Should we align our pricing model with our competitors (for example, if they charge per user, do the same) so prospects find it easy to compare, or take a different approach to stand out (which might also confuse direct comparisons)?

Based on our saas pricing book, Price to Scale, the key isn't necessarily to mimic your competitors but to choose a pricing model that best aligns with the value your product delivers.

Here’s what the book suggests:

• Customers are often accustomed to seeing per-user pricing models. However, simply mirroring competitor tiers (or even discounting on the same basis) can make it too easy for customers to compare your product without recognizing its unique value.

• Instead, consider identifying a value metric that ties directly to how your prospects use and benefit from your solution. For example, while competitors might charge per user, you might evaluate usage-based metrics—like support cases handled, interactions processed, or other outcomes—that better reflect the value delivered.

• Differentiation can be achieved by rethinking your pricing tiers. In our book, we mention that even the names of tiers (e.g., switching from generic labels like “Pro” or “Elite” to something more distinctive such as “Premium” or “Advanced”) can help underscore what makes your offering unique.

• Aligning with competitors might ease the comparison, but it could also limit your revenue potential by failing to capture the upside of actual product usage. A well-chosen pricing model that reflects real consumption and outcomes not only ties pricing more closely to customer value but may also enable revenue growth as customers derive more benefit from your product.

In summary, while understanding customer expectations from competitor pricing is important, our Price to Scale book advises that you base your pricing decision on the product’s perceived and measurable value rather than simply following industry norms. This approach can help you stand out and potentially unlock greater revenue opportunities.