of SaaS for two decades. Lemkin himself highlights the “wild card” that AI is coming for seat-based pricing[23].
Why? AI agents and automations are reducing the need for human users in many software products. If your software helps a finance team close the books and you price per seat, what happens when an AI does the work of 5 analysts? Charging per human user makes less sense. OpenView’s research notes the same trend: “software trends all but mandate charging on usage – not users. Automation and AI eliminate the need for whole teams, so seat-based pricing doesn’t scale with value delivered”[24].
This is precisely why usage-based and consumption pricing models are on the rise. According to OpenView, three out of five SaaS companies now have some usage-based element in their pricing, and hybrid models (subscription + usage) are becoming the norm[25][26]. These models let customers start small and pay more only as they get more value, aligning price to actual consumption.
They also encourage broader adoption without punishing the customer for efficiency gains. For instance, Snowflake famously popularized pure consumption pricing in cloud data warehousing, yielding net revenue retention rates upwards of 168% at its peak – best-in-class by any standard[27]. That kind of NRR is only possible when customers willingly expand spending because their usage grows in tandem with value.
The takeaway is that effective monetization today is about rethinking from first principles. In a deflationary, commoditized market, you cannot rely on simply “milking” a captive customer base year after year. Instead, winning companies ask: What do our customers truly value and use? Are we charging for that in a way that feels fair? Where are we under-monetizing heavy usage, and where are we over-charging for unused shelfware?
In some cases, the answer might indeed be to increase prices – but as part of a larger reconfiguration of packaging and metrics, not as an isolated lever. It might mean introducing a new premium edition with advanced capabilities (and yes, AI features) as an upsell – not stealthily bundling AI into the old plan and raising the price for everyone, but offering it as additive value that customers can elect to buy.
Or it could mean usage-tiered plans where the base price stays accessible, but high-utilization is billed via overages or higher tiers. Notably, buyers are not strictly “anti–price increase”; they’re anti-unwarranted price increase.
McKinsey’s recent B2B tech survey found that 8 in 10 enterprise customers are actively looking for new vendors if they don’t feel they’re getting adequate value for the money[28]. In other words, if the value is clear, customers tolerate and even expect to pay more over time (this is how you get NRR > 120%).
But if they sense they’re being squeezed to compensate for your growth shortfall – watch out. As Lemkin puts it, “if every customer could leave tomorrow with zero switching costs, would they? If a lot of them would, you don’t have a growth problem, you have a value problem”[29]. No amount of pricing wizardry can paper over a fundamental value gap.
Pricing Is a System, Not a One-Time Price Point
Perhaps the most important rebuttal to the “just raise the prices” caricature is this: sustainable monetization isn’t about a number, it’s about a system. The best SaaS companies treat pricing not as a discrete event (e.g. a 15% increase this year) but as an integrated, ongoing process that touches product, sales, marketing, and customer success.
Pricing changes work only when all the elements – packaging, pricing metric, rate levels, discount strategy, communication – move in concert[30].
At Monetizely, we treat monetization as a system, not a price point. Pricing changes only work when packaging, metric, pricebooks, discounting guardrails, and enablement move together.[30].
In practice, that means if you’re going to adjust prices, you likely also need to adjust how you package the product, how you define the pricing metric (the unit of value), how you roll it out to customers, and how you equip your sales and success teams to handle the conversations. It’s a holistic project, not just flipping a switch in your billing system.
This holistic mindset is exactly what separates effective monetization initiatives from the ham-fisted price grabs that Lemkin derides. Let’s break down what treating pricing as a system looks like:
- Customer Segmentation and Positioning: It starts with understanding that your customer base is diverse. Different segments (by size, industry, use case, etc.) may perceive value differently and have varied willingness-to-pay. Rather than a one-size-fits-all hike, savvy firms segment their customers and often grandfather or tailor changes accordingly. For example, a price increase (or packaging change) might target enterprise customers who are underpriced relative to value, while leaving small customers untouched or even providing them new lower-cost options. Customer segmentation is the first step in Monetizely’s framework for this reason – it ensures pricing strategy is anchored in customer needs and value, not just internal revenue goals[31]. By identifying which cohorts are, say, cost-sensitive or usage-heavy, you can design moves that right-size revenue without alienating your base.
