The Most Underutilised Growth Lever: Pricing
Most SaaS founders obsess over acquisition while ignoring pricing—the lever that can triple revenue without a single new customer.
The Pricing Fundamentals
Rule 1: You're Probably Underpriced
90% of early-stage SaaS products are underpriced. When did you last test a higher price point?
Rule 2: Price on Value, Not Cost
What does your product save customers? Time? Money? If you save a business £10,000/year, charging £1,000 is a bargain.
Rule 3: Test, Don't Guess
Pricing is testable. Run experiments on different cohorts before committing to changes.
The Psychology of SaaS Pricing
Anchoring Effect
Put your most expensive tier first. It makes middle tiers look reasonable.
Decoy Pricing
Include a tier that's intentionally less attractive to push customers toward your preferred option.
Price Endings
£97 vs £100 matters for B2C. For B2B, round numbers often work better (£100, £500, £1,000).
Pricing Models That Work
1. Per-Seat Pricing
Best for: Collaboration tools, team software
Example: £10/user/month
Pros: Scales with customer size
Cons: Encourages seat minimisation
2. Usage-Based Pricing
Best for: APIs, infrastructure, metered services
Example: £0.01 per API call
Pros: Low barrier to entry, scales with success
Cons: Revenue unpredictability
3. Feature-Based Tiers
Best for: Products with clear feature differentiation
Example: Basic (£29), Pro (£79), Enterprise (£199)
Pros: Clear upgrade path
Cons: Feature debates are endless
4. Outcome-Based Pricing
Best for: Products with measurable ROI
Example: 10% of recovered revenue
Pros: Aligns incentives perfectly
Cons: Requires tracking outcomes
The Three-Tier Strategy
Most successful SaaS products use three tiers:
Tier 1: Starter (£29-£49/month)
Tier 2: Professional (£79-£149/month)
Tier 3: Enterprise (£299+/month or custom)
Pricing Page Best Practices
1. Highlight the Recommended Tier
Make it visually obvious which tier you want customers to choose.
2. Annual Discount
Offer 15-20% discount for annual payments. It improves cash flow and reduces churn.
3. Feature Comparison
Clear, honest comparison table. Don't hide important limitations.
4. Social Proof
Show customer logos and testimonials near pricing.
5. Money-Back Guarantee
Reduce purchase anxiety with 30-day guarantees.
When to Raise Prices
**Good Times to Increase**:
**How to Increase**:
The Price Increase Playbook
**Step 1**: Raise prices 20% for all new customers
**Step 2**: Monitor conversion rate for 60 days
**Step 3**: If conversion stays stable, make permanent
**Step 4**: Repeat until you find resistance
Many founders discover they can double prices with minimal impact on conversion.
Enterprise Pricing Strategies
Don't Display Enterprise Pricing
Use "Contact Sales" for enterprise tiers. This allows value-based pricing for each prospect.
Multi-Year Discounts
Offer 20-40% discounts for 2-3 year commitments. It locks in revenue.
Value Metrics
Tie pricing to metrics that matter: users, revenue processed, data stored.
Common Pricing Mistakes
Action Items
Pricing is the fastest path to more revenue. Start experimenting today.