Monetizely FAQ – Your Guide to SaaS Pricing & Strategy

Based on the insights provided in our saas pricing book, Price to Scale, the answer is nuanced:

• Maintaining your global premium pricing can be advantageous if you can effectively communicate the superior value of your product. This strategy helps preserve your brand’s premium positioning and supports a consistent value narrative across markets. As emphasized in Price to Scale, a strong, unique value proposition often justifies a higher price—even in markets with local competitors charging less.

• That said, consider the local context carefully. If the market is highly price-sensitive and competitors’ low prices are deeply rooted in local economic conditions, there might be cases where a degree of localization is necessary. However, any adjustments should be made cautiously. The book outlines that lowering prices to compete on cost can dilute your brand’s premium positioning if not managed with a corresponding enhancement in perceived value.

• Ultimately, our guidance is to focus on selling your product’s premium value while strategically evaluating local market conditions. If you decide to align partially with local price levels, ensure you have a robust strategy to support that change—such as tailored marketing messages that bridge local expectations with your global premium offering.

In summary, Price to Scale recommends that you generally maintain global pricing and work to articulate your product’s superior benefits. Only consider local adaptations if a deep market analysis shows that minor adjustments will enhance overall market penetration without undermining your premium brand.

Frequently Asked Questions

In markets where our competitors charge much less due to local conditions, should we align closer to those local price levels or maintain our global pricing and focus on selling our product’s premium value?

If a significant portion of our users are in lower-income regions, should we create a special pricing tier or plan for those countries to make the product accessible, or would that reduce revenue too much?

What’s a good way to test a localized pricing strategy in a new country without upsetting existing customers elsewhere (for example, quietly offering a promo price in a region to see how it performs)?

If currency exchange rates between our billing currency and a customer’s currency fluctuate a lot, should we update our prices in that currency periodically or absorb those changes to keep pricing stable?

In places like the EU, customers are used to seeing VAT included in the price. Should we display tax-inclusive pricing for certain regions to meet expectations, and how do we handle taxes in the pricing for different locales?

Would using a purchasing power parity approach (setting prices relative to each country’s cost of living or income levels) be practical for our SaaS, or is that overcomplicating it for a smaller company?

If our product and marketing are only in English, can we justify one price globally for an English-speaking audience, or will even those users expect different pricing if they are in a lower-cost country?

Is it better to launch with one global price and only introduce regional pricing later once we have significant international traction, or should we do it from the start to avoid future re-pricing for existing users in those regions?

If we partner with resellers or distributors in other countries, should we let them set local prices (since they know the market) or require a consistent price to avoid disparities?

Would it make sense to offer a stripped-down version of our product in price-sensitive regions at a lower price (to improve affordability), or would maintaining separate regional editions/features be too complex?

Our main competitor charges $X for a similar product – should we price below them to attract price-sensitive customers, match them to avoid price being a differentiator, or price above them and argue we’re a premium option?

How can we find out what customers are willing to pay relative to competitors, especially if our competitors’ pricing isn’t public or is very complex with custom quotes?

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)?

Competitors divide their features and tiers differently than we do – should we mirror how the market leader packages their product (since customers may expect that), or is there an advantage to segmenting our tiers in a unique way?

If a new competitor enters the market undercutting everyone’s prices significantly, should we adjust our pricing to stay competitive, or hold our price and compete on value/quality instead of getting into a price war?

How do we best justify our pricing to potential customers who say “Company X is cheaper”? Are there strategies in pricing or packaging that can help reinforce our value despite a higher price?

Is being the cheapest option in our category a good strategy for us to gain market share, or will pricing too low make customers perceive our product as lower quality or less capable?

What should we do if a major competitor suddenly lowers their prices or runs a big promotion? Should we respond by lowering ours as well or maintain our pricing and emphasize other differences?

Do we need to monitor competitors’ pricing regularly and have a plan for adjustments if they change something (like introducing a new low-end tier), or should we focus on our own value and not react to every move?

In a crowded space where most products have similar pricing schemes, would adopting a radically different pricing model (say usage-based when all others are per-seat, or vice versa) give us a competitive edge or just confuse potential customers?

Should we perform a formal competitive pricing analysis and, if so, how do we use that data? Do we aim to position ourselves as a lower-cost alternative, a premium choice, or just in the middle of the pack?

How important is pricing transparency in competing with others? Some competitors hide their prices for higher tiers or enterprise plans – would being more transparent with our pricing give us a trust advantage or just invite more negotiation?

