• 1 min read
Pricing Strategy for SaaS: Pick the Right Model
Usage-based, tiered, value-based, flat-rate — which pricing model fits your product and how to test it.
The 4 Pricing Models
1. Tiered (Most Common)
$29 / $99 / $299 per month. Simple, predictable, easy to sell.
Best for: SaaS with clear feature differentiation.
2. Usage-Based
Pay per API call, per seat, per compute.
Best for: Infrastructure, API-first products.
3. Value-Based
Price based on customer outcome. E.g., % of revenue saved.
Best for: Enterprise, high-ROI products.
4. Flat Rate
One price, everything included.
Best for: Simple tools, early stage.
How to Test Pricing
- Survey 20 existing customers: “What would you pay?”
- A/B test pricing page: two price points
- Measure: conversion rate, revenue per customer, churn
Common Mistakes
- Pricing too low (hardest to fix)
- Too many tiers (analysis paralysis)
- Hiding price (hurts trust)
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