Monetizely FAQ – Your Guide to SaaS Pricing & Strategy

Based on the insights from our pricing strategy book, Price to Scale, it's generally more effective for a niche SaaS product to emphasize your unique value rather than merely undercutting competitors’ prices. Here's why:

• Focus on Differentiation:
Our book highlights that pricing should reflect the balance between the number of customers willing to buy and the price they’re willing to pay. In a niche market, your unique features and specialized use cases often justify a premium price. Undercutting competitors can dilute the perceived value of your solution and lead to downward pricing pressures.

• Tailored Strategy for Niche Markets:
As emphasized in Price to Scale, while mass-market SaaS companies might optimize for market share with lower price points, niche products benefit more from a margin-maximizing approach. This strategy supports sustainable revenue growth and aligns with the specific needs of your target audience.

• Long-Term Impact:
Undercutting competitors might yield short-term wins, but it can also invite increased price sensitivity among customers over time. In contrast, demonstrating and pricing for unique value builds customer loyalty and solidifies your market position.

In summary, for a niche SaaS product, it is advisable to concentrate on your unique value proposition and price your product to reflect that value, rather than simply trying to win on price. This approach not only supports stronger margins but also reinforces your product’s unique benefits in the long run.

Frequently Asked Questions

For a niche SaaS product, is undercutting competitors’ prices a good idea, or should we focus on our unique value and potentially charge more?

How often do SaaS companies revisit or change their pricing model, and should we experiment with our pricing early on or wait until we have more user data?

What are the pros and cons of having a one-size-fits-all pricing plan versus multiple tiered plans in SaaS?

How should we incorporate set-up fees or onboarding fees into our SaaS pricing, and do customers typically push back on those charges?

Is it ever a good idea to publish custom enterprise pricing on the website, or should we always use “Contact Us” for those high-end plans?

How can I determine if our SaaS is priced too low or too high, and what signs or metrics should I look at to make that call?

Do you charge for support or customer success services as part of your pricing, or keep those free and included for all customers?

For annual plans, should we offer a discount (like two months free) as part of our strategy, or is it better to keep monthly and annual pricing at the same effective rate?

How do you decide which features go into each plan tier without giving away so much value in the lower tier that no one feels the need to upgrade?

Does anyone have experience splitting a single SaaS product into Basic/Pro/Enterprise tiers, and what criteria did you use to differentiate the plans?

How do you handle feature updates and new features — do you push them into higher tiers only or give them to all existing customers regardless of plan?

Is it better to limit features or usage quotas in a lower-tier plan, and which approach tends to drive upgrades more effectively?

We have a single-plan SaaS right now. Does it make sense to introduce a cheaper limited tier to capture more users, or will that just cannibalize our main plan?

What’s the best way to package a complex set of features without confusing users on the pricing page, especially if your product’s value proposition is a bit hard to grasp?

How do you choose names for your pricing tiers (e.g., Starter, Growth, Enterprise), and does the tier name actually impact customer conversion rates?

Should we include perks like priority support or a dedicated account manager only in the top tier, and do benefits like that actually entice a meaningful number of upgrades?

Has anyone tried a “build your own plan” approach where customers pick and pay for individual add-on features instead of fixed tiers, and if so, what were the pros and cons?

At what point do you decide to split a single product into separate SKUs or modules for pricing purposes, rather than selling it as one unified offering?

How do included seat counts (e.g., “up to 5 users” on a base plan) work out in practice, and do they actually help drive upgrades or just complicate things?

Is there a risk in offering too many plan options, and how do you know if you currently have too few or too many tiers for optimal clarity?

Have you ever made changes to what’s included in each tier after launch, and if so, how did you communicate those changes to existing customers without upsetting them?

What is the best way to identify the right usage metric for a usage-based pricing model (for example, deciding between charging per API call versus per GB of data processed)?

Is a hybrid pricing model (base subscription fee + usage fees) better than a pure usage-based model to ensure a baseline of recurring revenue?

