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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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A/B testing pricing changes requires a strategic, data-driven approach to minimize risk while maximizing insights. Here are the key best practices for effectively testing pricing changes:
Pre-Testing Preparation
Conduct thorough market research first - Use Van Westendorp Surveys, Conjoint Analysis, and Max Diff methodologies to establish baseline price sensitivity and feature prioritization before conducting live tests.
Segment your customer base appropriately - Different customer segments may respond differently to pricing changes. Ensure your test groups reflect your key customer segments.
Define clear success metrics - Determine specific KPIs to evaluate test results, such as:
- Average deal size
- Conversion rates
- Upsell rates
- Customer acquisition costs
- Revenue impact
Test Design and Execution
Test one variable at a time - Isolate the specific pricing element you're testing (e.g., base price, tier structure, add-ons) to ensure clear cause-and-effect relationships.
Create a detailed implementation plan - Develop a roadmap covering:
- Internal training for sales and support teams
- Customer communication strategy
- System updates and technical implementations
- Timing and rollout sequencing
- Use both quantitative and qualitative research methods:
- Empirical data analysis of tier/package performance
- Price bearing metrics across segments and geos
- In-person qualitative studies with clients and prospects
- Implement appropriate guardrails - As demonstrated in our Twilio case study, establish platform fee guardrails to prevent significant revenue drawdowns when testing usage-based models.
Analysis and Implementation
- Analyze performance across key dimensions:
- Average Deal Size impact
- Sales team adoption rates
- Customer objections and friction points
- Competitive positioning
- Plan for full-scale rollout - Once testing validates your approach, ensure organizational alignment through:
- Sales enablement materials and training
- Pricing calculators and tools
- Updated CPQ systems and compensation plans
- Monitor post-implementation metrics - Continue tracking KPIs after full implementation to ensure sustained positive impact.
Our pricing methodology has consistently delivered results across multiple case studies, including a 15-30% increase in average deal size for an eCommerce SaaS company and successful implementation of usage-based pricing for a $3.95B digital communication leader without revenue reduction.