How to create your SaaS pricing strategy for 2026

Like all businesses, SaaS startups need incoming cash flow to operate sustainably. A good SaaS product pricing strategy plays an important role here: pricing defines profit for your product and services, and portrays value to your target market.

It’s easy to underestimate the importance of nailing your pricing—but this mistake can be fatal. Charge too much, and you’ll throttle your chances of finding customers, but charge too little, and you’ll struggle to deliver the quality of service necessary to retain them. 

What’s more, it’s not a case of just picking a reasonable figure—there are dozens of ways to approach how you charge for a SaaS product. Should you go for a freemium model or a flat monthly fee? Usage-based or seat-based pricing? What about add-ons?

There’s a whole web of variables to consider connected to your pricing strategy, so taking the time to research, iterate, and refine your approach (literally) pays off. Here’s how to do that using market best practices and data from your own customers.

Key insights

• Pricing is a big growth lever: do not improvise it

• Stop focusing exclusively on acquisition—switch your attention to monetization and retention

• Get to know your (current and potential) customers via surveys and interviews

• Use a Price Sensitivity Meter to uncover your optimal price bands

• Once you’ve got a hypothesis for your first pricing points, test them 

What is a SaaS pricing strategy? 

A SaaS pricing strategy is a revenue generation model a company uses to charge for their SaaS product. In the days before cloud computing, software was typically bought outright, like any other physical product. Then, in 1999, the CRM tool Salesforce made history by becoming the first company to charge for their services on a subscription basis (according to Saas industry lore, they threw a themed ball and announced it was “the end of software”). The move proved lucrative—and in the following couple of decades, most software companies transitioned to selling their services by subscription. 

There’s no consensus on the best SaaS pricing strategy, partly, therefore because this practice is only 2 or 3 decades old. And, partly because as soon as you move away from a one-off fee, there are a lot of moving parts to consider.  

This said, most SaaS pricing strategies use some combination of 5 basic approaches, which are

• Flat-rate subscription pricing: customers pay a monthly or annual subscription fee, where the annual comes with a discount 

• Tiered subscription pricing: where customers can choose from different tiers of subscription, with increasing prices and features—this is what we use at Contentsquare

• Usage-based pricing: where customers pay for what they use. For example, if you have a generative AI product, you might charge per token; if you’re an SMS messaging platform, you might charge per message. 

• Per-seat pricing: where customers purchase an account with a tool, then pay again to add extra seats, AKA users

• Freeminum: a free software with additional features users can unlock by purchasing a  subscription 

Given the variety of options available, it’s wise to experiment with changing what you charge customers and on what terms. However, SaaS founders can be reluctant to do so. In fact, the average SaaS company spends shockingly little time thinking about their pricing, overlooking the importance of this vital growth lever.

Read on for some advice on pricing your product judiciously to avoid this mistake yourself.

3 top tips for nailing your SaaS pricing strategy 

There are many variables to consider when deciding what to charge for your SaaS product, so we’ve boiled it down to 3 overarching pieces of advice.

1. Involve users in your pricing process

When deciding on your pricing—as with so many steps of building a successful SaaS startup—you should let your users be your guide. 

Surveys are a very effective and relatively fast way to obtain information, but you need to be smart and intentional about the questions you ask. Ask customers (or people in your target demographic) questions that offer behavioral insights, like 

• How do you use our product/service?

• What problem is our product/service solving for you?

• What feature(s) do you find most important?

• What would persuade you to use our product more often?

• What's the one thing our product is missing?

These offer a picture of how valuable your tool is for users—whether it’s mission-critical, whether it makes or saves them money, and how difficult it would be for them to replace. 

After this contextual research, get customers involved more explicitly by asking range survey questions to discover their ‘price sensitivity’. This model is known as the Price Sensitivity Meter (PSM) and is based on 4 questions that let you derive the different thresholds of your customers’ willingness to pay for your new product/service.

Ask customers these 4 questions to determine price sensitivity:

1. At what price would you consider the product to be so expensive that you wouldn’t consider buying it? (Too expensive)

2. At what price would you consider the product to be priced so low that you’d feel the quality couldn’t possibly be good? (Too cheap)

3. At what price would you consider the product starting to get expensive, so that it is not out of the question, but you’d have to give some thought to buying it? (Expensive/High Side)

4. At what price would you consider the product a bargain—a great buy for the money? (Cheap/Good Value)

Once you have a data sample that’s highly representative of your whole customer population, plotting the answers onto a graph will help you visualize an optimal price band. 

After the survey has run to completion, you can always follow up with customers using the in-person interview formats we covered in the chapters on positioning and product-market fit.

Pro tip: with Contentsquare, it only takes a couple of minutes to create a price sensitivity survey and launch it to exactly the right people. Here’s how:

1. Simply enter the goals for your survey into our AI for Surveys tool, and it’ll automatically generate effective questions 

2. Then, easily embed it on your product or site in whichever of our 6 embed formats best suits your UX

3. Next, tweak the user attributes settings so that your survey only appears to relevant users—for example, people in your target demographic, or those who have already spent more than an hour using your product. This ensures that any opinions you collect on your pricing strategy are from the kind of people you want to buy your product. 

