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How much to charge for your SaaS — a founder's framework

There's no universal answer — but there is a process. Here's how to find the right price using data instead of gut instinct, with benchmarks by stage, segment, and category.

The core problem

Why founders struggle to set a price

Pricing is the one business decision where most founders have the least data and the most fear. There's no obvious right answer, the stakes feel high, and the fear of pricing too high and losing deals is much more salient than the very real cost of pricing too low.

The result: most SaaS founders underprice by 30–50%. Not because they've done research and found competitive prices — but because they've anchored on their own cost structure, copied a competitor without knowing their unit economics, or simply picked a number that felt "safe."

The cost of underpricing compounds: A $10,000 first-year revenue product priced at $49/month instead of the optimal $99/month requires exactly twice as many customers to hit the same revenue. More customers = higher CAC, higher support costs, more churn events. The pricing error multiplies across every metric.

The process

A 4-step process for setting your price

The right price isn't found by guessing or copying — it's found by running a process. Here are the four steps in order.

STEP 01

Define your value metric

Before you set any price, identify the one thing that scales with your product's value. This becomes your unit of pricing. The value metric determines whether you charge per seat, per usage, per contact, per project, or as a flat rate. Getting this wrong means you'll reprice in 12–18 months.

Ask: what do customers maximise with my product?
STEP 02

Run a willingness-to-pay survey

Send the Van Westendorp 4-question survey to 20–30 target customers or prospects. Ask at what price the product feels too cheap, a bargain, expensive but acceptable, and too expensive. The intersection of responses gives you a defensible price range grounded in actual willingness to pay — not your own assumptions.

15–30 responses gives statistically useful signal
STEP 03

Benchmark against competitors — then add 20%

Research 3–5 direct competitors. Note their pricing, their tier structure, and their target segment. Then price 20% above the midpoint. Most founders benchmark down toward competitors; the right approach is to benchmark up. If your product is better or your positioning is differentiated, your price should reflect that.

If no one has pushed back on price, you're almost certainly too cheap
STEP 04

Model your unit economics at that price

Enter your proposed price into the calculator. Check your LTV:CAC ratio at that price — it should come in above 3:1 at your current CAC. If it doesn't, either the price is too low or your CAC is too high. The calculator gives you the answer in 60 seconds.

LTV:CAC below 3:1 at your target price = price needs to go up

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Benchmarks

SaaS price ranges by stage and segment

These are realistic price ranges for different company stages and buyer segments. They're starting points for your research — your specific category, value metric, and competitive positioning will shift these up or down.

Stage / segmentTypical monthly priceACV rangeNotes
Consumer / B2C$5–25/mo$60–300Low ACV requires high volume; hard to make unit economics work without PLG
SMB (1–50 employees)$29–149/mo$350–1,800Sweet spot for self-serve SaaS. Annual plans critical for LTV
Mid-market (50–500 employees)$200–1,500/mo$2,400–18,000Room for human sales assist. Volume discounts expected.
Enterprise (500+ employees)$2,000–20,000+/mo$24,000–240,000+Custom contracts, procurement cycles, security reviews
Developer / API (usage-based)$0.001–$0.10/unitVaries widelyLand-and-expand; start free, grow with usage
Vertical SaaS (niche)$99–999/mo flat$1,200–12,000Niche pricing power; customers pay premium for category fit

FAQ

Pricing questions answered

Only if you have a very specific growth strategy that requires low prices to acquire market share quickly. In most cases, starting low creates anchoring effects that make it painful to raise later, and attracts price-sensitive customers who churn faster. It's almost always better to start at the right price and offer a discount for early customers than to underprice from the start.
Four signals of underpricing: you're winning almost every deal without pricing objections; your LTV:CAC ratio is above 6:1 (you're leaving money on the table); customers in interviews say the product is "surprisingly affordable"; you've added significant product value but haven't changed your price in 12+ months. Any two of these signals together suggests you have meaningful room to raise.
Free trials work best for products where value is demonstrated quickly (under 30 minutes of use). Money-back guarantees work best for products with longer time-to-value. Both reduce purchase anxiety and improve conversion — the decision is about which friction you're trying to remove: the "I don't know if it works" friction (trial) or the "what if I'm wrong" friction (guarantee).

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