Breaking into GTM

How do I price a SaaS product?

Choose what you charge for before you choose a number: the value metric (per seat, per use, per outcome) should grow with the value a customer gets. Then segment your customers, because a small team and a large company value you differently, and build tiers around those segments rather than around features. Set the price from the value you create, not from your cost or a competitor's list price; early SaaS founders routinely price as if they save customers thousands when they save far more. Talk about willingness to pay with buyers before you finish building, and treat the first price as an experiment you will raise. If usage varies widely between customers, a base subscription plus usage is the common answer, and a majority of usage-based companies now run that hybrid. In India, price Indian customers in rupees with GST shown and keep a separate dollar price list for buyers abroad. The rule: charge for what grows with value, and raise prices sooner than feels comfortable.

Part of Pricing on eChai Explore.

Go deeper

7 resources, 1 India-specific, 7 link-checked.

📰 Newsletter
✓ Link checked Freemium Beginner

Campbell ran pricing research at ProfitWell across thousands of companies, and his sequence (value metric, then segments, then experiments) is the one to follow. The line worth memorising: get the value metric right and you can get a lot of the rest wrong.

Pricing your SaaS product

From Lenny's Newsletter by Patrick Campbell with Lenny Rachitsky long read

  • Companies priced on a value metric grow at double the rate with half the churn and 2x expansion revenue.
  • Do not discount past 20 percent: bigger discounts convert but correlate strongly with churn.
  • Revenue per customer is about 30 percent higher just from showing the buyer's own currency symbol.
  • Case studies lift willingness to pay 10 to 15 percent; freemium usually works best 2 to 3 years in, not at launch.
Open lennysnewsletter.com →
✍️ Essay
✓ Link checked Free Beginner

The bounding method for a first price (cost to serve as the floor, cost of a heavy power user as the ceiling) plus the advice to keep pricing changeable in the product. Written for founders who are about to underprice, which is most of them.

The Price Is Right: And for Early-Stage SaaS Companies, It Needs to Be

From Andreessen Horowitz by Steven Sinofsky long read

  • Founders underprice by pricing against thousands saved when the product actually saves hundreds of thousands.
  • In enterprise direct sales, 50 percent or more off list is not unusual and is often required.
  • The SaaS norm is a 3 by N matrix: three plans across N attributes, which can imply dozens of real price points.
  • Wait until the last possible moment to publish price, because post-launch price changes are never read as good news.
Open a16z.com →
📰 Newsletter
✓ Link checked Freemium Advanced

Seven hybrid pricing patterns with named companies (GitHub, Shopify, Intercom, Zapier), plus Poyar's point that the enemy is not subscriptions, it is inflexible upfront commitments.

The state of usage-based pricing in SaaS

From Growth Unhinged by Kyle Poyar 12 min read

  • Usage-based pricing adoption slipped from 46 to 41 percent year on year, with 17 percent testing it.
  • Most usage-based businesses run a hybrid, not pure pay-as-you-go.
  • Intercom's Fin charges $0.99 per successful resolution, pricing on the outcome.
  • The real problem is not usage versus subscription, it is inflexible upfront commitments.
Open growthunhinged.com →
📄 Article
✓ Link checked India Free Intermediate

Concrete on the mechanics nobody outside India writes about: INR pricing, UPI AutoPay recurring success rates versus international cards, GST, and typical India plan pricing relative to the US sticker. Read it before you decide Indian buyers will not pay.

SaaS Pricing in India: The Rupee vs Dollar Dilemma

From productgrowth.in ~12 min read

  • Switching checkout display from USD to INR for Indian IPs cuts cart abandonment by up to 40 percent.
  • Recurring billing succeeds about 3x more often on UPI AutoPay in INR than on international corporate cards in USD.
  • Global SaaS companies commonly price Indian plans at 40 to 60 percent of the US sticker.
  • A 49 dollar plan lands near 5,000 rupees once you add the 84 rupee rate, 18 percent GST, and a 3.5 percent forex markup.
Open productgrowth.in →
📄 Article
✓ Link checked Free Beginner

The one piece to read if you only read one. It puts the trial and freemium question inside the bigger strategic choice (maximisation, penetration, skimming) so you are picking a funnel that matches your plan rather than copying whoever you admire.

The Complete Guide to SaaS Pricing Strategy

From Tomasz Tunguz by Tomasz Tunguz 25 min read

  • Payback period is customer acquisition cost divided by gross margin per customer.
  • Inside sales on a 5K to 30K dollar product does 3 to 8 deals a month, field sales does 1 to 3 a year.
  • Customers on a three part tariff grew usage 15.1 percent on average versus 0.9 percent on a two part tariff.
  • In 2023 usage based companies saw sales cycles stretch more than seat based ones, 29 percent versus 21 percent.
Open tomtunguz.com →

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