Pricing your first B2B SaaS product is a high-stakes challenge. Get it right, and you lay the groundwork for traction, growth, and investor interest. Get it wrong, and you risk confusion, missed revenue, or scaring off early adopters. Before diving into numbers, you need to build a solid pricing foundation. Here’s how.
Build Your Pricing Foundation
1. Understand the Job to Be Done
Before you price anything, know what job your customer is hiring your product to do. This concept, from Clayton Christensen’s Jobs to Be Done theory, ensures you’re solving a meaningful problem—and pricing against the right value.
2. Grasp the Pricing Triangle
The pricing triangle is classic MBA strategy. Consider the three elements:
- Your Costs
- Competitor Pricing
- Customer Value
While this triangle doesn’t provide the full picture for a new product, it’s an essential starting framework. For SaaS companies, your costs are likely diminimus unless hosting and other costs increases dramatically with each customer. Costs in this case are incremental costs per customer.
3. Know Your Market Maturity
Use Geoffrey Moore’s Crossing the Chasm model to determine whether you’re targeting early adopters or entering a mature market. Pricing strategies vary dramatically based on this.
With your pricing foundation established, you can now start to take into consideration these 11 elements. But before you move on, stress test your foundation against your management team and perhaps your investors to get everyone on the same page.
The 12 Key Considerations for Pricing a New SaaS Product
1. It’s More Art Than EBITDA
At the early stage, you’re not optimizing margins—you’re signaling value, proving product-market fit, and landing your first customers. Mature companies use spreadsheets. You use intuition and feedback ( and maybe a simple excel model for checking scale).
2. Your Initial Pricing Will Be Wrong
Don’t overinvest in complex bundles or tiered models. Instead, aim to get into the right pricing neighborhood—the right order of magnitude. Your first pricing attempt is likely wrong. You just don’t have enough information from customers nor do you have a built out product to drive maximum value. Keep pricing simple, as it will change.
3. Consider Investor Optics
Will investors be more impressed with high ACVs and a few customers, or lower ACVs with more traction? Your pricing should reflect the growth story you want to tell.
4. Define Your Expansion Model
Understand your long-term revenue strategy:
- Will you upsell new features over time?
- Expand across departments?
- Operate as a one-and-done deal?
This shapes your entry price point and overall pricing structure.
5. Price to Stay Below Known Approval Thresholds
For large enterprises, staying under $30K–$50K ACV helps you avoid lengthy executive approvals. Above this amount, you are likley on a VPs radar and maybe CFO. If you are doing a big ticket, enterprise model with enterprise reps, that might be fine. If you are trying to be high velocity, high logo count, your price point, no matter what the value could trigger complex approvals.
6. For Velocity Models, Keep It Frictionless
If you aim for many customers and fast sales cycles, publish your pricing and make it easy for reps (and customers) to quote and buy.
7. Deliver a 10X Mental ROI
Early adopters won’t do a formal ROI analysis, but they’ll run a quick mental check. If you charge $10K, they should immediately perceive $100K+ in value.
8. Set a Minimum Viable Price
What’s the absolute minimum you’re willing to accept for a deal? Your minimum price sends a signal as to the perceived size of company that is your customer.
9. Choose 1–2 Pricing Vectors
Once you’ve set a minimum price, add one or two variable factors—like users, usage, time or features—to scale your pricing. Keep it simple and easy to explain.
10. It’s Easier to Raise Prices Than Lower Them
Pricing too low early on might require you to raise prices later, which is manageable. Lowering them, however, signals weakness and can damage trust.
11. Pass the “Customer Dinner” Test
Imagine all your customers at dinner together. If they start discussing what they pay, will anyone feel burned or unfairly treated? Keep your early pricing fair and consistent to preserve long-term trust.
12. Eliminate Pricing as a Cause of Poor Product/Market Fit
If six months after the product launch, you are doubting product/market fit, set your initial pricing so that your attitude is “this is so cheap, everyone should buy it”. If they are not, you know you have a problem somewhere else in your value creation. Don’t waste six months of selling to then suspect your pricing is standing in your way.
Final Thoughts
Pricing your first SaaS product isn’t about perfection—it’s about direction. Start with a strong foundation, keep your model simple, and iterate as you learn. Integrity, clarity, and value perception will carry you further than over-optimized spreadsheets ever could.
Photo by Alex Kulikov on Unsplash