- Repackaging with Value Communication: The next piece is Positioning & Packaging. Any price change should usually coincide with a refresh of packaging – the bundles of features or usage entitlements each plan includes – to better communicate value. Packaging isn’t just a bundling exercise; it’s a messaging tool for your value proposition[32].
Maybe your legacy packages were feature-heavy but confusing, or they no longer map well to how customers use your product (leading to that shelfware issue). A thoughtful repackage could mean creating a new “Growth” tier between your old Pro and Enterprise, to provide a logical upgrade path. Or it could mean unbundling a monolithic offering into modular add-ons, so that customers can pick what they value most.
The goal is to ensure that when a customer does move to a higher price, they’re also ideally moving to a higher tier of perceived value. Even simply renaming and repositioning tiers can help reset the value framing. Bessemer Venture Partners calls this out in their pricing playbook: “Pricing doesn’t always mean raising costs. It can mean revisiting your model to more closely align what you charge with the value you deliver each account – or fine-tuning your positioning or packaging.”[33].
In fact, effective re-packaging can reduce churn and boost expansion by giving customers more tailored choices[34]. For example, introducing a lower-priced tier for a truly price-sensitive segment can capture those who might otherwise churn, while a higher “premium” tier can capture those willing to pay for more value. The key is, packaging and pricing must evolve together. Simply upping the price of an old plan without any packaging change is a red flag – customers will ask “what am I paying more for now?” and you better have a good answer.
- Aligning the Pricing Metric to Value: Another critical (and often overlooked) part of the system is the pricing metric – what units you charge for. As discussed, many firms are shifting from per-seat to usage-based metrics (or a hybrid) because it aligns revenue with actual value consumed. If your pricing metric is wrong, no amount of percentage increases will fix the underlying mismatch.
A classic mistake is charging per user when your product’s value is actually in usage or data processed or transactions; raising the per-user price won’t extract more revenue from heavy-use accounts that already have all their users onboard – it will just irritate customers. Instead, changing the metric (say, charging per 1,000 transactions, or tiering pricing by data volume) might both increase revenue and be perceived as fairer.
Step 3 in the Monetizely framework is precisely choosing the right pricing metric – it’s that important[35]. Done well, this creates a built-in expansion driver: as the customer’s usage grows, their spend grows proportionally, without any hard negotiation or “gotcha” fees. This is how you get healthy NRR “through love, not leverage”[36] – the customer pays more because they got more value.
OpenView’s data shows companies that effectively tie pricing to value metrics have significantly higher NRR and lower churn (e.g. Gainsight found that aligning pricing with customer outcomes correlates with 40% lower churn rates[37]). It’s a win-win: customers feel the pricing is transparent and justified, and the vendor enjoys organic expansion revenue.
- Data-Driven Rate Setting: Of course, at some point you do need to set the price (the rate). Rate Setting is Step 4 of Monetizely’s process[38] and it’s part art, part science. The rebuttal to Lemkin’s portrayal here is that competent companies do not pull a number out of thin air (certainly not “double it overnight” as in his anecdote[39]). Instead, they conduct market research, analyze willingness-to-pay (WTP) data, and model out scenarios.
For instance, pricing research (via surveys or customer interviews) might reveal that customers would pay, say, 20% more for Specific New Feature X but are maxed out on Feature Y. This informs where you can justifiably charge a premium. Modern pricing teams often leverage price testing or “virtual packaging” exercises to gauge reactions before rolling out changes.
The point is, rate changes are grounded in customer-perceived value and price elasticity – not arbitrarily set to hit a revenue target. In fact, ProfitWell’s studies indicate that companies rigorously measuring WTP achieve 23% higher ARPU without hurting conversion[40].
