{"id":10689,"date":"2024-12-21T12:41:19","date_gmt":"2024-12-21T12:41:19","guid":{"rendered":"https:\/\/userpilot.com\/blog\/saas-pricing-models\/"},"modified":"2026-03-05T23:14:12","modified_gmt":"2026-03-05T23:14:12","slug":"saas-pricing-models","status":"publish","type":"post","link":"https:\/\/userpilot.com\/blog\/saas-pricing-models\/","title":{"rendered":"SaaS Pricing Models: Don&#8217;t Leave Money on the Table"},"content":{"rendered":"<p><span data-color=\"transparent\">What if the <\/span><em><span data-color=\"transparent\">\u201c<\/span><\/em><span data-color=\"transparent\">perfect<\/span><em><span data-color=\"transparent\">\u201d <\/span><\/em><span data-color=\"transparent\">SaaS pricing model wasn&#8217;t just about choosing between flat subscriptions and usage-based billing?<\/span><\/p>\n<p><span data-color=\"transparent\">The reality is that pricing is a complex decision with a multitude of factors to consider. The model you use will affect your <\/span><a href=\"https:\/\/userpilot.com\/solutions\/expansion-revenue\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">revenue streams<\/span><\/a><span data-color=\"transparent\"> and directly influence how customers perceive your product, so this isn\u2019t something to rush into.\u00a0<\/span><\/p>\n<p><span data-color=\"transparent\">But don\u2019t worry: by the end of this post, you&#8217;ll clearly understand how to choose the perfect pricing model for <\/span><strong><span data-color=\"transparent\">your product<\/span><\/strong><span data-color=\"transparent\">. We\u2019ll start by covering seven models that have worked for SaaS brands, then dive into the intricacies of customer psychology and principles for balancing customer willingness to pay and your own long-term profitability.<\/span><\/p>\n<p><span data-color=\"transparent\">Excited? Let\u2019s jump in! \u00a0<\/span><\/p>\n<h2><strong><span data-color=\"transparent\">7 Types of different pricing models for SaaS companies<\/span><\/strong><\/h2>\n<p><strong><span data-color=\"transparent\">A pricing model is a framework used to determine the optimal price for a product or service<\/span><\/strong><span data-color=\"transparent\">. Below are the most popular SaaS pricing models, along with real-life examples:\u00a0<\/span><\/p>\n<h3><strong><span data-color=\"transparent\">1. Flat-rate pricing model<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">A flat-rate pricing structure offers a single price for access to all features. It&#8217;s like your Netflix subscription\u2014one monthly fee gives you unlimited access to their entire library of movies and shows. The fixed amount is typically charged monthly or annually, and it doesn\u2019t matter how much (or little) the user engages with the product within that period.<\/span><\/p>\n<p><strong><span data-color=\"transparent\">Example: <\/span><\/strong><a href=\"https:\/\/buffer.com\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">Buffer<\/span><\/a> <span data-color=\"transparent\">provides fixed prices with no additional or hidden costs. This makes it easy for current and potential customers to understand the value they&#8217;re getting on each plan. \u00a0<\/span><\/p>\n<figure style=\"width: 1888px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/6b141ce5-9b34-4b5b-bdc7-c7767702a610.png\" alt=\"Buffer\u2019s flat-rate pricing structure.\" width=\"1888\" height=\"1211\" \/><figcaption class=\"wp-caption-text\">Buffer\u2019s flat-rate pricing structure.<\/figcaption><\/figure>\n<p><!-- This container is the main wrapper for the quiz on SaaS pricing models. --><\/p>\n<div id=\"userpilot-quiz-container\">\n<p><!-- The progress bar will be updated via JavaScript. --><\/p>\n<div id=\"up-progress-bar-container\">\n<div id=\"up-progress-bar\" style=\"width: 25%;\"><\/div>\n<\/div>\n<p><!-- This div will hold all the quiz steps. --><\/p>\n<div id=\"up-quiz-content\">\n<p><!-- Question 1 (Initially Visible) --><\/p>\n<div class=\"up-quiz-step\" style=\"display: block;\" data-step=\"1\">\n<h3>How do you currently gather feedback to inform your SaaS pricing models?<\/h3>\n<div class=\"up-answers\"><button class=\"up-answer-btn\">We use targeted in-app surveys to understand perceived value<\/button><br \/>\n<button class=\"up-answer-btn\">We occasionally send out email surveys<\/button><br \/>\n<button class=\"up-answer-btn\">We base it on competitor pricing rather than direct feedback<\/button><\/div>\n<\/div>\n<p><!-- Question 2 (Initially Hidden) --><\/p>\n<div class=\"up-quiz-step\" style=\"display: none;\" data-step=\"2\">\n<h3>How do you test different pricing strategies for different customer segments?<\/h3>\n<div class=\"up-answers\"><button class=\"up-answer-btn\">We A\/B test different pricing in-app for specific user segments<\/button><br \/>\n<button class=\"up-answer-btn\">We have a single pricing strategy for all users<\/button><br \/>\n<button class=\"up-answer-btn\">We find it too difficult to run pricing experiments<\/button><\/div>\n<\/div>\n<p><!