.png)
Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Based on the guidance in our saas pricing book, Price to Scale, the best approach when pricing based on the revenue your customers generate is to tie your pricing directly to the value they receive from your platform. Here are some key points from our book:
• Value-Based Alignment:
If your customers’ revenue is enhanced by using your platform, you can justify a pricing model that scales with that success. This directly aligns the cost of using your platform with the value delivered, making it easier for clients to see the return on investment.
• Usage or Revenue-Based Pricing:
A revenue-based model (or usage-based model, when usage translates directly into revenue) ensures that as your customer’s revenue grows, the pricing adapts accordingly. This model can smooth the adoption curve, as customers pay proportionally to the benefits they receive.
• Modular Adjustments:
Our book also discusses frameworks like modular pricing where the product is segmented into distinct components or tiers. If one segment of your product drives revenue growth for your customers, you might consider pricing that particular capability on a revenue-sharing basis or a performance-linked fee structure.
In summary, if your product’s success is demonstrably linked to the revenue uplift for your customers, adopting a revenue-based or usage-based pricing model can be an effective strategy. This approach ensures that your pricing is directly tied to the value created, fostering trust and facilitating easier scaling for both you and your customers.
Remember that while these models align well with scenarios where customer revenue is a clear outcome of using your platform, it’s important to also validate the correlation and continually test your pricing strategy to ensure it meets both your growth objectives and your customers’ expectations.