SaaS Pricing Strategies to Boost Customer Satisfaction

During my career I helped price 10+ SaaS products that have generated over $3B in revenues. Recently my CEO Adam Robinson and I discussed how to price our new B2B product. Here's a breakdown of our thinking: BACKGROUND: We are launching a new identity-resolution product that is arguably superior to other substitutes in the market. The market we operate in has organized itself into two tiers: High and lower priced solutions. Here’s a pricing wisdom that I have developed over time : 1. If you want to increase revenue incrementally, increase price  2. If you want to increase revenue exponentially, decrease price 3. If you want to dominate your space, give it away for free and charge later When pricing, it’s important to understand your motivation:   - Are you trying to capture more revenues? - Are you trying to compete more effectively? - Do you want to switch market segment or increase TAM? - Do you want to comfortably win or completely dominate the space? Once there’s clarity, it becomes easy to use pricing as a lever to navigate the business towards the desired outcome. We are fortunate to have a profitable business that’s generating $22M+ in ARR. This allows us to go slow on monetization. From our initial discussions, it was clear we needed to optimize our pricing and GTM for rapid market adoption and not short term revenues. Largest growth always happens at the latter end of the curve, but for that we need to have a bulk of the market already using us. We will try and get 250K+ domains (including free signups) in the next 2 years.  Once we decided we wanted to go freemium, it made sense to double down on self serve motion. This also gave us some direction to the kind of GTM team we want to build. We also knew backend data costs had to be fixed with zero marginal cost to support freemium pricing. To increase our likelihood of capturing a significant TAM, it only makes sense to decrease all friction to adoption - including pricing. Most of the competitors are charging on traffic volume. To change the game, we took volume out of the picture. Given we can provide this solution at no marginal cost, we will resolve unlimited traffic (fair usage) for the same price. We are instead charging on integrations. The lowest priced plan requires users to work with excel files. Whereas the other more expensive solutions provide additional integrations. We think disruption happens at the low end of an established market. So we have a laser sharp focus at the SMB/lower MM users to drive our signup numbers. We ended up with: Plan 1: Perpetually Free, but no download Plan 2: $295/mo, csv download, slack integration Plan 3: $495/mo, Sales Integrations Plan 4: $995/mo, Sales + Marketing Integrations (no annual deals, only M2M) Remember: Pricing is an iterative exercise. We will watch the impact of our initial assumptions and recalibrate.

I keep seeing the same pattern destroy SaaS companies: AI makes their customers insanely productive. Those customers need 80% fewer seats. Revenue falls off a cliff. The pricing model is literally eating itself. I've executed pricing transformations across 4 SaaS turnarounds. What worked 18 months ago now destroys value - every SaaS company is racing to embed AI, and it's breaking their revenue models. The automation paradox: AI makes customers wildly productive, so they need fewer seats. You just automated away your own revenue model. 85% of SaaS companies have abandoned pure per-seat pricing. The holdouts are learning why the hard way. Here's what actually works now: Track different data. Old way: Seats, tiers, revenue per account. New way: Token consumption, API calls, automated workflows. Found one enterprise using AI to replace 10 seats while consuming 100x the resources. Seat pricing misses this completely. Price outcomes, not access. Old way: ROI = human hours saved. New way: Automated resolutions, workflows completed. Saw $500/month AI running entire departments. Customer saves $2M annually. Your pricing is broken. Build hybrid models. Old way: Per-seat with usage tiers. New way: Base subscription + AI consumption. Example: $X base platform fee + $Y per 1,000 AI resolutions. Revenue jumps 3x. Churn drops. Value finally makes sense. Model the seat apocalypse. Old way: 20% churn assumptions. New way: Accounts dropping from 50 to 10 seats but 10x-ing AI usage. Price it right = 2x revenue. Miss it = -60%. Prove value first. Old way: Show features, hope they get it. New way: "Our AI resolves 1,000 tickets = 40 human hours." Now $2/resolution pricing clicks. Without proof, you're just taxing AI. CS becomes AI coaches. Script: "You're paying for 50 seats but AI handles 30 of those workflows. Let's optimize." Fewer seats, higher revenue. Trust wins. Real-time transparency. Token usage dashboards. Cost predictions. 80% alerts. Show exactly what AI costs vs human alternative. Black box pricing = dead company. Most SaaS companies still add 50% "AI premiums" to seat licenses. Meanwhile, Salesforce charges per conversation. Zendesk per ticket resolved. The leaders already moved. But the window's closing. Companies with consumption-based AI models report 38% higher growth. Foundation models commoditize by 2030. We have maybe 24 months. After that, it's a race to the bottom. The fundamentals from my 4 turnarounds still apply - but the game has changed. We used to price software that helped humans work. Now we're pricing software that replaces them. Get this transition wrong and you'll watch competitors eat your market share. Get it right and you own the next decade.

One lesson has stuck with me throughout my CX career: sustainable growth comes from aligning our success with our customers’ outcomes. That principle shaped how we built Maven. We don’t charge by seat. We charge by success. If our AI resolves more tickets, speeds up resolutions, or lifts CSAT, we share in the value we create. No results mean no value exchange. This is outcome pricing. It pushes us to measure what matters and to build products that deliver real results. Is it harder? Hell yes. It requires precise attribution, strong data infrastructure, and the humility to share risk. But it’s the right thing to do. BCG found that outcome-based models can drive up to 20 percent higher retention. That’s the payoff. Yet many legacy SaaS vendors are still trying to bolt usage-based pricing onto outcome-driven promises. We chose a different path. When you’re building for the future, you can’t afford to borrow from the past.

AI's Buy & Sell Side Impacts: Crafting Smarter Pricing Strategies with AI Many SaaS companies charge based on the number of user seats. More users meant more revenue, simple. However, as AI and automation become more integrated into SaaS products, we're seeing interesting shifts in how people use these tools. With AI and automation enhancing SaaS products, the number of users may decrease for certain tasks. However, the AI capabilities allow the remaining users to be far more productive and gain significantly more value from the software. By using AI-powered tools, these users can accomplish much more. So, if you find yourself in this situation, how do you price your services to match the greater value that AI brings? The SaaS world is at a turning point. The old per-seat pricing model may not quite fit the nuanced value that some AI-powered solutions now offer. As automation changes how tasks get done and AI deepens user engagement, we need to rethink how we price our products to meet our business goals. The table below shows some options: per-seat, hybrid models, and usage-based pricing. Some considerations in changing pricing: 1) Align with real value - Make sure your pricing matches the actual value users get and perceive. 2) Adapt to new usage - As AI transforms workflows, pricing should adapt to how people use your platform differently. 3) Stay competitive - Flexibility and perceived value are crucial. Don't get left behind. 4) Meet diverse needs - Cater to a wider range of user preferences and requirements. 5) Encourage behaviors - Use pricing to incentivize desirable user engagement. 6) Hit financial goals - Balance user value with revenue growth and stability. AI isn't just changing SaaS products; it's giving us powerful tools to help us make decisions. You can leverage AI for research, data analysis, what-if scenario planning, and collaboration to inform pricing strategy. If you haven't explored this, now's the time. What are your thoughts? Feel free to DM if you want to collaborate on this. #PricingStrategy #SaaS #AIUseCase #AIAnalytics #ChatGPT GrowthPath Partners