SaaS Pricing
Pricing and packaging are among the most powerful levers of growth for Software as a Service (SaaS) companies.
Optimized pricing strategies drive uplift across all three SaaS growth dimensions: acquiring new customers; retaining existing customers; and driving account expansion.
And yet, while pricing has the potential to unlock such significant value, it is often a poorly understood and therefore under-managed activity across many organizations.
L.E.K. Consulting helps companies transform their pricing models, identifying actionable pricing recommendations, and helping our clients build the strong internal capabilities required to enact ongoing change.
Our approach
SaaS companies face a myriad of complex pricing questions:
- How can we optimize pricing and packaging to encourage new account acquisition?
- Is our price metric aligned with customer value? Should we consider value- or consumption-based pricing to grow ARR as customer usage increases?
- Are our price levels set appropriately? What does our current price level convey to our customers?
- How transparent should we be with our pricing? When should we publish prices online and encourage self-serve sales motions vs. guiding customers towards enterprise sales?
- Do we have the appropriate product on-ramps? Should we consider a free tier or a free trial?
- Do we have appropriate discounting governance that balances account acquisition with profitable ARR?
- Who should be involved in setting prices at our organization? What should be the interplay between product vs. sales vs. marketing vs. finance?
As such, there is no single silver bullet in B2B, B2C and DTC SaaS pricing toolkit that balances advanced quantitative techniques with in-depth voice-of-the-customer research to support clients with any pricing issue.
Rather than a theoretical exercise, L.E.K.’s pricing strategies and recommendations are designed to be actionable. An effective pricing strategy is never complete, but is a continuous process that requires ongoing refinement and optimization as markets and customers evolve. We help our clients build their internal pricing muscle so they have the capabilities and processes in place to react.
Our capabilities
L.E.K.’s capabilities span the full breadth of B2B, B2C and DTC SaaS pricing needs: from broad strategic studies that redefine company’s pricing and packaging models; to tactical assessments of price levels and freemium tiers; to operational support in building new price functions and redesigning pricing systems and processes.
