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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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Based on Price to Scale, there are a few strategies you can consider:
- Good-Better-Best Packaging
- Create graded plans that align with different customer segments.
- Tailor feature sets so each tier’s capabilities focus on solving the critical use cases for a given segment. This helps ensure smaller customers receive just what they need, while larger companies access additional value without feeling neglected.
- Modular Pricing Approach
- Attribute specific value to individual features or modules so that customers can pick and choose what best fits their scale and needs.
- This method allows you to serve both small and large organizations by providing base functionality at a competitive entry price, while scaling up value through add-ons or premium features for larger customers.
- Balancing List Prices and Discount Strategies
- Increasing list prices for smaller deals can help maintain a positive discounting range. This is important because, as the book shows, smaller deals typically involve less discounting (up to 20%) compared to enterprise deals (up to 80%).
- The difference in unit pricing (e.g., smaller customers might pay a higher per-unit price than larger ones) is acceptable and expected, reinforcing a ‘volume discount’ model.
- Segmenting Your Customer Base
- Segment your existing customers and intentionally vary the pricing approach—this could mean offering alternate bundled packages or upgrade options.
- Be upfront on pricing and clearly communicate options, ensuring customers understand the benefits they receive at each price point.
In summary, our SaaS pricing book "Price to Scale" recommends structuring your pricing so that each customer segment pays in line with the value they receive. By designing distinct tiers or modular options and carefully calibrating discount strategies, you can effectively cater to both small and large companies—delivering value without alienating any segment.