
Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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SaaS Packaging
Imagine you run a cloud consulting firm that’s been selling hours and projects the traditional way. Every new client means a fresh proposal, a fight over hourly rates, and once the project wraps up, you’re back to square one, hunting for the next deal. This time-and-materials (T&M) model has been the norm for IT services for decades. But in today’s “as-a-Service” economy, it’s also a growth bottleneck.
In this post, we’ll explore why the old T&M approach falls short, the big opportunity in shifting to a subscription-based service model, and a step-by-step guide (with a hypothetical example) on productizing and packaging your consulting services. We’ll then apply Monetizely’s authoritative 5-step pricing framework: Segmentation, Packaging, Price Metric, Rate Setting, Operationalization, to ensure your new offering is structured for success.
The goal is a direct, outcome-focused roadmap to transform your consulting business from selling hours to selling ongoing value.
T&M consulting handcuffs growth to time. You're essentially "selling hours for dollars." To earn more, you either:
That creates a linear and hard-to-scale model. For many consulting leaders, growth simply means more work, leaving little bandwidth for strategy, marketing, or innovation.
Worse, T&M breeds a feast-or-famine cycle: Once a project ends, so does the revenue. Each month depends on landing the next deal, making predictable revenue nearly impossible.
There’s also a built-in misalignment with clients:
And because services are often custom-built for every engagement, there's:
Crucially, T&M leads to revenue volatility:
In short: you start each quarter at zero. Growth becomes a grind of closing deal after deal, a stressful and unsustainable path over time.
Shifting your consulting business to a subscription model flips common challenges, lumpy revenue, inconsistent client engagement, into long-term strategic advantages.
Instead of chasing one-off projects, you build Annual Recurring Revenue (ARR) that compounds over time. This:
Investors love this. Recurring revenue isn’t just easier to model, it also signals operational discipline and market fit. Just look at Adobe’s transformation below: moving from perpetual licenses to cloud subscriptions helped quintuple its market cap.
Subscription-based businesses grow faster. Over the past decade, they’ve outpaced the S&P 500 by nearly 4x. Why?
By aligning with this trend, you meet clients where they already are, and where they’re headed.
A subscription service model reframes your value:
This deepens client relationships. You commit to continuous results; they commit to an ongoing partnership. That dynamic reduces churn, boosts satisfaction, and strengthens account stickiness. Some firms have seen up to a 25% lift in retention after moving to subscription-based consulting.
Standardizing your service offering unlocks scalability:
Over time, delivering 10 subscriptions of a defined service becomes cheaper and more efficient than executing 10 bespoke projects. And with predictable scope, resource planning becomes far more efficient, no more firefighting when a project overruns.
Bottom Line: Subscription-based consulting is structurally better. It drives growth, boosts valuation, improves retention, and creates the conditions for scale. Most importantly, it transforms your client relationship into a durable asset.
How do you turn a consulting engagement into a scalable, recurring revenue stream? The answer is productization, treating your service like a repeatable product.
A productized service takes what you already do and standardizes it into clear, transparent packages. Instead of reinventing scope and pricing every time, you present clients with a defined menu of subscription-ready offerings. Here's how to make the shift:
Start by spotting a service you’re already delivering repeatedly or a client pain point that’s continuous in nature, ideal for subscription delivery.
Examples:
For instance, after cloud migrations, clients often need ongoing support and tune-ups. That’s your repeatable use case to build a product around.
Next, codify your service into a clearly defined “product.”
Define:
Example package:
Like a restaurant menu item has fixed ingredients, your offering should have a fixed list of deliverables. This keeps quality consistent and streamlines delivery—no more reinventing scope each time.
Create subscription packages that scale with client size and complexity.
Tiering Example:
Each tier should:
By shifting from open-ended hours to pre-defined packages, you simplify sales and set clear expectations.
Ditch hourly pricing. Instead, choose a pricing metric that reflects customer value.
Options include:
For example: Charging “per cloud account managed” ensures clients with more infrastructure (and more value) pay more. It also scales cleanly with customer needs, no renegotiation needed.
Avoid metrics that punish efficiency (like per hour). Instead, pick one that grows with outcomes delivered.
To scale like a product company, invest in the tools and systems that reduce manual effort:
Train your team on consistent processes. The more automation and repeatability you build in, the better your margins and delivery quality.
