The Most Powerful Lever
Pricing is the exchange rate on the value you create. Packaging is how you group features to extract that value across different customer segments.
Value-Based Pricing
Price should be tied to a value metric (e.g., seats, API calls, active users) that scales naturally as the customer gets more value from the product.
Common Mistakes
- Cost-Plus Pricing: Calculating engineering costs and adding a 20% margin. Customers do not care about your costs; they care about their value.
FAQ
How often should we change pricing?
Most SaaS companies underprice and under-optimize. Pricing should be evaluated and tweaked at least annually.