-- Question 3 (Initially Hidden) --><\/p>\n<div class=\"up-quiz-step\" style=\"display: none;\" data-step=\"3\">\n<h3>How do you encourage users to upgrade from a free or lower-tier plan?<\/h3>\n<div class=\"up-answers\"><button class=\"up-answer-btn\">We use in-app messages to highlight the value of premium features<\/button><br \/>\n<button class=\"up-answer-btn\">We rely on email marketing campaigns<\/button><br \/>\n<button class=\"up-answer-btn\">We hope users discover the benefits on their own<\/button><\/div>\n<\/div>\n<p><!-- Final Result\/CTA (Initially Hidden) --><\/p>\n<div class=\"up-quiz-step\" style=\"display: none;\" data-step=\"4\">\n<h3>Don&#8217;t leave money on the table.<\/h3>\n<p>The best SaaS pricing models are built on a deep understanding of customer value and behavior. Userpilot helps you collect direct feedback with in-app surveys, segment your users to tailor pricing, and run experiments to find the perfect strategy for sustainable growth.<\/p>\n<p><a id=\"up-cta-btn\" href=\"https:\/\/userpilot.com\/userpilot-demo\/\" target=\"_self\">Build a Better Pricing Strategy<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<p><!-- Link to the JavaScript file. Remember to update this path. --><br \/>\n<script defer src=\"https:\/\/userpilot.com\/blog\/wp-content\/uploads\/2024\/12\/saas-pricing-models.js\"><\/script><\/p>\n<h3><strong><span data-color=\"transparent\">2. Usage-based pricing<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">Usage-based pricing\u2014or pay-as-you-go\u2014charges customers based on consumption. The <\/span><a href=\"https:\/\/userpilot.com\/blog\/product-usage\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">product usage<\/span><\/a><span data-color=\"transparent\"> here is typically measured by metrics, like data storage used, transactions processed, or the number of API calls made.\u00a0<\/span><\/p>\n<p><span data-color=\"transparent\">This pricing model encourages mindful spending, as users know the costs associated with their usage.\u00a0<\/span><\/p>\n<p><strong><span data-color=\"transparent\">Example: <\/span><\/strong><a href=\"https:\/\/stripe.com\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">Stripe<\/span><\/a><span data-color=\"transparent\"> charges a small fee per transaction processed, making it a cost-effective solution for businesses with varying sales volumes.\u00a0<\/span><span data-color=\"transparent\">\u00a0\u00a0<\/span><\/p>\n<figure style=\"width: 1951px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/35979f3c-2281-431e-af7c-ffb725bf1502.png\" alt=\"Stripe\u2019s usage-based pricing.\" width=\"1951\" height=\"1244\" \/><figcaption class=\"wp-caption-text\">Stripe\u2019s usage-based pricing.<\/figcaption><\/figure>\n<h3><strong><span data-color=\"transparent\">3. Tiered pricing model<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">The tiered pricing strategy offers different packages with varying features and price points. It helps SaaS companies cater to a wide range of customers with different needs and budgets.\u00a0<\/span><\/p>\n<p><span data-color=\"transparent\">This structure also allows for <\/span><a href=\"https:\/\/userpilot.com\/blog\/upsell-opportunities-saas\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">natural upselling<\/span><\/a><span data-color=\"transparent\">. As a customer&#8217;s business grows, they can easily upgrade to a higher tier to access more advanced features or increased usage limits.<\/span><\/p>\n<p><strong><span data-color=\"transparent\">Example: <\/span><\/strong><a href=\"https:\/\/www.zoom.com\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">Zoom <\/span><\/a><span data-color=\"transparent\">offers multiple pricing tiers. Users can start on the &#8220;Pro&#8221; plan, allowing a maximum of 100 meeting participants, and later upgrade to the &#8220;Business&#8221; or &#8220;Business Plus&#8221; plans as their needs grow.<\/span><\/p>\n<figure style=\"width: 1456px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/aa38ac69-1d44-4891-b364-df387f686982.png\" alt=\"Zoom\u2019s pricing tiers. \" width=\"1456\" height=\"1074\" \/><figcaption class=\"wp-caption-text\">Zoom\u2019s pricing tiers.<\/figcaption><\/figure>\n<h3><strong><span data-color=\"transparent\">4. Per-user pricing model<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">With per-user pricing, you&#8217;re essentially charging for each individual who uses your software. It&#8217;s a common approach for collaborative tools like project management software or <\/span><a href=\"https:\/\/userpilot.com\/blog\/customer-relationship-management-examples\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">CRM<\/span><\/a><span data-color=\"transparent\"> systems.