It pays to do your homework. Sometimes that homework tells you a price increase is warranted; other times it might tell you a price decrease for certain segments is smarter for long-term retention (as was the case in a Price to Scale case study where Pushpay lowered prices for at-risk customers to preempt churn, and saw a 20% reduction in churn as a result[41][42]).
The bottom line: If you decide to raise rates, you need to be confident you’re still within the bounds of customer’s perceived value. Ideally, the changes are coupled with added benefits – higher usage limits, new capabilities, better support – so the customer feels the increase is part of a fair exchange, not an act of extortion.
- Transparent Communication & Phased Rollout: Pricing is emotional. How you communicate and operationalize a change is as important as the change itself. Companies that treat pricing as a system invest heavily in pricing operations and change management (Step 5 of the framework[43]).
This means training the sales and customer success teams on the why behind changes, equipping them with talk tracks, FAQs, and value communication assets – basically, ensuring that a price increase conversation is handled as a consultative discussion, not a diktat. It also means having the right tools (updated pricebooks, quoting systems, billing system alignment) so that new pricing can be quoted cleanly without “random” errors that surprise customers. Crucially, operationalizing pricing change often involves grandfathering rules and migration plans for existing customers[44].
For example, a best practice is to grandfather existing customers on their current pricing for a period of time (or limit the increase to a smaller amount) and only enforce the new pricing for new customers or upon significant upgrades. This gives customers time to adjust and proves that you’re not trying to pull the rug out from under them. If you are restructuring packaging – say you’re discontinuing the old tiers in favor of new ones – you might let existing customers stay on their legacy plan for a year, or offer a discounted upgrade path to the new packages.
The goal is to avoid the kind of shock that Lemkin experienced as a customer. Remember, customers have long memories[45]. They will recall if you handled a change in a way that felt sneaky or disrespectful. By contrast, if you engage them early (“We’re evolving our pricing next quarter to better align with usage – let’s talk about what this means for you and find the right plan”), many will appreciate the transparency.
Some might even opt into higher plans voluntarily if they see clear value. A well-known enterprise software mantra is “no surprises” – never surprise a customer at renewal. Pricing as a system embraces that: changes are planned, messaged, and supported with governance (e.g. approvals, deal desks) to ensure consistency[46].
As Monetizely emphasizes, the pricing model has to ship and stick – which means getting the rollout right with sales enablement, customer comms, and post-launch monitoring[47]. All these operational steps turn a potentially adversarial price hike into a collaborative reconfiguration of the partnership.
It’s worth noting that even Jason Lemkin acknowledges the merits of this holistic, long-term approach. He advises founders to “get involved” and make sure any pricing moves are weighed against the long-term cost in goodwill[48].
He lauds CROs who focus on 110%+ NRR through genuine value expansion, not just contractual escalators[36]. In essence, he’s advocating for precisely the kind of pricing practice we’ve outlined: one where expansion is earned by delivering more value, and pricing is a tool to facilitate that exchange (not a cudgel to make the quarter at all costs).
Treating pricing as an integrated system is how you achieve what Bessemer calls the “untapped growth lever” – they’ve observed that systematic pricing optimization is often the highest ROI lever a CEO can pull, yielding on average a 30+% revenue lift when done right[49][50]. And importantly, that growth comes without alienating customers because it’s rooted in better aligning price to value.
Monetizely’s 5-Step Framework: An End-to-End Monetization Fix
To put theory into practice, let’s introduce Monetizely’s 5-Step Monetization Framework – a systematic approach to pricing and packaging that tackles the very challenges slow-growth companies face, from strategy through execution. (Full disclosure: Monetizely is a pricing strategy firm built by former SaaS pricing operators, and the framework comes from the book “Price to Scale” by Ajit Ghuman & Jan Pasternak.) The five steps are: Segmentation, Positioning & Packaging, Pricing Metric, Rate Setting, and Pricing Operations[35][51]. Here’s how each step helps SaaS companies rethink monetization from first principles and avoid the pitfalls of knee-jerk price increases:
- Segmentation: The process begins with deeply understanding your customer segments. Not all customers deliver (or perceive) equal value from your product, so why should they all be priced the same way? In this step, Monetizely works with companies to divide the customer base (or target market) into meaningful segments based on factors like use case, size, industry vertical, willingness-to-pay, and value drivers[31].