4. Once you’ve run the survey, Contentsquare turns the responses to closed-ended questions into data visualizations. If someone has left a particularly helpful response to an open-ended question, invite them to an interview in just one click—Contentsquare’s Interviews tool is fully integrated with the experience. 

Why not get started now? Launch up to 3 surveys for free with Contentsquare’s free tier.

Invite survey respondents to meet you 1-on-1 so you can understand the reason behind their opinions on your pricing strategy

2. Re-think acquisition: shift your focus to monetization and retention

When thinking about SaaS pricing, the temptation is to focus primarily on customer acquisition—the moment of first conversion. A decade or so ago, this approach made sense—-starting a company was harder, but there were fewer competitors. Today, market saturation has made switching products easier, leading to a decline in the relative value of features and an increase in customer acquisition cost (CAC). The scenarios couldn’t be more different, yet a lot of existing advice is still based on acquisition models from the past.

When you put too much focus on acquiring new customers, you neglect 2 other strategic pillars: making more money per customer (monetization) and keeping your customers around for a long time (retention). But to grow your SaaS business, improving monetization and retention has 2 to 4 times the impact of focusing solely on acquisition:

The relative impact of monetization, acquisition, and retention on the growth of the average SaaS business

SaaS companies that are primarily acquisition-focused invest their time, energy, and resources into bringing people on board, but miss the chance to strategize on how to keep them around. 

When planning your pricing strategy, go beyond thinking about the moment customers first click ‘subscribe’. Consider monetization—things like add-ons and opportunities to upsell—and retention—things like discounts for buying a longer-term subscription, grace periods for users who downgrade their plans, and reserving sticky features for higher-tier plans.  

3. Make an educated guess, then test it 

Whilst you should absolutely research the first iteration of your pricing strategy using surveys and interviews, oftentimes, people behave differently than they say they will. That means at some point, you’ll need to throw out a number (or, more likely, a set of numbers) and see how customers respond to them.

To do this:

• Start by looking around and checking your competitors to see if any useful patterns can be detected. Never replicate or copy their pricing model—just try to get some information about what’s going on in the space around your product, and use this input to start determining your own pricing.  

• Quantify the value your customers would get from your product using the data you gathered from your surveys and interviews. Then, pick a number that’s around 10% of that—use it as your median price point. This is known as the 10x rule: the rule that your customers should get 10x the value from your product as they pay for it. 

• Leverage psychological pricing tactics to present your initial figures. For example, you can use charm pricing (e.g., $29 instead of $30) to make a plan feel more affordable. Similarly, presenting a premium-priced tier next to a mid-tier plan can make the latter seem like a better deal.

Once you have a hypothesis for your version 1 pricing model, test it rigorously. Create a landing page with different pricing options and run A/B tests on things like using 3 tiers vs. 4 or 5, price increases, and feature bundling. You can also experiment with monthly vs. annual billing, highlighting a ‘best value’ plan, and testing discount strategies.

Track your conversion rate, churn, and customer lifetime value (CLV) to see how small changes to pricing affect your important metrics. 

Your customers and the market are always changing, so your pricing strategy will never be set in stone—but that means there’s almost always an opportunity for iterating it to be more profitable. 

Pro tip: an experience intelligence platform like Contentsquare helps you get a 360-degree understanding of how customers feel about your pricing. 

• Use Dashboards to track important metrics like your conversion rate, churn, and CLV—these will tell you at a very high level whether your customers are happy to pay for your product or not

• For behavioral insights, use Session Replay to watch video-style recordings of real user sessions and get an ‘over-the-shoulder’ perspective on what your customers pay attention to on your pricing page. If many of them hover their cursors over the higher tier package, before eventually settling on the medium tier, you might want to investigate whether the price point of your premium offer is too high. 

• To capture customer feedback in the moment, use Surveys to add a feedback widget to your pricing page. This unobtrusive clickable element allows users to quickly leave an opinion on what they see on the page—whether they like it, whether it makes sense to them, and what they would prefer to change. 

A simple Contentsquare feedback widget in action

Blog posts

• 6 Must-Reads on Pricing a Product, First Round

• SaaS Pricing: How To Set Prices For SaaS In 2025, Foundation Inc.,

• The Ultimate Guide to SaaS Pricing Models, Strategies & Psychological Hacks, Cobloom

• The Complete Guide to SaaS Pricing Strategy, Tomasz Tunguz 

Video and audio

• Everything you need to know about SaaS Pricing, Kyle Poyar 

• SaaS Pricing Strategies that Work: How to Design an Optimal Pricing Model, Kurt Smit 

• The 6 Components of a SaaS Pricing Model, Ulrik Lehrskov-Schmidt

• Pricing and Packaging for SaaS, Dan Balcauski

Books

• The Anatomy of SaaS Pricing Strategy, Price Intelligently

FAQs about SaaS startup pricing strategies