How can I prevent “bill shock” for customers on a usage-based model, and have you implemented things like usage caps or alert notifications to help manage that?

Any tips for conveying the value of a usage-based pricing model to customers who are used to flat monthly fees for software?

How do you design tiered usage pricing (like having different rates or bundled usage packages) so that bigger customers get a volume discount but revenue still scales up with usage?

If your SaaS pricing is usage-based, how do you handle it when one customer heavily uses the service and drives up costs — do you pass those costs on entirely or absorb some of them?

How do you technically implement usage tracking and billing — any recommended tools or best practices to ensure the usage data is accurate for invoicing?

Do customers generally prefer predictable flat-rate pricing, or are they okay with pay-as-you-go variability, and how can we gauge if a usage-based model might scare off potential users?

Has anyone switched from a per-user (seat-based) pricing model to a usage-based model or vice versa, and what impact did that change have on your growth or churn rates?

What’s a good way to offer a free usage tier or free credits to let users trial a usage-based service without giving so much away that they never need to pay?

In a usage-based model, how often do you bill customers (e.g., monthly for the prior month’s usage, or in real-time), and how do you handle overages — do you auto-upgrade customers or just charge the overage fees?

Should a usage-based pricing model have an upper cap (a maximum charge per month) to avoid scaring customers, or is it fine to have costs scale indefinitely with usage as long as it’s clear?

How do you decide the increment or unit for usage pricing — like per GB, per 1,000 transactions, etc. — and any tips for not making it so granular that bills get confusing?

Do you publish your usage-based pricing rates openly on the site or require customers to talk to sales for high-volume pricing, and how transparent should we be with complex usage fees?

Freemium vs. free trial: how did you decide which to offer for your SaaS, and did you end up regretting that choice or was it the right call?

If you offer a free trial, is 14 days typically enough or do B2B customers expect 30 days? How do you determine the optimal trial length for your user base?

Is it better to require a credit card upfront for a free trial to ensure more serious prospects, or allow sign-ups with no credit card to maximize the number of trial users?

For those running a freemium model, how do you prevent too many users from staying on the free plan forever and never converting to paid?

What percentage of free trial users usually convert to paid in your experience, and what have you done to improve that conversion rate?

If you have a freemium tier, what core value do you include in the free version versus paywall for paid plans, so that you’re not giving away so much that there’s no reason to upgrade?

Has anyone had success converting freemium users to paid via in-app prompts or upsell messages, and what upgrade tactics worked without annoying your users?

How do you handle support for free users in a freemium model without overwhelming your team with support requests from non-paying customers?

When a free trial ends, should the account automatically downgrade to a free plan (if you have one) or just lock the user out until they choose a paid plan?

Has anyone tried offering a limited-feature free trial versus a full-feature trial (with time limit), and which approach led to better conversion to paid customers?

How do you decide whether to end a free trial early if the user isn’t active or to let it run the full period? Have you tried a usage-based trial period that ends after the user hits certain activity milestones?

If a user doesn’t convert at the end of a trial, do you follow up with an offer (like a discount or extended trial) to try to win them, or do you just let them churn and focus on new leads?

For freemium products, at what point (in terms of usage or team size, etc.) do you prompt or pressure free users to upgrade, and how do you message that nudging without alienating them?

How do you handle inbound requests for discounts from prospective customers — do you have a standard discount policy or decide on a case-by-case basis?

Is giving “2 months free” on annual plans (effectively ~16% off) still considered best practice, or have some SaaS moved to smaller annual discounts (like 10%) or none at all?

What’s an appropriate discount to offer to educational institutions or nonprofits for a SaaS product, and how do you verify that status to prevent abuse of the discount?

Has anyone offered a lifetime deal (e.g., through platforms like AppSumo), and if so, did it actually bring in valuable long-term users or just create a support burden for relatively low-revenue customers?

How do you structure introductory or beta pricing (like offering a lower price to early adopters) and later raise prices without upsetting those initial customers?