For example, an SMB customer might value simplicity and low upfront cost, whereas an enterprise might value advanced features and premium support. By segmenting, you can set the stage for differentiated packaging and pricing that feels customized and fair to each group. Segmentation also identifies which cohorts might be underpriced or overpaying relative to value. Perhaps you find that fintech companies heavily use a particular module of your software that others don’t – indicating a potential to package and price that module separately for that segment.
Or you find your lowest tier is over-serving a subset of power users – suggesting a new tier or upsell for them. This diagnostic prevents the mistake of a blanket price action and instead guides a targeted strategy. It’s the antidote to one-size-fits-none pricing.
- Positioning & Packaging: With segment insights in hand, the next step is designing offerings (bundles, tiers, add-ons) that resonate with those segments[32]. Positioning & Packaging is where you decide what you sell, to whom, and how it’s messaged.
This can mean creating new tiered plans (e.g. rethinking your Good/Better/Best structure), bundling or unbundling features, and aligning each package with a clear value proposition for its intended segment. For instance, you might create an entry-level package tailored for startups (with core features at an affordable price), a mid-tier for growth companies (with additional collaboration features), and an enterprise tier (with advanced security, integrations, and a higher usage allowance). Each tier’s positioning should clearly communicate the extra value justifying its price.
By doing this, companies fix legacy packaging issues like feature bloating or mis-tiered offerings. A common scenario is collapsing dozens of confusing SKUs or add-ons into a few coherent bundles. In one case, Monetizely helped a client rationalize from 12 different package options down to 5 unified tiers, making it easier for customers to choose and for sales to sell[52]. The result: sales actually used the new model (100% field adoption) and deal sizes grew 15–30% because reps could more easily upsell the right tier[53].
Another example outcome: a company with 14+ add-ons simplified to clear bundles and saw +37% customer growth and -22% churn as customers were less confused and more likely to stick[54]. These outcomes underscore that packaging improvements are not about squeezing the lemon; they’re about making sure customers are in the right package for their needs, with a pricing model that scales as they grow. It sets the foundation for trust – customers don’t feel tricked by fine print, they see transparent choices.
- Pricing Metric Selection: Now we determine how to charge – the unit of value. The Pricing Metric step is where you ask, “What usage or outcome correlate most with customer value in our product?” and structure pricing around that. This could be seats, monthly active users, API calls, data storage volume, transactions processed, etc., or a combination (multi-dimensional pricing). The goal is a metric (or set of metrics) that grows as the customer gets more value. A classic evolution is moving from pure per-user pricing to a hybrid model – say, a base platform fee plus a usage-based component.
This hybrid approach is increasingly popular: indeed, 86% of $100M+ SaaS firms use at least 3 pricing dimensions (like user tiers and usage and modules)[55]. Choosing the right metric often future-proofs your model. For example, if you incorporate an AI feature that saves labor, you might charge per API call or per AI task instead of per seat, since the value isn’t tied to human users. Picking a poor metric can actively hurt NRR – consider a case where a product delivers tons of value by automating tasks (reducing the customer’s headcount need).
If that product charged per seat, the better it works, the fewer seats the client needs – the vendor’s revenue shrinks as value goes up! We’ve seen leading SaaS companies avoid that trap by switching to metrics like data processed or tasks executed, ensuring they capture value commensurate with outcomes delivered. Monetizely’s expertise here is vital because the pricing metric must also be understandable and acceptable to customers.
It needs to align with a perceived unit of value. When done right, it can be transformative. As one Bessemer-backed CRO noted, “we aligned what we charge with the value we deliver…pricing became an accelerator of revenue, not an inhibitor”[56]. A good metric underpins that sentiment.
