You might be surprised to learn that founders spend just six hours on average developing their SaaS pricing strategy. This barely covers time to plan a week’s lunch, let alone create a pricing structure that determines your business’s success.
This oversight can get pricey. A small 1% improvement in monetization leads to a 12.7% profit increase. Companies with optimized pricing strategies reach 80% gross margins, while others miss out on substantial revenue.
The right pricing during beta is significant for both new SaaS products and existing pricing model updates. We created this complete guide to help you develop a SaaS pricing strategy that delivers results.
Your pricing strategy deserves more than a six-hour consideration. It should be your powerful growth lever. Let’s head over to the exact steps you need to take.
Your SaaS business’s foundation rests on choosing the right pricing model. Many founders take this decision lightly, yet your pricing structure shapes how customers see value, what they’ll pay, and your business’s success.
Subscription-based approaches dominate SaaS, with seven main models worth looking at:
Flat-rate pricing gives customers a single product with one feature set at a fixed price. This makes sales simpler but reduces flexibility. CartHook shows how this approach can work well.
Usage-based pricing (or pay-as-you-go) ties cost to consumption. Users pay only what they use, which makes sense for services like cloud computing or API-based platforms where usage varies.
Tiered pricing comes with multiple packages at different price points. Most SaaS companies stick to three to five tiers. Each tier meets specific user needs without overwhelming them with extra features.
Per-user pricing bases charges on the number of people using your software. You’ll get predictable revenue, but companies might think twice about adding new users.
Per active user pricing charges only for people who actually use the platform. Companies like this because they don’t pay for inactive users.
Per-feature pricing divides tiers by functionality. Higher-priced packages unlock more features. This gives clear reasons to upgrade, but you must know what features your users value.
Freemium pricing lets users access simple features free while paying for premium ones. This makes it easy to start, but less than 10% of free users become paying customers.
Beta-stage products face unique trade-offs with each model:
Flat-rate pricing lets you focus all marketing on one clear offer. Notwithstanding that, different user segments might not get the right value.
Usage-based models bring flexibility and fairness—users pay only when they use the software. Revenue predictions get tricky though, and users might get confused about their bills.
Tiered pricing helps you reach multiple customer segments and boost revenue through upgrades. The trick lies in balancing lower tiers to attract customers while making premium features worth the extra cost.
Per-user pricing keeps things simple with steady revenue. The downside? Businesses often hesitate to grow their teams when costs rise with each new user.
The right model depends on how your product creates value. These factors matter:
Many successful SaaS companies start simple during beta launches and adjust their pricing as they learn more about customer behavior. Mike from Jira shares that they started with an $800 unlimited use plan without any market analysis or customer data. They refined their approach based on real-life feedback.
Note that pricing needs regular updates. Smart SaaS companies look at conversion rates and customer lifetime value to improve their strategies.
Market research should guide your beta pricing decisions. Many founders skip this crucial step and end up losing a lot of revenue and growth opportunities.
Your SaaS business needs to know its competition well. A solid competitor analysis shows you the market scene and helps you place your offerings in the right spot. Start by finding both direct competitors (those in your exact niche) and indirect competitors (those who solve similar problems differently).
When looking at competitor pricing:
Remember that competitor-based pricing has its limits. It gives you good standards, but basing prices only on competitors without factoring in your costs or customer value means missed revenue. One expert puts it well: “You want to know where your competitors are pricing their products so that you’re in the same ballpark, but they should not be guiding your decisions.”
Your unique value proposition (UVP) backs up your pricing strategy by showing why customers should pay for your product. A strong UVP shows what your product does and how it creates real results for users.
To build a strong UVP:
First, find the specific problems your solution helps ease. Ask yourself, “What immediate value does my solution give the end user?” These answers could become your UVP.
Next, explain what your product replaces. Help customers see the benefits of switching to your SaaS. Focus on features that set you apart from competitors.
Last, show how you can scale. Growing businesses need to know their investment will stay valuable as they expand.
Testing and proving your UVP right matters while finding product-market fit. This process confirms if your value matches what customers want. It helps avoid wasting resources on features that might not catch on.
Customer interviews are a great way to get human insights alongside your data. Timing matters a lot – reach out to churned customers within 24 hours for honest feedback.
Don’t ask “How much would you pay?” directly. Instead, try these better questions:
“How much did you spend to fix this problem before?”
“Which budget would cover a service like this?”
“What was that budget last year?”
For beta pricing, show your product first. Then ask potential customers what they’d call acceptable, expensive, or outrageous pricing. Usually, “acceptable” means “cheap,” “expensive” suggests they’re “willing to pay,” and “outrageous” shows it’s “too much.”
You should also learn about how customers feel about different packages and bundles. Ask about their priorities for subscription models, tiered structures, or extra features that could boost their experience.
Create an interview guide with questions that encourage stories rather than yes/no answers. Listen actively during interviews – ask your question, then let customers explain. This approach often reveals surprising insights about pricing that numbers alone can’t show.