<\/span><\/p>\n<p><span data-color=\"transparent\">Most SaaS companies that use per-user pricing do so because it directly aligns cost with the value received: customers only pay for the number of users who benefit from the software. This makes it easy for customers to scale their usage up or down as needed and also means the SaaS provider is fairly compensated for the resources used.<\/span><\/p>\n<p><strong><span data-color=\"transparent\">Example: <\/span><\/strong><a href=\"https:\/\/workspace.google.com\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">Google Workspace<\/span><\/a><span data-color=\"transparent\"> charges customers per user per month.\u00a0<\/span><\/p>\n<figure style=\"width: 1335px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/b6effd24-f111-4dc6-8d6a-8127a58f55a1.png\" alt=\"The pricing plan for Google Workspace.\" width=\"1335\" height=\"916\" \/><figcaption class=\"wp-caption-text\">The pricing plan for Google Workspace.<\/figcaption><\/figure>\n<h3><strong><span data-color=\"transparent\">5. Feature-based pricing model<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">This model follows the same principle as per-user pricing, with the difference being that customers pay for features or modules used, not the number of seats occupied.\u00a0<\/span><\/p>\n<p><span data-color=\"transparent\">Per-feature pricing can become complex and potentially confusing for customers if there are many features to choose from. However, you can simplify the decision-making process by providing clear communication.\u00a0<\/span><\/p>\n<p><strong><span data-color=\"transparent\">Example: <\/span><\/strong><a href=\"https:\/\/aws.amazon.com\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">Amazon Web Services (AWS)<\/span><\/a><span data-color=\"transparent\"> only charges users for the specific services they use.<\/span><\/p>\n<figure style=\"width: 2460px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/0cbcb0f8-91a1-4a97-a27e-9e1d4f918ca6.png\" alt=\"AWS' per feature pricing strategy.\" width=\"2460\" height=\"1037\" \/><figcaption class=\"wp-caption-text\">AWS&#8217; per feature pricing strategy.<\/figcaption><\/figure>\n<h3><strong><span data-color=\"transparent\">6. Per active user pricing<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">This is a variation of the per-user model where you charge customers only for the users who are actively using your software during a specific period (often defined by the <\/span><a href=\"https:\/\/userpilot.com\/blog\/dau-wau-mau\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">monthly active user metric<\/span><\/a><span data-color=\"transparent\">). It\u2019s effective because it addresses the concern of paying for inactive users, which can be a common issue with the traditional per-user model.<\/span><\/p>\n<p><span data-color=\"transparent\">The per-active user model is often a good fit for large organizations with many users who may not all be actively using the software simultaneously. While it might offer less of an advantage to smaller businesses, it can still be valuable for any company with fluctuating usage patterns.<\/span><\/p>\n<p><strong><span data-color=\"transparent\">Example: <\/span><\/strong><a href=\"https:\/\/slack.com\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">Slack<\/span><\/a><strong><span data-color=\"transparent\">\u2019<\/span><\/strong><span data-color=\"transparent\">s customers pay<\/span> <span data-color=\"transparent\">based on how many team members actively use the product each month.<\/span><\/p>\n<figure style=\"width: 1843px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/47368a7c-5bef-4f26-8fcf-bad752d56854.png\" alt=\"Slack\u2019s pricing.\" width=\"1843\" height=\"1344\" \/><figcaption class=\"wp-caption-text\">Slack\u2019s pricing.<\/figcaption><\/figure>\n<h3><strong><span data-color=\"transparent\">7. Freemium pricing model<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">The <\/span><a href=\"https:\/\/userpilot.com\/blog\/freemium-strategy\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">freemium model<\/span><\/a><span data-color=\"transparent\"> offers a free basic version of the software while charging for more advanced features.\u00a0<\/span><\/p>\n<p><span data-color=\"transparent\">This model lowers the barrier to entry and allows users to experience your product\u2019s value without any upfront commitment. However, the freemium model requires a delicate balance: your free version needs to be compelling enough to attract users but limited enough to incentivize upgrades.\u00a0<\/span><\/p>\n<p><strong><span data-color=\"transparent\">Example: <\/span><\/strong><span data-color=\"transparent\">Canva offers a 100% free version with limited functionality.\u00a0\u00a0<\/span><\/p>\n<figure style=\"width: 1024px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/d8c2f390-4fec-4dbb-84de-5f1bcd740d4e.png\" alt=\"Canva\u2019s free version.\u00a0\" width=\"1024\" height=\"399\" \/><figcaption class=\"wp-caption-text\">Canva\u2019s free version.