How to Measure and Improve SaaS Willingness to Pay (WTP)

To know the greatest amount a new customer is willing to pay for your products, measure and analyze their Willingness to Pay (WTP). This metric, which calculates the highest price a customer is willing to spend, is key because relying on a feeling or simple cost-plus formulas leaves potential revenue on the table. SaaS companies that use WTP research may find a difference of 10-15% in revenue growth compared to their peers not conducting any analysis. 

This guide outlines the best practices on willingness to pay strategies for your B2B SaaS product and the implementation steps that influence pricing decisions and affect profit and growth.

Precise pricing starts with a foundational understanding of your market: specifically, who is buying your solution and hoe they benefit from it. Before researching, it is important to articulate your primary klantsegmenten and determine the metrics that best represent the value you deliver. This step seeks to ensure WTP research is focused and pertinent to the various businesses you serve, potentially informing a Waardegebaseerde prijsstelling model.

Identify 3-5 primary customer segments (e.g., SMBs in Healthcare, Mid-Market E-commerce, Enterprise Financial Services). Establish their specific pain points and the tangible value (e.g., time saved, revenue generated, risk reduced) your product delivers to each.

Choose a value metric that aligns your pricing with the customer’s value gain. This metric should scale with the customer’s size or usage. Examples include:

• • Per User/Seat: Common but often arbitrary (e.g., Slack).
  • Per Usage/Consumption: Aligns cost with value (e.g., Stripe, Twilio, charging per transaction or API call).
  • Per Value Created: Based on a core asset (e.g., per managed server, per marketing lead).

Determine if your current prijsmodel aligns your costs with the customer’s value. If you focus on alignment with your costs, it’s safer when costs are high and unpredictable. Prioritizing customer value alignment usually leads to easier sales. Also, confirm that your chosen segments are distinct in their needs and potential WTP.

Once you have defined your segments, employ a process of research methodologies to quantify their price tolerance without asking direct, leading questions. Shopper responses regarding price during direct inquiries sometimes differ from their actual spending willingness.

Use structured indirect methods, such as the Van Westendorp or Conjoint Analysis, that will objectively reveal genuine price sensitivity and define a pricing range that makes sense and increases revenue across different product feature sets.

Send out a survey across your target segments (aim for $\approx 100-200$ responses per segment for statistical relevance) to run a Van Westendorp Price Sensitivity Analysis. Ask four strategic questions:

1. 1. At what price would you consider the product too expensive (you would not buy)? (POOR VALUE)
   2. At what price would you consider the product expensive but still worth considering? (MARGINAL VALUE)
   3. At what price would you consider the product a bargain? (GOOD VALUE)
   4. At what price would you consider the product too cheap to trust its quality? (BAD QUALITY)

Plot the cumulative frequency curves for each question. The optimal price range typically falls between the Point of Marginal Indifference (where ‘too cheap’ and ‘expensive but still worth it’ curves cross) and the Optimal Price Point (where ‘too expensive’ and ‘bargain’ curves cross).

For SaaS with high features, conduct Conjoint Analysis. Offer respondents sets of hypothetical product packages, each with different feature combinations and price points, and ask them which is their preferred package. The results of the statistical analysis identifies the utility (value) a customer places on each feature and the overall price sensitivity.

A Salesforce study using conjoint analysis reported an 18% increase in average contract value (ACV) potentially attributed to feature valuation.

Survey data will give helpful predictive insights into willingness to pay, but the most reliable insight comes from observing actual purchase behavior in a real-life setting. This strategy, known as revealed preference analysis, runs controlled market experiments where buyers are given various price points or offerings.

By measuring conversion rates and sign-ups under different conditions, you can confirm whether the price points identified in your research (Step 2) hold true when money is on the line, lowering the risk of setting an incorrect price upon launch.

For a pre-MVP offering use a Fake Door Test. Develop a straightforward landing page and a “Plans & Pricing” page. Present the plan with the target WTP price from Step 2. When a shopper clicks “Buy” or “Sign Up,” point them to a page that states, “We’re launching soon! Enter your email to be notified.”

The conversion rate from page view to email submission at a specific price point is a relevant indication of purchase intent and willingness to pay validation. Buffer famously used this method before building their first app.

With an existing product, run a segmented A/B Test Live Pricing. For a fixed period (e.g., 30 days), show two similar customer segments different price points for the same plan.

Compare the Conversieratio vs. Gemiddelde omzet per gebruiker (ARPU). A higher price point with a slightly lower conversion rate can still result in higher total revenue.

The final results of your WTP analysis is not just a number, but a strategy for packaging and differentiating your product tiers. The Pricing strategy involves structuring your plans so that the jump in price between tiers is justified by a corresponding and measurable jump in value for the targeted customer segment.

This structure, using price fencing, may limit some customers’ access to features, while enterprise buyers receive features, such as security and support, that line up with their willingness to pay.

Design tiers (e.g., Basic, Pro, Enterprise) where the higher price coincides with a clear, increase in value for that segment. This is called Value-Based Packaging.

It may be advantageous to evaluate the placement of basic features relative to the Enterprise tier. Instead, implement features essential for large companies, such as SAML/SSO, Dedicated Account Manager, of Advanced API Access in premium tiers.

Creëer Strategic Price Fencing—logical boundaries between plans based on WTP differences. For example, based on WTP research, you know Enterprise customers value support more.

Consider offering premium 24/7 support exclusively on the Enterprise plan, aligning with the potentially higher willingness-to-pay (WTP) indicated by some customers.

The process of pricing your product is not static; WTP is a dynamic metric that changes as your product matures, your competitors evolve, and customer expectations shift. Therefore, it is essential to implement robust tracking mechanisms to constantly monitor key performance indicators (KPIs) against your defined price points.

Beyond monitoring, proactively investing in actions that increase perceived value—such as improved quality and clearer communication—will naturally boost the maximum price customers are willing to pay, securing sustained growth and profitability.

Track the following rates by pricing plan:

• • afhaakpercentage: If you notice high churn on a specific plan (let’s say Pro Plan) it may indicate the price-value ratio is too low, suggesting the WTP was overestimated for this segment.
  • Customer Lifetime Value (LTV): Compare the LTV for different segments. If the LTV for your SMB segment is low, you might need to lower the price or increase perceived value to reduce churn.
  • Net Promoter Score (NPS)/CSAT: If users on a higher-priced plan have a low NPS, their perceived value has dropped, and their future WTP (for renewal) will decrease.

To wrap it up, for increasing WTP:

• • Enhance product quality. Fixing bugs and improving reliability directly increases perceived value.
  • Communicate value. Be certain your marketing collateral and in-app microcopy clearly articulate the ROI your product provides. Use phrases like “our tool reduces customer support tickets by $30\%$,” rather than by just listing features.