If a competitor charges separately for certain add-ons or services (like premium support or training) and we include those for free (or vice versa), how should we account for that in our pricing to ensure customers make a fair comparison?

Can we use our competitor’s pricing as an anchor point in our sales or marketing (for instance, showing that for a similar price as theirs, we offer more features or higher limits)? How do we do this without directly bashing or violating any norms?

We believe our product delivers significantly more value than Competitor X. Can we charge a higher price than them to reflect that, or will customers be unwilling to pay more than the market standard regardless of added value?

What is the best pricing metric for our SaaS that aligns with the value we provide – should we charge per user, per active user, per project, per amount of data, or some other unit?

How should we decide whether to charge per seat (per named user) or per usage (transactions, data processed, etc.), or even based on results? What factors indicate which metric makes the most sense for our product?

For company-wide deployments, is it better to charge by number of users or offer a flat fee for the entire company? What do customers typically prefer in those scenarios?

Our platform has multiple variables we could potentially charge on (users, data storage, API calls, etc.). How do we pick one primary metric (or a simple combination) that best reflects value without over-complicating things?

What if different customers get value from different aspects of our product – is it ever feasible to offer different pricing metrics for different customer profiles, or would that just become chaotic?

Has anyone switched their pricing metric (say, from per-user to usage-based or vice versa) after launching? How did their customers react, and was the change ultimately positive for the business?

For higher-tier plans, should we allow unlimited usage (focusing pricing on features and service level) or impose usage caps for fairness and revenue protection? How do we ensure an “unlimited” plan still aligns with providing value?

How can we figure out which value metric customers care about most and would find fairest? Would surveying customers about how they’d prefer to be billed yield useful insights, or do preferences vary too much?

Is true value-based pricing (charging each customer based on the ROI or outcome they get) actually achievable? How would we measure and verify each customer’s results to charge them accordingly?

If our product directly increases a customer’s revenue or saves them money, could we price it as a percentage of that benefit (outcome-based pricing)? Will customers accept that, or do they prefer fixed pricing even if ROI is high?

If we attempted some kind of performance-based pricing (where the customer only pays upon achieving certain results), how could we implement that without jeopardizing our own revenue predictability?

How do we avoid situations where our chosen pricing metric makes some customers feel they’re overpaying relative to the value they get? (For example, if light users pay the same as heavy users under a flat fee, or vice versa.)

Would it ever make sense to use one pricing metric for one segment of customers and a different metric for another (for instance, small businesses vs. enterprises), or would that be too confusing and hard to manage?

What metrics do other successful SaaS companies in our industry use for pricing (e.g., per seat, per host, per data volume), and is there an industry norm we should stick to or an opportunity to differentiate by using a new metric?

If our product has multiple modules or components, should we price each module separately (modular pricing) so customers pay for only what they use, or provide one combined price for the whole suite?

If some customers use our product extensively and others only use it lightly, should we let the heavy users pay more (via usage-based charges or higher tiers) and lighter users pay less, instead of charging everyone the same amount?

We’re considering an unconventional pricing metric that isn’t commonly used in our sector. Will using a non-standard metric confuse potential customers, or could it help us communicate our value in a way that sets us apart from competitors?

Is it ever viable to combine multiple pricing metrics in one model (for example, a base subscription fee plus a usage-based component, or charging per user plus a smaller fee per transaction), or will that level of complexity deter potential customers?

When is the right time to raise prices for our SaaS? What signs should we look for (e.g., consistently high demand, feature improvements, competitor pricing) to know we can successfully charge more?

We haven’t changed our prices since launch – how often do SaaS companies typically re-evaluate or change their pricing and packaging?

What’s the best way to announce a price increase to existing customers to minimize backlash? (e.g., how much advance notice, how to communicate the added value, etc.)

Should we grandfather existing customers on their old pricing when we roll out a price increase or new pricing structure, or move everyone (even old accounts) onto the new pricing?

If we do grandfather customers on legacy plans, should that be indefinitely or for a limited time? And how do we eventually encourage those on old plans to switch to the new pricing?

We suspect we’re underpriced now that our product has grown – how can we test willingness to pay or a higher price point before officially raising prices for everyone?

Is it better to implement small, incremental price increases more frequently or to do a larger price jump after a longer period, in terms of customer acceptance and business impact?

If we discontinue an old plan or pricing tier, how should we handle customers currently on it? Do we force-migrate them to a new tier, or continue to support the legacy plan for those users?

If we decide to change our pricing model entirely (say, from per-user to usage-based, or introducing a new tier structure), how do we transition existing customers without causing confusion or anger?

