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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 the information gathered, here's how to approach pricing a SaaS product without direct competitors:
Establish Value-Based Pricing
When your SaaS product has no direct competitors, focus on value-based pricing rather than competitive pricing. Start by understanding the precise value your solution delivers to customers:
Determine the right pricing metrics that align with the value your customers receive. Consider a combination of metrics that reflect usage patterns and business outcomes (as shown in our case study where we guided a company to create a combination metric of users and company revenue).
Conduct customer research using multiple methods:
- In-person qualitative studies with potential customers to validate pricing and packaging
- Van Westendorp surveys to identify acceptable price points
- Feature prioritization to understand what customers value most
- Align pricing with your go-to-market strategy. For instance, if you're targeting enterprise customers, design your pricing model for high Average Selling Price (ASP) solution sales.
Structure Your Pricing Model
Without competitors as reference points, create a coherent pricing structure:
Develop clear packages with carefully mapped feature sets. Our approach typically involves rationalizing multiple package options into a simpler structure that customers can easily understand.
Implement usage-based components with platform fee guardrails when appropriate. This creates flexibility while ensuring predictable base revenue.
Set pricing tiers that accommodate different customer segments and allow for natural growth paths.
Test and Refine
Since you lack competitive benchmarks, incremental refinement becomes essential:
Customer acceptance testing to validate that your pricing model resonates with target customers before full rollout.
Analyze performance data across dimensions like deal size, upsell rates, and discounting to continuously optimize your approach.
Monitor product usage to ensure selected pricing metrics correspond with actual usage patterns and value delivery.
By focusing on the value your unique solution provides rather than competitor pricing, you can establish a pricing model that maximizes revenue while remaining aligned with customer expectations and your overall go-to-market strategy.