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.
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?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 signalBenchmark 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 cheapModel 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 upCheck your price now
Enter your proposed price in the calculator and see if your LTV:CAC ratio clears 3:1. Takes 60 seconds.
Calculate my unit economics →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 / segment | Typical monthly price | ACV range | Notes |
|---|---|---|---|
| Consumer / B2C | $5–25/mo | $60–300 | Low ACV requires high volume; hard to make unit economics work without PLG |
| SMB (1–50 employees) | $29–149/mo | $350–1,800 | Sweet spot for self-serve SaaS. Annual plans critical for LTV |
| Mid-market (50–500 employees) | $200–1,500/mo | $2,400–18,000 | Room 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/unit | Varies widely | Land-and-expand; start free, grow with usage |
| Vertical SaaS (niche) | $99–999/mo flat | $1,200–12,000 | Niche pricing power; customers pay premium for category fit |
FAQ