What kind of customer pushback might we expect when changing pricing or packaging, and what are some strategies to manage it (for example, offering grandfathering, special upgrade deals, etc.)?

Have other SaaS companies regretted certain pricing changes or had them go wrong (like a big customer backlash), and what lessons can we learn to avoid similar mistakes when we change our pricing?

Should our earliest adopters or beta customers always retain the special low price they started with (as a reward for their support), or is it fair to eventually ask them to pay more in line with newer customers?

We’re thinking about introducing a new, higher-priced tier with additional features – how do we decide which existing customers to offer an upgrade to that tier, versus leaving them on their current plan?

What are some effective ways to A/B test new pricing or packaging (for example, running different pricing pages to see conversion differences) and is it advisable to experiment with pricing in that way?

After we implement a pricing change, what metrics should we monitor to gauge its success or failure? (For instance, sign-up rate, upgrade rate, churn rate, customer LTV, etc.)

Some early customers were promised a certain price “for life” or a very low rate – if we need to change that now, how do we approach renegotiating or informing those customers without breaking trust?

Have any SaaS companies ever had to lower their prices (rather than raise them) due to market conditions or strategy shifts? In what situations would lowering price make sense as a strategy?

If we notice some customers are paying too much relative to their usage (or too little for heavy usage) under our current pricing, should we adjust or introduce new tiers to better balance price-to-usage? How do we do that fairly?

Would it be wise to get feedback from key customers on potential pricing changes (or even involve them in a beta test of new pricing) before we roll it out broadly, or could that backfire by alarming customers prematurely?

When is the right time to introduce an enterprise pricing option or ‘Contact Us’ tier? Should we wait until we have big-company demand or offer it from the start just in case?

Should our enterprise pricing be published on the website (e.g., listing an Enterprise plan with starting prices or ranges) or kept flexible via custom quotes only after discussion with the client?

How should we price a very large client that wants to onboard thousands of users? If standard per-user pricing makes the total cost extremely high, should we provide volume discounts or offer a flat-rate site license for such cases?

What kind of discounts or custom contract terms do enterprise customers typically expect (for large user counts, multi-year commitments, etc.)? How can we accommodate those without undermining our overall pricing model for others?

Should certain features (like SSO, advanced security compliance, dedicated account manager) be available only in an enterprise plan? How do we decide which features justify a separate enterprise tier instead of including them in cheaper plans?

At what point should a customer be moved from self-serve plans to a negotiated enterprise deal? (e.g., if they exceed a certain number of users or dollars per year, should we require an enterprise contract instead of letting them just buy online?)

How do we set pricing for on-premise deployments or private cloud versions if an enterprise client requests it, as opposed to our standard cloud offering? Do we charge a big setup fee, higher subscription, or a different licensing model altogether?

What’s the best way to structure multi-year deals with enterprises? Should we lock in pricing for the duration, include an annual price escalation clause, or give a larger upfront discount for a longer commitment?

If an enterprise customer asks for a feature or integration that’s not on our roadmap (essentially custom development), do we charge them separately for it, incorporate it into a higher subscription cost, or agree only if it fits our broader product plans?

How can we make our pricing page or sales materials appeal to both SMB and enterprise customers? For example, do we explicitly say “Contact us for enterprise pricing” to signal larger offerings while not scaring off smaller customers with big numbers?

Do enterprise clients tend to prefer an all-inclusive per-user price (covering all features and support) or a big flat annual fee for unlimited use? How can we determine which approach the client would prefer?

When dealing with procurement departments, what kind of flexibility or concessions should we be prepared for? (For instance, do we need to be ready to offer net-30/60 payment terms, or break out costs for compliance reasons, etc.?)

Should we set a minimum annual fee for enterprise customers, regardless of usage or seat count, to ensure a baseline revenue (for instance, even if they have few users they pay at least $X per year for enterprise-level service)?

How do we handle RFPs from large organizations that demand detailed pricing breakdowns or guaranteed caps on cost increases over time? Can we adapt our pricing to meet those requirements without giving away too much?

If a huge client comes along that could dramatically increase our revenue, how do we approach pricing them? Do we stick to our guns on list price, or accept a lower price per unit because of the volume and logo prestige (and how low is too low)?

Do enterprise clients ever want outcome-based pricing (pay for results)? Should we ever entertain a risk-sharing model like that, or is it best to stick to our standard licensing even for big deals?

What do enterprise clients expect in terms of how they pay? Do we need to accommodate invoicing and purchase orders, and could things like offering net payment terms affect how we price (since it impacts cash flow)?