<\/figcaption><\/figure>\n<h2><strong><span data-color=\"transparent\">How does SaaS pricing work?<\/span><\/strong><\/h2>\n<p><span data-color=\"transparent\">Choosing the right pricing model is just one piece of the puzzle. To achieve sustainable success, you need to develop comprehensive SaaS pricing strategies that align with your business goals and <\/span><a href=\"https:\/\/userpilot.com\/blog\/customer-wants-and-needs-analysis\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">customer needs<\/span><\/a><span data-color=\"transparent\">.\u00a0<\/span><\/p>\n<p><span data-color=\"transparent\">Let&#8217;s dive into the key elements of these strategies:<\/span><\/p>\n<h3><strong><span data-color=\"transparent\">Value-based pricing<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">Value-based pricing is one of the most effective SaaS pricing strategies because it&#8217;s based on your product&#8217;s perceived value and the customer&#8217;s <\/span><a href=\"https:\/\/userpilot.com\/blog\/willingness-to-pay\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">willingness to pay<\/span><\/a><span data-color=\"transparent\">.<\/span><\/p>\n<p><span data-color=\"transparent\">The downside? Determining these qualitative factors isn&#8217;t easy. How do you<\/span><a href=\"https:\/\/userpilot.com\/blog\/customer-perceived-value\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\"> accurately measure the perceived value<\/span><\/a><span data-color=\"transparent\"> of increased efficiency or time savings? How do you determine the price points at which your target market sees value but doesn&#8217;t feel the cost is prohibitive?<\/span><\/p>\n<div style=\"background-color: #e9e5fe; padding: 20px; color: black;\"><strong><span data-color=\"transparent\">\ud83d\udca1 Pro tip: <\/span><\/strong><span data-color=\"transparent\">The key is to conduct extensive user research. Deploy targeted customer surveys, focus group studies, and even 1:1 interviews to understand your customers\u2019 needs, <\/span><a href=\"https:\/\/userpilot.com\/blog\/customer-pain-points\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">pain points<\/span><\/a><span data-color=\"transparent\">, and pricing thresholds.<\/span><\/div>\n<figure style=\"width: 1824px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/fe4ab769-a277-4d7d-a654-8c74346199ab.png\" alt=\"Value-based pricing strategy.\u00a0\" width=\"1824\" height=\"1048\" \/><figcaption class=\"wp-caption-text\">Value-based pricing strategy.<\/figcaption><\/figure>\n<h3><strong><span data-color=\"transparent\">Cost-plus pricing strategy<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">This is a more straightforward, &#8216;bottom-up&#8217; approach where you calculate your total costs (<\/span><a href=\"https:\/\/userpilot.com\/blog\/product-development-life-cycle\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">development<\/span><\/a><span data-color=\"transparent\">, marketing, support, etc.) and add a markup to determine your selling price.<\/span><\/p>\n<p><span data-color=\"transparent\">Now, here comes the tricky part:<\/span> <span data-color=\"transparent\">figuring out the right markup percentage. A good starting point is to research industry standards and see what markup percentages are common for similar SaaS products. Don&#8217;t forget to factor in your desired profit margins. How much profit do you want to make on each sale? This will help you determine a markup that aligns with your financial goals.\u00a0<\/span><\/p>\n<div style=\"background-color: #e9e5fe; padding: 20px; color: black;\"><strong><span data-color=\"transparent\">\ud83d\udca1 Pro tip:<\/span><\/strong><span data-color=\"transparent\"> Consider using a tiered pricing system. You could have a higher markup for premium features or higher usage tiers, allowing you to capture more value from customers who need more advanced functionality.<\/span><\/div>\n<figure style=\"width: 1824px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/af658c16-7020-4d60-a9a9-58f40686795e.png\" alt=\"Cost-plus pricing strategy.\" width=\"1824\" height=\"937\" \/><figcaption class=\"wp-caption-text\">Cost-plus pricing strategy.<\/figcaption><\/figure>\n<h3><strong><span data-color=\"transparent\">Competitor-based pricing<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">Unlike the other SaaS pricing strategies, this model doesn\u2019t necessarily prioritize factors like perceived value or production costs. The main goal here is to <\/span><a href=\"https:\/\/userpilot.com\/blog\/product-positioning\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">position your product<\/span><\/a><span data-color=\"transparent\"> by offering prices similar to what your competitors are charging.