Pricing Strategies for SaaS Success: Insights from the SaaS Stories Podcast with Bill Wilson
Getting pricing right can mean the difference between scaling successfully or stagnating in a competitive market. During a recent episode of SaaS Stories, Bill Wilson, founder of Pace Pricing, shared invaluable insights on SaaS pricing strategies, the evolution of subscription models, and the future of monetisation in the industry. With over 25 years in software and extensive experience coaching over 400 SaaS founders, Bill's expertise sheds light on one of the most complex challenges for SaaS companies today: pricing.
Here’s a breakdown of the key takeaways from the episode, alongside actionable advice and industry stats to help SaaS companies rethink their pricing strategies.
Why SaaS Pricing Needs a Fresh Perspective
Pricing is often seen as a “set it and forget it” aspect of business. Yet, research shows that small changes to pricing can have a massive impact on profitability. According to a study by McKinsey, a 1% improvement in pricing can yield an 11% increase in profits, making it the most effective lever for revenue growth.
Bill Wilson argues that SaaS companies too often focus on what to charge rather than how to charge. Many fall into the trap of following industry norms—such as flat subscription models—without considering how their customers derive value. Instead, SaaS companies need to rethink pricing as a dynamic strategy that evolves with customer needs and market conditions.
The Case for Transparent Pricing
One major frustration for buyers, as noted in the podcast, is the lack of transparency on SaaS pricing pages. A study by Gartner revealed that 55% of SaaS buyers prefer to see at least a starting price before contacting sales. Transparent pricing builds trust, shortens sales cycles, and helps customers calculate potential ROI.
For companies hesitant to reveal exact prices, Wilson suggests starting small:
1. Publish Pricing Models: Share how you structure pricing (e.g., per user, per transaction).
2. Provide a Starting Point: List a baseline price to give prospects a sense of scale.
3. Gradual Transparency: Over time, work toward publishing comprehensive pricing information.
Listen to the Full Podcast Episode
For more insights on SaaS pricing strategies, listen to the full episode of SaaS Stories with Bill Wilson below:
How SaaS Companies Can Use Pricing to Scale
Pricing isn’t just a way to capture revenue; it can also drive growth. Wilson introduces the concept of pricing-led growth—leveraging thoughtful monetisation strategies to scale effectively.
Here’s how SaaS companies can use pricing as a growth lever:
Focus on Value Metrics: Align pricing with the value customers derive from your product. For example, Dropbox charges based on storage used, while Miro charges based on the number of boards created. This ensures customers see a direct connection between usage and cost.
Incorporate Hybrid Models: Hybrid models—combining subscription, usage, and outcome-based elements—allow companies to capture value across diverse customer segments.
Optimise Net Revenue Retention (NRR): Pricing can help increase NRR by encouraging customers to upgrade within their existing plans. Usage-based elements, such as charging for additional transactions or features, provide pathways for customers to expand their spend without switching plans.
Top Mistakes SaaS Companies Make with Pricing
1. Not Updating Pricing Regularly
Wilson notes that many SaaS companies fail to adjust their pricing as they scale. Inflation, rising operational costs, and new features all justify incremental price increases. According to ProfitWell, SaaS companies that adjust their pricing annually grow at nearly double the rate of those that don’t.
2. Overusing Discounts
Offering predictable discounts (e.g., end-of-quarter promotions) trains customers to wait for deals, ultimately eroding revenue. Instead, Wilson advises establishing a clear discount policy and using incentives strategically to close deals.
3. Poor Customer Communication
When overhauling pricing models, clear communication is critical. For example, Canva faced backlash after introducing usage-based pricing that significantly increased costs for some customers. Wilson emphasises the importance of segmenting customers by impact and rolling out changes gradually to minimise churn.
Best Practices for Overhauling Pricing Models
For SaaS companies considering a pricing overhaul, Wilson recommends a phased approach:
1. Segment Customers: Analyse customers by tenure, current spend, and potential impact of the pricing change.
2. Communicate Early and Often: Explain the reasons for the change and highlight the additional value being delivered.
3. Offer Transition Plans: For legacy customers, introduce gradual price increases or discounts to ease the transition.
4. Test Before Rolling Out: Pilot changes with a small group to refine your approach before a full rollout.
In a recent case study, Wilson helped a SaaS company introduce appointment limits for the first time. By segmenting customers and rolling out changes incrementally, the company transitioned 100% of its customer base to the new pricing model with minimal churn
Final Thoughts: The Power of Pricing
Pricing isn’t just a mechanism for generating revenue—it’s a strategic tool for growth, customer retention, and market differentiation. By focusing on how customers derive value, embracing
As Bill Wilson says, “Product is pricing, and pricing is product. The two cannot be separated.” If you’re not constantly evaluating your pricing strategy, you’re leaving growth opportunities on the table.