Creating a SaaS pricing strategy needs more than random numbers—you need a systematic approach that lines up your business goals with how customers see your value. Your pricing decisions during beta launches lay the groundwork for future growth.
Your beta pricing needs clear objectives. Unlike final pricing, we focused on confirming your product’s value proposition and getting useful feedback. Your pricing goals should:
A SaaS expert puts it well: “Successful SaaS startups have leaders who are vigilant and take quick action to adjust their pricing strategy when there’s an opportunity to deliver a higher value proposition.”
Your pricing model’s foundation is the value metric—the unit you use to charge customers. The right value metric should:
To name just one example, see a SaaS that helps businesses generate leads—charging per lead makes more sense than per user. Pick a metric that links directly to your product’s main benefit.
Look at functional metrics (usage-based) versus outcome-based metrics (results-based). Per-user pricing works only when extra users actually bring more value to customers.
Keep it simple—successful SaaS companies often suggest three tiers for beta launches. This gives customers options without making things complicated.
Your pricing template should:
Note that your original pricing is just a starting point. One founder explains: “The goal is to start out in the right ballpark and refine as you learn more.”
This vital choice affects your data collection and early revenue. Paid betas offer clear benefits:
Free betas can get you more signups and wider feedback. If you go with a free beta, set a clear deadline for users to switch to paid plans.
Most successful founders suggest charging something, even at a big discount. One experienced SaaS founder notes: “Even if you’re pre-revenue, a beta launch helps you get data and commitment—the two ingredients that’ll get you more customers.”
Price testing at the time of beta launches is a great way to get data about what customers will pay for your SaaS product. Research shows that 98% of SaaS businesses see positive results after adjusting their pricing policies. Companies that optimize pricing show an impressive 11.09% lifetime customer value to customer acquisition cost ratio.
The Van Westendorp Price Sensitivity Meter (PSM) helps determine psychologically acceptable price ranges through a survey methodology. This approach works especially when you have new SaaS products with limited market data.
Your PSM implementation should:
Your data creates four intersecting lines that reveal acceptable price ranges. The “too cheap” and “expensive” lines’ intersection marks your lower bound, while “cheap” and “too expensive” establishes your upper bound.
Your beta should divide customers into cohorts to test different pricing approaches. Note that you should never show different prices for similar offerings at once. You can vary feature sets slightly at different price points to maintain ethical standards instead.
Your A/B tests should reach 95% statistical significance. Measuring revenue matters more than conversion rates alone, since higher prices might decrease conversions but increase overall revenue.
Customer feedback accelerates successful SaaS products. Companies with formal feedback processes perform 2.2 times better than their competitors.
Beyond numbers and testing, you should involve beta users in direct pricing discussions through interviews or focus groups. Users should also provide contextual feedback while they use your product actively.
Successful SaaS companies revisit their pricing more than once annually – about 43% of them. Your metrics should track pricing effectiveness throughout the beta phase and beyond.
The beta to full launch transition marks a crucial pricing decision point for SaaS founders. Your permanent pricing structure needs strategic decisions based on valuable feedback and tested approaches.
SaaS companies test their pricing yearly, and statistics show all but one of these companies make adjustments. Data from your beta phase gives you the perfect opportunity to refine your pricing. You should raise prices after you verify your product’s value and solve the biggest problems found during testing.
Note that price increases don’t need apologies—they reflect your product’s growing value. Your pricing should match the value as your product grows with new features and capabilities.
Clear communication is the life-blood of successful price changes. Beta users deserve direct contact—phone calls or face-to-face meetings work better than emails. Your customers need time to adjust their budgets, so give them 12-18 months notice before implementation.
Your message should include:
Grandfather clauses let existing customers keep their original pricing even with new rates. This approach shows appreciation for early adopters and helps smooth the transition to new pricing.
You can offer:
These options prevent customer alienation and reduce negative reactions. They also recognize early supporters who trusted your product before it proved itself.
The benefits are clear, but think over the complexity of running different price tiers. Some companies prefer time-limited grandfather clauses instead of permanent ones to move all customers to the new structure eventually.
SaaS pricing just needs careful planning, complete market research, and continuous optimization. Our complete guide shows how strategic pricing decisions during beta can substantially affect your product’s long-term success.
Smart founders know pricing strategy goes beyond simple number-crunching. Their approach combines deep customer understanding, competitive awareness, and adaptability based on real-life feedback. Companies that test and refine their pricing regularly perform better than those treating pricing as an afterthought.
Your beta launch pricing builds the foundation for future growth. Note that clear goals, appropriate pricing models, meaningful feedback, and careful transition planning to full launch are essential. The time and effort spent on pricing optimization pays off with a potential 12.7% profit boost.
Start analyzing your current pricing approach today. Put these strategies to work and watch your SaaS business thrive. Effective pricing remains one of the most powerful growth tools founders can use.