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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 our saas pricing book, Price to Scale, there isn’t a one-size-fits-all answer. Instead, your pricing approach should reflect your overall business strategy, target segments, and growth objectives. Here are some key points from our book:
• For products aimed at broad adoption and virality (like many bottom‑up SaaS models), pricing aggressively at the lower end of what customers are willing to pay can help maximize market share. This approach is often effective when the business benefits from wide-scale adoption, as seen with companies like Slack.
• In contrast, if your product caters to enterprise customers or a market with limited size, a margin‐maximizing (or premium) strategy might be more appropriate. By pricing higher, you can establish premium positioning, which not only reflects the advanced features or specialized support provided but also helps maintain healthy margins.
• Ultimately, the decision is unique to your company’s context. Our book emphasizes balancing both the number of customers willing to purchase and the price they’re willing to pay, guiding you to tailor the approach based on your specific market dynamics and strategic goals.
In summary, the choice between pricing aggressively low and pricing high depends on your market, customer segments, and growth strategy. Our book advises aligning your pricing strategy with your broader business goals to ensure a sustainable and competitive position in your category.