To contextualize the steps outlined above, let's consider a hypothetical scenario that demonstrates how a consulting firm might transition from project-based engagements to a subscription-based service model.
CloudCo, a cloud consulting firm, observed that clients often required ongoing support after initial cloud migration projects. To address this continuous need, CloudCo developed a tiered subscription offering named Cloud Assurance-as-a-Service:
Price metric: Per cloud account managed
Result: Clients pay based on their footprint. Growth = higher tier or add-ons.
Delivery: CloudCo builds proprietary scripts to collect data, and forms a Customer Success team to run quarterly reviews. They move 10 clients onto subscriptions, creating $XM in ARR.
Benefits observed:
The Takeaway
By productizing:
This is the SaaS playbook applied to consulting, turning services into scalable, high-trust subscriptions.
To ensure the success of a new subscription offering, it's beneficial to follow a structured pricing strategy. Monetizely’s 5-step pricing framework provides a systematic approach to designing and implementing pricing for new offerings. Let's apply these five steps: Segmentation, Packaging, Price Metric, Rate Setting, and Operationalization, to CloudCo’s "Cloud Assurance-as-a-Service" to illustrate how each step contributes to structure and impact:
Start by identifying distinct customer segments, because not all clients have the same needs or value potential. Segmentation means organizing your market into coherent groups that share similar characteristics.
For CloudCo, two primary segments emerged:
Benefits of segmentation:
In our example, CloudCo might even create a “Startup Cloud Assurance” package vs an “Enterprise Cloud Assurance” package, each priced and scoped appropriately for those segments.
Packaging isn’t just about tiers; it’s about how value is delivered. It defines what’s inside each offer and makes your product easy to buy.
For CloudCo, this meant:
A helpful analogy: In product pricing, popcorn sizes just scale quantity. In services, higher tiers must also be “flavored” with better outcomes.
Benefits of effective packaging:
By clearly communicating “what’s in the box,” CloudCo improved both sales velocity and subscription satisfaction.
Your price metric defines how customers pay, and how your revenue scales.
CloudCo chose: Per cloud account managed as the core pricing metric. Why? It’s logical: more accounts = more environments = more value and more work.
Do’s and don’ts:
Benefits:
CloudCo’s approach ensured revenue scaled with client complexity, improving LTV and simplifying renewal growth.
Once the structure is clear, you set actual prices, where positioning meets market expectations.
CloudCo’s pricing might have looked like:
Approach:
Key Principle from our 5-step pricing framework:
Benefits:
CloudCo’s rate setting helped anchor customer expectations and position its services as premium yet justifiable.
No pricing model survives without implementation. Operationalization embeds your new pricing strategy into daily operations.
At CloudCo, this involved:
Key KPIs introduced:
Benefits:
CloudCo’s dedicated “Cloud Assurance” team ensured execution matched strategy, from pitch to delivery.
Walking through these five steps imposes structure on a chaotic transformation:
For CloudCo, this wasn’t just a pricing update, it was the launch of a repeatable, scalable subscription business model.
Transitioning from time-and-materials to a subscription model is no longer a radical idea, it’s becoming a competitive necessity for IT services and consulting firms. The traditional T&M model may feel familiar, but it caps your growth, exposes you to revenue volatility, and weakens client stickiness.
By contrast, packaging your expertise into a subscription unlocks:
Yes, the shift takes work. You need to define clear service tiers, align pricing with customer value, and retool operations across sales, delivery, and finance. But the upside is substantial. Firms embracing this model are seeing higher retention and deeper investor interest because they’re delivering continuous value, not just one-off outcomes.
The Monetizely 5-step framework helps you navigate this transformation with structure and confidence. The result is a consulting business that behaves like a modern product company, repeatable, efficient, and primed for growth, while still powered by your team’s expertise and client relationships.
This shift isn’t academic. It’s about delivering ongoing results for your clients, whether that’s stable cloud operations, security compliance, or expert guidance, and capturing ongoing results for your business: steady revenue, scalable margins, and a stronger market position.
Don’t wait. The future is “as-a-service.” Start packaging your services today, and start compounding value tomorrow.
It’s time to stop selling projects. Start selling partnerships.
Join companies like Zoom, DocuSign, and Twilio using our systematic pricing approach to increase revenue by 12-40% year-over-year.