Estratégias de Precificação

What is SaaS Pricing Management?

Autor: Yura Luzhko

What is SaaS Pricing Management

What is SaaS pricing management?

SaaS pricing management involves the practices and activities employed by SaaS organizations regarding the determination, modification, and optimization of their subscription pricing plans.

 

SaaS pricing management aims to align the value offered to the customer and the fluctuations of the market to generate revenue for the SaaS business. This, however, is dependent on the understanding of the customer’s behavior regarding usage, patterns, and feature selection.

 

When done right, SaaS pricing management is likely to enhance customer acquisition and customer retention.

SaaS vs. traditional pricing: What's the difference?

The primary difference lies in the revenue model:

  • SaaS Pricing is generally based on the subscription model. Users pay for access to the tool over a longer period of time. It helps businesses to secure a consistent revenue stream. Additionally, SaaS pricing can be adjusted to fit customer and market requirements. 
  • Traditional pricing consists of one-time purchases of higher values, and it is difficult to change. Also, companies practicing this method tend to request additional payments for services like support.

What are common SaaS pricing models?

SaaS pricing models are of multiple types, coming to answer to different SaaS company requirements.

Pricing Straetgy

Descrição

Primary Pro

Primary Con

Assinatura

Regular payment for access (overarching model)

Predictable recurring revenue, customer flexibility

Risco de rotatividade if value is not consistently delivered

Tarifa Fixa

Single price for all features/services

Simple to understand and market

May not cater to diverse needs (leaving money on the table or deterring smaller clients)

em camadas

Multiple packages/levels with distinct feature sets

Caters to different customer segments with varying needs

Can be complex to design and confuse customers

Baseado em Uso

Customer pays based on consumption (e.g., API calls, data storage)

Appeals to customers with fluctuating needs (pay-for-what-you-use)

Unpredictable revenue, customer anxiety about costs

Por Usuário

Price based on the number of individual users

Straightforward for scaling with user growth

Might discourage collaboration/sharing within teams

Por Recurso

Price based on which specific features are unlocked

Increases perceived value, granular customization

Can result in feature silos and limit adoption of the full platform

Freemium

Basic version free, charging for premium features

Attracts a large user base, upselling opportunities

Needs a high conversion rate to paid plans to be sustainable

Key SaaS pricing metrics: How are they used?

SaaS pricing metrics are generally used SaaS metrics, which study revenue from different perspectives:

Métrica

Full Name

Uso principal

MRR

Receita Recorrente Mensal

Assess monthly financial stability and growth trajectory.

ARR

Receita Recorrente Anual

Long-term revenue forecasting and valuation.

CLV

Valor do Tempo de Vida do Cliente

Measure the total revenue expected from a single customer relationship.

NRR

Net Revenue Retention

Measure revenue growth (or loss) from the existing customer base over time (includes upsells/downsells/churn).

taxa de rotatividade

Rate of customer/revenue churn

Identify customer retention issues and assess stability.

CAC

Custo de Aquisição de Cliente

Assess the cost-effectiveness of sales and marketing efforts.

 

Observação:

Accurate calculation is vital, especially with usage-based or hybrid models, due to their inherent complexities.

How to choose the right pricing unit?

SaaS businesses need to decide on how they want to build their pricing.

This means looking at the key feature from which the pricing method will derive (per user, per usage, per feature). 

Once the SaaS company has settled on this aspect, the steps that follow are: 

  1. Perform an internal company analysis. This means understanding the product, its features and production costs. 
  2. Run a market research. Check your specific industry, competitors and your customers’ willingness to pay. 
  3. Select the pricing criteria. Everything that you have discovered when researching internally and externally, needs to be confirm that the feature on which you will set your pricing is the one that delivers value to users.
Dica de Especialista:

Do this pricing assessment for each region you plan to sell and try to adapt your strategy on our findings. 

How does market position impact SaaS pricing?

SaaS pricing can be impacted by market position. Here is how: 

  • Market leader: If your Saas company occupies a top position within your industry, premium pricing can be applied.
  • New entry: If your Saas product is new on the market, consider using penetration pricing, Freemium ou Preços em Camadas to gain more popularity.

Conclusão

SaaS pricing management looks at the entirety of the processes and elements involved in deciding on the appropriate price for your saaS product. Monetizing your offer needs to focus on multiple aspects, from studying the market and target customers to analyzing the production costs and profit expectations.

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