\u00a0<\/span><\/p>\n<p><span data-color=\"transparent\">You can approach competitive pricing in one of three ways:<\/span><\/p>\n<ul>\n<li><strong><span data-color=\"transparent\">Price below competitors:<\/span><\/strong><span data-color=\"transparent\"> Use this if you aim to undercut competitors and capture market share quickly.<\/span><\/li>\n<li><strong><span data-color=\"transparent\">Price above competitors:<\/span><\/strong><span data-color=\"transparent\"> Want potential customers to see you as the cr\u00e8me de la cr\u00e8me? This strategy positions your product as a premium offering that conveys a sense of higher quality or exclusivity. But don&#8217;t forget: <\/span>A higher price demands unique features or benefits that truly set your product <span data-color=\"transparent\">apart.<\/span><\/li>\n<li><strong><span data-color=\"transparent\">Match competitor pricing:<\/span><\/strong><span data-color=\"transparent\"> This approach helps you maintain a competitive edge by staying in line with prevailing market prices.<\/span><\/li>\n<\/ul>\n<div style=\"background-color: #e9e5fe; padding: 20px; color: black;\"><strong><span data-color=\"transparent\">\ud83d\udca1 Pro tip: <\/span><\/strong><a href=\"https:\/\/userpilot.com\/blog\/product-differentiation\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">Product differentiation<\/span><\/a><span data-color=\"transparent\"> is crucial, no matter your strategy. <\/span>What unique benefits do you offer that your competitors don&#8217;t? Always highlight those strengths to avoid becoming just another face in the crowd.<\/div>\n<figure style=\"width: 1824px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/9eb55a59-0346-42b3-b33e-28cff654ce9e.png\" alt=\"Competitive pricing.\u00a0\" width=\"1824\" height=\"1048\" \/><figcaption class=\"wp-caption-text\">Competitive pricing.<\/figcaption><\/figure>\n<h2><strong><span data-color=\"transparent\">The psychology behind SaaS pricing models<\/span><\/strong><\/h2>\n<p><span data-color=\"transparent\">Ever wonder why some prices just seem more appealing than others? It&#8217;s not always about the numbers themselves. Psychological factors play a significant role in how customers perceive your pricing, especially with <\/span><a href=\"https:\/\/userpilot.com\/blog\/saas-products\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">SaaS tools<\/span><\/a><span data-color=\"transparent\">, where value can be less tangible than with physical products.\u00a0<\/span><\/p>\n<p><span data-color=\"transparent\">Here are some psychological principles to keep in mind when setting prices:\u00a0<\/span><\/p>\n<ul>\n<li><strong><span data-color=\"transparent\">Anchoring:<\/span><\/strong><span data-color=\"transparent\"> Use a high initial price to make subsequent prices seem more reasonable. Imagine seeing a software package initially priced at $500 per month, then later offered at $200 per month. That initial high price will act as an anchor that makes the discounted price seem like a steal.<\/span><\/li>\n<li><strong><span data-color=\"transparent\">Loss aversion:<\/span><\/strong><span data-color=\"transparent\"> People hate losing more than they love winning. Framing your pricing in terms of what customers stand to lose (e.g., &#8220;Don&#8217;t miss out on this limited-time discount!&#8221;) can be more effective than focusing on gains.<\/span><\/li>\n<li><strong><span data-color=\"transparent\">Framing:<\/span><\/strong><span data-color=\"transparent\"> It&#8217;s not just what you say, but <\/span><em><span data-color=\"transparent\">how<\/span><\/em><span data-color=\"transparent\"> you say it. <\/span><a href=\"https:\/\/userpilot.com\/blog\/features-advantages-benefits\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">Always lead in with the benefits customers stand to enjoy<\/span><\/a><span data-color=\"transparent\">.\u00a0<\/span><\/li>\n<li><strong><span data-color=\"transparent\">Decoy effect:<\/span><\/strong><span data-color=\"transparent\"> This involves offering a less attractive option to make a target option seem more appealing by comparison.<\/span><\/li>\n<\/ul>\n<p><span data-color=\"transparent\">Consider the following example:\u00a0<\/span><\/p>\n<figure style=\"width: 1824px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/2270bbd4-42d7-4916-b574-6e0bde81f11a.png\" alt=\"How the decoy effect works for tiered pricing.\" width=\"1824\" height=\"1048\" \/><figcaption class=\"wp-caption-text\">How the decoy effect works for tiered pricing.<\/figcaption><\/figure>\n<ul>\n<li><strong><span data-color=\"transparent\">Choice architecture:<\/span><\/strong><span data-color=\"transparent\"> How you present your pricing options can significantly influence customer choices. For example, highlighting a specific plan as the \u201cdefault\u201d or \u201cmost popular\u201d can subtly nudge customers toward it.