Most pricing conversations I walk into start in the wrong place. Someone has a spreadsheet of competitor prices, someone else has a cost model, and the debate quickly narrows to whether the plan should be $129 or $139. It feels rigorous. It is usually the least important decision in the room.
Across fifteen years of B2B SaaS, in EdTech, FinTech and now AI, and in the pricing and packaging work I do for consulting clients, the same lesson keeps returning: price is a positioning decision first and a financial decision second. Get the positioning right and the number follows. Get it wrong and no amount of spreadsheet precision will save you.
Find the order of magnitude first
Patrick Campbell, founder of ProfitWell, put it plainly in Stripe’s founder guide to pricing: work out whether you are a $10, $100 or $1,000 product before you debate $500 versus $505. That framing has saved me hours of circular meetings.
To find the bracket, I weigh three vectors and give each a clear job:
- Competition sets the band. Not just direct rivals, but the real alternative: a spreadsheet, an intern, an incumbent system, or doing nothing at all.
- Cost sets the floor. For most software the marginal cost is low, so this matters most when usage scales sharply or you are tempted by unlimited plans.
- Value sets the ceiling. If your product saves or earns a customer real money, the common rule of thumb is that you can capture roughly 5 to 15% of that value.
The trap is letting competition do the job of value. Investors flag competitor-led pricing as a red flag for good reason: it tells them the team has not quantified what the product is worth to the buyer.
A price is a signal before it is a number
A B2B SaaS client I am currently advising had set their price at $99 a month. The product had matured considerably, but the price still described an early, lightweight tool. Prospects were reading the number before they read the feature list, and the number was telling them the wrong story.
We moved the plan to $149, a 51% increase. Competitor pricing told us where the band sat; it did not make the decision. The decision rested on two things: the value the product now delivers, and the signal a sub-market price sends to a serious buyer. A price below the band does not read as generous. It reads as unfinished.
A price below the market does not read as generous. It reads as unfinished.
This is the part founders underestimate. Tomasz Tunguz of Theory Ventures has observed startups that struggled to win customers at a free or very low price, then found buyers once the price rose, because a higher price made the product look more trustworthy and more likely to last. Price is the most concentrated piece of positioning you own.
Package for the buyer, not the feature list
Bill Bedsworth, Head of Pricing at Stripe, reduces packaging to one question: who is this for? If you cannot answer that for every tier, you are not packaging, you are arranging features.
My own proof point came earlier in my career at Cohort Go, where we lifted insurance revenue 20% through sharper segmentation and messaging. Nothing about the underlying product changed. What changed was that each segment could finally see the offer built for it. Packaging works the same way: it is segmentation made purchasable.
A few rules I apply to every packaging brief:
- Two to four tiers, each mapped to a real customer type, with names that describe the buyer rather than the feature count.
- A value metric the customer recognises. It should grow with the value they get, be easy to predict, be hard to game, and match how the buyer budgets.
- Scale tiers by quantity before you gate by feature. Obviously AI found that paywalling features killed the enthusiasm that sells a product; tiers that unlocked more of the same value kept users moving up.
- Resist optionality. Complexity often hides behind the word “flexible”. Buyers spend far less time on your pricing page than you do, and they want to be told what good looks like.
A platform transition is a pricing event
When I led the migration of more than 4,000 education agents from Cohort Go to Flywire’s new portal, the hardest part was not the technology. It was trust. A migration is a churn event you schedule yourself, and every customer quietly asks the same question: what does this cost me?
That question gets sharper when the commercial model changes alongside the product. Across enterprise software, established platforms are shifting from one-off projects, licences and maintenance contracts towards modular, recurring subscriptions, usually hosted in the cloud. For customers who have run the old version for years, that is two changes at once: a new product and a new way of paying for it. Both need to be designed, not left to the renewal conversation.
Three things matter most when pricing that shift for an established customer base:
- Predictability beats flexibility. Larger buyers plan around annual budget cycles. Entitlement-based subscriptions, renewed each financial year, fit how they buy far better than pure pay-as-you-go.
- Total cost of ownership is the real objection. Integration, retraining and operational risk sit on top of the subscription. The new platform has to be a step change, not a marginal gain, and the transition costs need to be named openly rather than buried.
- Separate the transition from the subscription. A one-off transition fee plus a clean recurring price is easier to approve and easier to compare than a blended number that hides both.
Get the packaging right and the migration becomes an upgrade the customer chooses. Get it wrong and it becomes a procurement review.
Measure the price after you set it
A price is a hypothesis until the market responds. After any change I track a short list:
- Conversion at the new price against the old baseline.
- Churn by plan, which shows where a tier is under-delivering.
- Plan distribution. If most customers sit on the lowest tier, the upgrade triggers or the tier prices need work.
- Expansion revenue and time to upgrade, which show whether the ladder actually pulls customers up.
- Price objections in sales calls and win/loss notes.
And one counterintuitive test, from Morgane Zerath at Crane Venture Partners: if nobody is commenting on your price, you are probably not charging enough.
Price is the most concentrated piece of positioning you own.
What transfers
Decide the bracket, then the number
Competition sets the band, value sets the decision, cost sets the floor.
Treat price as positioning
The number is the first claim a buyer reads about your product, so make sure it says what you mean.
Price the transition, not just the product
When customers move platforms, design the upgrade path, name the switching costs and measure adoption, not just migration.
Pricing is never finished. Markets move, customers change, and the product grows into new value. The teams that win treat pricing as a living part of their positioning, revisited deliberately, rather than a number someone chose once and nobody dared to touch.
- Stripe, How to build an effective pricing strategy (Pricing Guide for B2B SaaS Founders)
- Stripe, SaaS pricing and packaging strategy