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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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Our approach to price sensitivity analysis for SaaS products involves a multi-faceted methodology that combines empirical research, statistical measurement, and qualitative validation techniques rather than relying solely on expensive standard methods that often don't work well in Enterprise B2B settings.
Key Components of Our Price Sensitivity Analysis
1. Price Point Measurement using Van Westendorp
We employ Van Westendorp surveys to establish a range of acceptable price points for your SaaS product or service. This method uses a set of four strategic questions to determine price sensitivity thresholds among your target customers.
2. Empirical Pricing Research
Our methodology includes three critical areas of analysis:
Tier/Package Performance Analysis: We analyze your existing pricing tiers across metrics like average deal size, upsell rates, discounting patterns, and shelfware to optimize the fit between your pricing structure and go-to-market motion.
Price Bearing Analysis: We evaluate your $/metric performance across various dimensions (sales teams, geographical regions, customer segments, product lines) to understand your pricing power and ability to sustain desired price points.
Usage Analysis: We examine how customers actually use your product to ensure your pricing metrics align with value delivery and usage patterns.
3. Qualitative Validation
We complement quantitative methods with in-person qualitative studies to validate pricing and packaging decisions across a sampling of existing clients and prospects—providing real-world feedback on proposed pricing models.
Advanced Options
For more complex pricing scenarios, we can implement:
Conjoint Analysis: While standard conjoint can be expensive ($150k+) and difficult to apply in Enterprise B2B settings, our approach provides a simulator that rigorously informs success and market share potential across different tier options and price points.
Feature Prioritization: Using Max Diff methodology to identify which features drive the most value perception and should be prioritized in different pricing tiers.
Case Study Example
For a $10M ARR IT Infrastructure Management Software company that was selling lump sum subscriptions without specific packages or pricing metrics, our price sensitivity analysis:
- Aligned their pricing strategy with their enterprise go-to-market approach
- Rationalized their offerings from four packages to two, with remapped feature-sets
- Created a combination pricing metric based on users and company revenue
The result was their first consistent pricing model, reducing sales friction and enabling better monetization of strategic features.
Our methodology leverages 28+ years of operational experience in SaaS pricing leadership at companies like Zoom, Twilio, DocuSign, and LinkedIn, ensuring that our price sensitivity analysis delivers actionable insights that can be successfully implemented in real-world scenarios.