<\/span><\/li>\n<\/ul>\n<h2><strong><span data-color=\"transparent\">How to design the best pricing model for your SaaS product<\/span><\/strong><\/h2>\n<p><span data-color=\"transparent\">Follow these simple steps to design a pricing model that meets customer needs while maximizing revenue:\u00a0<\/span><\/p>\n<h3><strong><span data-color=\"transparent\">1. Consider the entire customer lifecycle<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">Think beyond the initial sale and align your pricing strategy with the <\/span><a href=\"https:\/\/userpilot.com\/blog\/customer-lifecycle-management\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">customer lifecycle<\/span><\/a><span data-color=\"transparent\">\u2014from acquisition to retention and expansion.\u00a0<\/span><\/p>\n<p><span data-color=\"transparent\">For example, a freemium model might be excellent for attracting potential customers, but without well-thought-out upselling strategies, many customers will remain on the free plan.\u00a0<\/span><\/p>\n<p><span data-color=\"transparent\">Few tips for capturing value at each stage of the customer journey:\u00a0<\/span><\/p>\n<ul>\n<li><span data-color=\"transparent\">Offer incentives or discounts to encourage initial adoption.<\/span><\/li>\n<li><span data-color=\"transparent\">Provide clear upgrade paths and highlight the value of premium features to drive <\/span><a href=\"https:\/\/userpilot.com\/blog\/free-to-paid-conversion-strategy\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">free-to-paid conversion<\/span><\/a><span data-color=\"transparent\">.\u00a0\u00a0<\/span><\/li>\n<li><span data-color=\"transparent\">Introduce upselling and cross-selling opportunities as customers mature.\u00a0<\/span><\/li>\n<li><span data-color=\"transparent\">Offer loyalty discounts or incentives to <\/span><a href=\"https:\/\/userpilot.com\/blog\/subscription-renewal\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">encourage renewals<\/span><\/a><span data-color=\"transparent\">.<\/span><\/li>\n<\/ul>\n<figure style=\"width: 2000px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/c02cc637-eb74-41a1-9ff4-d8257511144a.png\" alt=\"Customer lifecycle map.\u00a0\" width=\"2000\" height=\"1507\" \/><figcaption class=\"wp-caption-text\">Customer lifecycle map.<\/figcaption><\/figure>\n<h3><strong><span data-color=\"transparent\">2. Get customer feedback on your pricing<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">To design a pricing model that truly resonates with your customers, it&#8217;s essential to understand their needs, budget constraints, and perceived value. Without this data, you risk setting prices in a vacuum, which can lead to underpricing or overpricing your product.\u00a0<\/span><\/p>\n<p><span data-color=\"transparent\">How to <\/span><a href=\"https:\/\/userpilot.com\/blog\/collect-customer-feedback\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">collect customer feedback<\/span><\/a><span data-color=\"transparent\">? Trigger in-app surveys, asking customers how they perceive the value of your product compared to its price. You can follow up your quantitative surveys with qualitative questions that give customers room to express their thoughts (e.g., &#8220;Anything you&#8217;d like to share?&#8221;).<\/span><\/p>\n<figure style=\"width: 2880px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/cb9a39b8-b05c-4fc8-9111-3aa1c89c03ba-scaled.png\" alt=\"Design in-app surveys like this code-free.\u00a0\" width=\"2880\" height=\"1620\" \/><figcaption class=\"wp-caption-text\">Design in-app surveys like this code-free.<\/figcaption><\/figure>\n<div style=\"background-color: #e9e5fe; padding: 20px; color: black;\"><strong><span data-color=\"transparent\">\ud83d\udca1 Pro tip<\/span><\/strong><span data-color=\"transparent\">: Present your pricing information in a way that clearly explains each plan and avoids any potential confusion.\u00a0<\/span><\/div>\n<p><span data-color=\"transparent\">For example, notice how<\/span> <a href=\"https:\/\/userpilot.com\/pricing\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">Userpilot breaks down each pricing tier<\/span><\/a><span data-color=\"transparent\">. Adding the &#8220;popular&#8221; tag to the Growth plan is a great example of the choice architecture principle in action (remember that?).<\/span><\/p>\n<figure id=\"attachment_397164\" aria-describedby=\"caption-attachment-397164\" style=\"width: 2344px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2024\/02\/userpilot-pricing-plans-6.png\"><img decoding=\"async\" class=\"wp-image-397164 size-full\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2024\/02\/userpilot-pricing-plans-6.png\" alt=\"Userpilot pricing\" width=\"2344\" height=\"2246\" srcset=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2024\/02\/userpilot-pricing-plans-6.png 2344w, https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2024\/02\/userpilot-pricing-plans-6-450x431.png 450w, https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2024\/02\/userpilot-pricing-plans-6-1024x981.png 1024w\" sizes=\"(max-width: 2344px) 100vw, 2344px\" \/><\/a><figcaption id=\"caption-attachment-397164\" class=\"wp-caption-text\"><a href=\"https:\/\/userpilot.com\/pricing\/\" target=\"_blank\" rel=\"noopener\">Userpilot\u2019s pricing page<\/a>.