The Complete Guide to SaaS Pricing for Scale-ups

SaaS pricing is the single most powerful lever for growth that most scale-ups never pull. Research suggests a 1% improvement in pricing typically yields an 11% improvement in profit, far more than equivalent improvements in customer acquisition or cost reduction. Yet most founders set a price early on, based on gut feeling or a competitor’s pricing page, and never revisit it. This guide covers the key concepts I use to help B2B SaaS and IoT scale-ups build pricing that actually works.

The three questions

Every pricing project I run starts with three questions. What do your customers actually buy, not your features, but the outcome they are paying for? Who are you as a company, because your DNA determines what pricing model fits? And where are you heading, because whether you are optimizing for market share, margin, or lifetime value changes everything about how you price?

When those three line up, most pricing questions answer themselves. When they don’t, every pricing conversation turns into a fight. These three questions are explored in depth in my upcoming book, Pricing from the Core.

The fundamental law: Cost < Price < Value

Every pricing decision lives inside a sandbox defined by a simple inequality. Your cost is the floor. Your perceived value (what the customer believes your solution is worth) is the ceiling. Your price must sit between the two. The width of that sandbox determines your room to move. Everything in your business should be aimed at widening it.

For more on how to anchor your price to the value side of this equation, read my guide on value-based pricing.

The three-layer pricing architecture

One of the biggest mistakes I see in SaaS pricing is treating it as a single number. Mature SaaS pricing operates on three layers. Layer 1 is the base platform license: your predictable, recurring revenue foundation. Layer 2 is add-ons and modules: your expansion layer, where customers go deeper based on their specific needs. Layer 3 is usage and consumption: your fairness layer, ensuring customers pay in proportion to the value they extract.

Most scale-ups operate on one layer, a flat subscription, and it forces them to cram all their pricing strategy into a single number. I go deeper on how to implement this in packaging and tier design.

Drawing the lines

Drawing the lines between customer segments is one of the foundations of good pricing. A 10-person startup and a 500-person enterprise are not the same customer, and they should not be treated as such. Good fences are built on observable criteria that customers self-select into. The best fences feel natural, customers look at your pricing page and immediately know which option is for them.

What are they hiring you for?

Customers do not buy your product. They hire it to get something done. When you understand the job your product is hired to do, you can align your pricing with the outcome the customer is seeking, not the features they access. This is why I always start pricing projects with customer value analysis.

Common pricing mistakes

After 90+ projects, the same patterns come up again and again. Pricing based on cost rather than value. Copying competitors who have not done the work themselves. Defaulting to per-user pricing when it penalizes the adoption you need. Never changing the price even as the product evolves. Treating pricing as a finance problem when it is a strategy problem. And offering one-size-fits-all packaging when different customers have fundamentally different needs.

I cover the specifics of choosing the right pricing metric, pricing models compared, and why CTOs need to understand pricing in the deep-dive articles below.

The pricing guide library

This guide is the starting point. Each topic has a dedicated article that goes one level deeper.

• Value-based pricing for B2B SaaS. What it actually means and why most companies get it wrong.
• Choosing the right pricing metric. Why per-user pricing is a red flag and what to use instead.
• SaaS packaging and tier design. The three-layer architecture and how to build packages that grow with customers.
• Pricing for CTOs. Why technical leaders need a seat at the pricing table.
• Customer value analysis. How to understand what customers actually value before you price anything.
• SaaS pricing models compared. Subscription vs. usage-based vs. hybrid, and when to use each.

For the full methodology behind all of this, including step-by-step implementation guides and the frameworks I use with clients, my upcoming book Pricing from the Core covers the complete journey. If you want to be notified when it launches, get in touch.