We’re considering a limited-time promotional discount for our SaaS — any tips on how much to discount and how to do it without undermining the perceived value of the product?

Do the sales reps at your SaaS have flexibility to offer discounts to close deals, and if so, how much discretion do they get and what guardrails do you put in place to protect margins?

How do you calculate the impact of offering discounts on metrics like customer LTV and brand perception? I’m worried that frequent discounts could train customers to wait for a sale instead of paying full price.

Is it a good idea to offer a discounted starter plan specifically for startups or early-stage companies, or does that just complicate things compared to having one pricing scheme for all customers?

Has anyone tried a referral incentive program (like “give $X, get $X” credits or discounts) and did it drive more growth effectively than traditional discount promotions?

What’s the general consensus on using coupon codes in B2B SaaS — do they make your product seem “cheaper,” or are they an effective tool for targeted promotions and tracking campaigns?

We have some long-time customers on older, lower pricing. Should we grandfather those customers on their old rates indefinitely, or try to migrate them to our new pricing model with some discount to ease the transition?

In enterprise deals, when negotiating multi-year contracts or large user counts, what kind of discount is considered reasonable to offer for the commitment (e.g., multi-year discounts or volume-based pricing breaks)?

Do you openly publish any volume or multi-year discount structures on your pricing page, or do you handle those negotiations privately on a per-deal basis? Does being transparent with discounts help or hurt?

Are Black Friday or Cyber Monday deals a thing in B2B SaaS? Has anyone tried doing a seasonal sale for their SaaS product, or is that mostly a B2C tactic that doesn’t translate well to B2B?

How do you set pricing for international markets — do you simply convert your prices based on exchange rates or actively adjust for local purchasing power in different regions?

Should we localize our prices for certain markets (for example, offer lower pricing in countries like India or Brazil to match those markets’ willingness-to-pay), or is it better to stick to one global price to avoid arbitrage?

If you offer prices in multiple currencies, how do you handle currency fluctuations and how often do you update those localized prices? Do you lock an exchange rate for the quarter or update in real time?

For taxes like VAT/GST, do you include those in the displayed price for regions like the EU and UK, or add them at checkout? What are the best practices to avoid confusing international customers regarding taxes?

Have you ever had customers get upset about regional pricing differences (for example, discovering they’re paying more in their country than others pay elsewhere), and how do you manage perceptions of fairness around that?

How important is it to localize not just the currency but also things like price endings and formatting (e.g., $99 vs ¥9,900, or using commas vs periods)? Do these kind of local conventions measurably affect conversion?

Should we maintain separate pricing pages for different regions (say, a North America vs Europe pricing page), or just have one page with a currency selector or geo-detection to show localized pricing?

If you charge the same numeric value in different currencies (e.g., $100 vs €100), have you faced pushback because it ends up more expensive in one region due to the exchange rate difference?

Is there a reasonable way to A/B test different price points in different regions (say, test a lower price in Asia vs higher in North America) to gauge price elasticity, without causing confusion or backlash?

For a SaaS selling globally, is it okay to just offer all prices in USD as the default, or did you see a noticeable uptick in local sales after adding native currency pricing for other countries?

How do you handle customers in countries with much lower GDP or income levels — do you quietly offer special discounts if they ask, have a formal emerging-market pricing, or just stick to one price for everyone?

If you work with international resellers or partners, do you let them set their own local pricing and discounts, or do you enforce a consistent price globally?

What’s the best way to display and allow currency selection on a pricing page to minimize friction for international users? Should it auto-detect location or let the user toggle their currency?

Does anyone have experience geo-blocking sign-ups from certain regions you can’t support or haven’t figured out pricing for yet, or do you just accept global sign-ups at your default pricing and deal with it as it comes?

For localized pricing, do you also translate the pricing page content and marketing copy for each region, and how much do you think full localization (language + currency) impacts conversion rates in those markets?

How closely should we price relative to our competitors — for instance, if a competitor charges $50 per user, would pricing at $49 or $59 make a meaningful difference or is that just noise?