<\/figcaption><\/figure>\n<h3><strong><span data-color=\"transparent\">3. Invest in \u201cPricing-as-a-Product\u201d<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">Treat your <\/span><a href=\"https:\/\/userpilot.com\/blog\/saas-pricing-models\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">pricing strategy<\/span><\/a><span data-color=\"transparent\"> as an ongoing project, just like you would with your product development. This means continuously analyzing data and iterating on your tactics to optimize for customer value.<\/span><\/p>\n<p><span data-color=\"transparent\">These two steps will help:\u00a0<\/span><\/p>\n<ul>\n<li><strong><span data-color=\"transparent\">Assign ownership:<\/span><\/strong><span data-color=\"transparent\"> Dedicate a person or team to own your pricing strategy. This ensures that your pricing remains a priority and is consistently reviewed and refined.<\/span><\/li>\n<li><strong><span data-color=\"transparent\">Understand your &#8220;customers&#8221;:<\/span><\/strong><span data-color=\"transparent\"> Identify both your external customers and internal stakeholders (e.g., sales, <\/span><a href=\"https:\/\/userpilot.com\/blog\/customer-success-strategy\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">customer success<\/span><\/a><span data-color=\"transparent\">) and regularly collect feedback from them. External customers provide insights into their willingness to pay and perceived value, while internal stakeholders offer valuable perspectives on market dynamics, competitive pricing, and sales strategies. Gathering input from both groups will equip you to develop a well-rounded and informed pricing strategy.<\/span><\/li>\n<\/ul>\n<h3><strong><span data-color=\"transparent\">4. Optimize pricing based on different customer segments<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">A one-size-fits-all approach to pricing can lead to missed opportunities and <\/span><a href=\"https:\/\/userpilot.com\/blog\/customer-dissatisfaction\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">customer dissatisfaction<\/span><\/a><span data-color=\"transparent\">. For example, enterprise customers typically have heavier needs than small teams or solopreneurs. Imagine having flat pricing for both user groups!<\/span><\/p>\n<p><span data-color=\"transparent\">One of two things will happen: either the enterprise customer will use more than they&#8217;re paying for (meaning you&#8217;re leaving money on the table), or the small business will overpay for features they don&#8217;t use. By <\/span><a href=\"https:\/\/userpilot.com\/blog\/user-segmentation\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">segmenting your customers<\/span><\/a><span data-color=\"transparent\">, you can tailor your pricing to their specific needs and willingness to pay.<\/span><\/p>\n<p><span data-color=\"transparent\">So, how do you identify these segments? Consider factors like:\u00a0<\/span><\/p>\n<ul>\n<li><span data-color=\"transparent\">Product usage.\u00a0<\/span><\/li>\n<li><span data-color=\"transparent\">Company size.\u00a0<\/span><\/li>\n<li><span data-color=\"transparent\">Industry.<\/span><\/li>\n<li><span data-color=\"transparent\">Geographic location\u2014if you want to factor in purchasing power parity.<\/span><\/li>\n<\/ul>\n<p><span data-color=\"transparent\">Here\u2019s an example of segmenting <\/span><a href=\"https:\/\/userpilot.com\/blog\/power-users\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">power users<\/span><\/a><span data-color=\"transparent\"> to better understand their behavior:\u00a0<\/span><\/p>\n<figure style=\"width: 1347px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/d8b861db-494e-4ceb-835c-07c23f74c8eb.png\" alt=\"\" width=\"1347\" height=\"353\" \/><figcaption class=\"wp-caption-text\">Power user segment example.<\/figcaption><\/figure>\n<h3><strong><span data-color=\"transparent\">5. Use your &#8220;sticky&#8221; features for free (within reason)<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">Sticky features are those that users find indispensable or difficult to replicate elsewhere\u2014they\u2019re often the key drivers of retention for many SaaS companies.<\/span><\/p>\n<p><span data-color=\"transparent\">For example, imagine a design tool that allows users to easily create stunning graphics. Once they get used to the speed and ease of use, they&#8217;re less likely to switch to a competitor, even if it offers a slightly lower price.\u00a0<\/span><\/p>\n<p><strong><span data-color=\"transparent\">Key considerations when giving out your key features for free:<\/span><\/strong><\/p>\n<ul>\n<li><strong><span data-color=\"transparent\">Choose the right features:<\/span><\/strong><span data-color=\"transparent\"> Identify features that are truly valuable.