- Rate Setting: This is the step people often jump to (or only think about) – the dollar (or rupee, euro, etc.) amount you put on your plans or usage units. Rate Setting in Monetizely’s framework involves rigorous analysis: benchmarking competitors, analyzing historical sales discounting (where do reps most frequently give concessions – that hints at prices the market won’t bear), and crucially, testing willingness-to-pay.
Sometimes this means running surveys (MaxDiff, conjoint analysis) or at least doing customer interviews to get qualitative WTP feedback. It also involves looking at your cost structure (especially for usage-based elements – ensuring your pricing covers costs with healthy margin). The objective is to price each component of your offering to capture value while staying competitive. In practice, this might produce a rate card with list prices, volume-based tier discounts, and guardrails for discounting.
One key here is differentiation: you might price core features relatively accessibly but price high-value, differentiated capabilities at a premium. For example, if your SaaS has a standard feature used by all and an advanced AI-driven module used by a few, you price the latter high – those who need it will pay (value-based), those who don’t won’t feel overcharged for not having it. Through Rate Setting, companies often discover they were undervaluing something.
Perhaps customers would pay significantly more for higher limits, better support, or an add-on module, but nobody asked them before. By capturing this, you avoid having to blanket raise prices 40% in desperation – instead you’re rolling out targeted increases or new charges where there is real willingness-to-pay. This is how, for example, a SaaS company could raise prices on average without anger: by introducing a new top tier at a higher price point that a subset gladly takes, while leaving the entry and mid tiers at similar prices for others.
The impact can be substantial – Bessemer notes that engaging in strategic pricing projects often yields ~20–30% revenue uplift[49]. Our own experience has shown optimized rate structures can drive 15–40% higher average selling prices with little increase in discounting, because the pricing now matches what buyers are willing to pay[57]. It’s essentially “free” growth, achieved through science rather than brute force.
- Pricing Operations: The final step ensures all this great strategy doesn’t die on the vine. Pricing Operations is about the people, processes, and tools to implement and govern your new monetization scheme[43]. This includes developing sales enablement materials (pricing playbooks, ROI calculators, FAQs) so the field can articulate the changes convincingly.
It covers updating the billing systems, CRM/CPQ, and maybe creating new pricebooks or SKUs so that quoting the new plans is seamless. It also involves setting discount guardrails – for instance, if you’ve raised list prices, you might enforce tighter discount bands so reps don’t immediately give it all away.
Another key aspect is designing customer-friendly rollout policies: as mentioned, perhaps you grandfather existing contracts, or you introduce new pricing only upon renewal with at least one full quarter’s notice. You might also pilot the changes with new customers first, then phase in for renewals after learning from the pilot.
Monetizely often helps clients craft cohort-based migration plans and even sits in on early customer calls to ensure the pitch is landing[44]. Additionally, pricing ops includes establishing KPIs and feedback loops – e.g. tracking close rates, win/loss reasons, and NRR by cohort after the change. If something’s off (say, suddenly enterprise renewals dip), the company can respond quickly – perhaps by tweaking the packaging or offering transitional discounts.
Essentially, Pricing Operations is the safety net that catches issues and ensures the new strategy actually delivers results. With robust ops, companies have successfully rolled out even big model shifts (like moving from pure subscription to hybrid usage models) without blowing up revenue.
For example, one SaaS firm transitioning to a usage-based model modeled a potential 50% revenue dip if not done carefully; by establishing proper guardrails (commitment discounts, communication), they avoided that dip entirely – in fact, expansions continued smoothly[58].
This step is what prevents the nightmare scenario of a CRO freelancing a doubling of price on a whim. Instead, any increase is methodical, communicated, and supported by the whole organization with the customer’s success in mind.
Through these five steps, Monetizely addresses the end-to-end pricing lifecycle. It’s not about pushing customers to an “expensive plan” and calling it a day – it’s about redesigning how you monetize to ensure it aligns with actual value delivered and how buyers perceive that value. Segmentation ensures we know who we’re pricing for; Packaging makes clear what we’re selling to each and why it’s valuable; Metric and Rate determine how we charge in a way that’s fair and growth-friendly; and Ops makes sure it’s executed smoothly and consistently.