\u00a0<\/span><\/li>\n<li><strong><span data-color=\"transparent\">Set reasonable limits:<\/span><\/strong><span data-color=\"transparent\"> Balance free access with limitations that encourage upgrades without hindering the <\/span><a href=\"https:\/\/userpilot.com\/blog\/improve-user-experience\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">user experience<\/span><\/a><span data-color=\"transparent\">.<\/span><\/li>\n<li><strong><span data-color=\"transparent\">Communicate the value:<\/span><\/strong><span data-color=\"transparent\"> Clearly explain the benefits of the sticky features and how they can help users achieve their goals.<\/span><\/li>\n<\/ul>\n<h3><strong><span data-color=\"transparent\">6. Don&#8217;t jump to a &#8220;pricing for value&#8221; strategy off the bat<\/span><\/strong><\/h3>\n<p><span data-color=\"transparent\">While value-based pricing is often the ultimate goal, it might not be the best place to start, especially if you&#8217;re new to the SaaS game or still testing out different approaches.<\/span><\/p>\n<p><span data-color=\"transparent\">Why? Because charging the maximum price customers are willing to pay can backfire if you haven&#8217;t fully established your product&#8217;s value proposition. Existing customers may churn and even spread <\/span><a href=\"https:\/\/userpilot.com\/blog\/negative-word-of-mouth\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">negative word of mouth<\/span><\/a><span data-color=\"transparent\"> if the perceived value doesn&#8217;t consistently meet their expectations.<\/span><\/p>\n<p><strong><span data-color=\"transparent\">The solution: <\/span><\/strong><span data-color=\"transparent\">Start with simpler models like cost-plus or competitor-based pricing to establish a baseline and gather data. You can gradually shift towards a value-based approach as you <\/span><a href=\"https:\/\/userpilot.com\/blog\/customer-insights\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">gain more customer insights<\/span><\/a><span data-color=\"transparent\">.\u00a0<\/span><\/p>\n<h3><strong><span data-color=\"transparent\">7. Run pricing experiments<\/span><\/strong><\/h3>\n<p><a href=\"https:\/\/userpilot.com\/blog\/ab-testing-product-management\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">A\/B test<\/span><\/a><span data-color=\"transparent\"> different pricing models, price points, and messaging to see what works and optimize your pricing strategy.\u00a0<\/span><\/p>\n<figure style=\"width: 1875px\" class=\"wp-caption alignnone\"><img decoding=\"async\" src=\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/10\/dce85b13-3113-404b-85a8-3c0ccaae71e3.png\" alt=\"Result of an A\/B test conducted in Userpilot.\u00a0\" width=\"1875\" height=\"1511\" \/><figcaption class=\"wp-caption-text\">Result of an A\/B test.<\/figcaption><\/figure>\n<h2><strong><span data-color=\"transparent\">Conclusion<\/span><\/strong><\/h2>\n<p><span data-color=\"transparent\">Successful SaaS pricing goes beyond just putting numbers on your pricing page. It\u2019s more about deeply understanding your customers and creating a win-win situation where they derive value from your product and your bottom line grows.\u00a0Of course, achieving this balance is easier said than done. <\/span><\/p>\n<p><span data-color=\"transparent\">But regular experimentation and customer <a href=\"https:\/\/userpilot.com\/blog\/feedback-analysis\/\">feedback analysis can<\/a> help you determine the best SaaS pricing models for your brand. This is where Userpilot comes in. You can use our platform to deploy contextual <a href=\"https:\/\/userpilot.com\/blog\/customer-feedback-surveys\/\">customer feedback surveys<\/a>, track in-app behaviors, and conduct product experiments, all code-free. <\/span><a href=\"https:\/\/userpilot.com\/userpilot-demo\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\">Book a demo<\/span><\/a><span data-color=\"transparent\"> today to begin!<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>SaaS pricing models: which one is right for you? Find the answer in this in-depth guide with pros and cons plus examples of the most used pricing models.<\/p>\n","protected":false},"author":64,"featured_media":252730,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","inline_featured_image":false,"footnotes":""},"categories":[82],"tags":[143,85,577,299,548],"class_list":["post-10689","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-growth","tag-product-marketing","tag-saas","tag-saas-growth-strategies","tag-saas-marketing","tag-saas-product-marketing"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.2 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>The In-Depth Guide to SaaS Pricing Models and Strategies [Examples Included]<\/title>\n<meta name=\"description\" content=\"SaaS pricing models: which one is right for you? 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