This framework ultimately helps SaaS companies achieve what both Jason Lemkin and customers want: strong net revenue retention based on genuine expansion, not smoke-and-mirrors. When done correctly, pricing becomes a growth engine (through bigger deals, more expansion, and lower churn) rather than a growth Band-Aid. As Monetizely’s team puts it, “we bias toward monetization strategies that drive long-term customer adoption and trust – pricing is not a one-time project, it’s a living system that we help clients build and maintain.”[59][60]
Conclusion: Growth Through Value, Not Force
Jason Lemkin’s fiery critique of CROs who default to price hikes highlights a real risk: if you misuse pricing as a short-term lever, you will erode customer trust and long-term growth. The data is undeniable that simply squeezing more ARR from the same customers, without delivering more value, is unsustainable.
Customers remember being forced into a pricey plan or hit with surprise fees – and that memory will cost you down the road[45][61]. In the worst cases, today’s “price extraction” playbook turns slow growth into no growth or negative growth, as loyalty evaporates[62].
However, it would be a mistake to swing to the opposite extreme and fear any pricing changes whatsoever. The answer is not to leave prices static forever or avoid monetization evolution. Rather, the answer – as we’ve argued – is to approach monetization scientifically and holistically. Pricing should be an ongoing strategic exercise that earns more from customers by delivering and articulating more value to them.
It’s about treating pricing as a system, with careful consideration of segmentation, packaging, metrics, and enablement – not as a single number to ratchet up under duress[30]. When companies undertake this disciplined approach, the results speak for themselves: higher NRR, bigger average deal sizes, and growth that doesn’t rely solely on adding new customers.
A McKinsey analysis showed top-quartile SaaS companies (NRR > 115%) significantly outpace others in valuation and efficient growth, and these leaders often embrace outcome-based and flexible pricing models that scale with customer value[63][64]. In other words, they make money when their customers achieve more – a true partnership.
For startup founders, the key takeaway is to be proactive with monetization strategy, especially as your company matures. Don’t wait for growth to flatline and then reach for the pricing panic button. Instead, continuously iterate: review your pricing at least a couple of times a year (pricing is never “set and forget”[65]), talk to customers about value, watch usage patterns, and refine your model accordingly.
If you do need to implement a price increase, do it the right way – with transparency, accompanying improvements, and respect for the customer relationship. As Lemkin advises, sometimes you as the CEO must step in to ensure the long-term view is taken[48]. No CRO should operate in a vacuum on pricing. When handled strategically, pricing can indeed be one of your biggest growth levers – unlocking 20–30% incremental revenue or more[49] – but if handled poorly, it can stall your engine entirely.
Ultimately, the litmus test of any pricing action should be exactly what Lemkin proposed: if your customer could leave tomorrow, would they still buy from you?[29]. If the answer is yes – because they understand the value and feel they’re getting a fair deal – then your monetization strategy is on solid ground. If the answer is no – they’d feel gouged and flee – then no amount of clever pricing design will save you; you have a product/value problem to fix first.
Pricing is a reflection of how much value you create and how well you communicate it. So focus on that value, use pricing as a system to capture it fairly, and you’ll find you don’t need to resort to maneuvers that antagonize your customers. The best revenue leaders will make their numbers and build enduring companies, not by being “Chief Price Hikers,” but by being Chief Value Officers – ensuring that as their product delivers more, the monetization naturally follows. That’s the sustainable path to aligning growth for both your business and your customers over the long run.
Sources: Jason Lemkin’s SaaStr blog[1][45]; Monetizely Pricing Framework[30][31]; Price to Scale by Ghuman & Pasternak[15][42]; OpenView Partners report[24][66]; Bessemer Venture Partners pricing guide[33][67]; McKinsey B2B Tech analysis[28][63]; SaaS industry benchmarks[12][37].
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