Pricing Is Your Most Important Business Decision

SaaS pricing directly impacts revenue, customer acquisition, retention, and market positioning. Yet many companies set prices based on gut feeling or competitor copying rather than systematic analysis. At Nexis Limited, we have iterated on pricing across four SaaS products — Bondorix, Ultimate HRM, Digital Menu, and Digital School — learning what works through real-world experimentation.

Common Pricing Models

Per-User Pricing

Charge per user per month ($10/user/month). Simple to understand and predictable for customers. Revenue scales with adoption within each customer organization. This is the most common SaaS pricing model and works well for productivity tools and collaboration software. Our Ultimate HRM uses per-user pricing.

Tier-Based Pricing

Offer 3-4 plans (Starter, Professional, Enterprise) with increasing features and limits. Each tier targets a different customer segment — solopreneurs, growing businesses, and large organizations. The middle tier should be the one you want most customers to choose.

Usage-Based Pricing

Charge based on consumption — API calls, storage, transactions, or events. Revenue scales with customer usage. This model aligns incentives — customers pay more as they get more value. Metered billing requires reliable usage tracking and clear pricing communication.

Flat-Rate Pricing

One price for unlimited access. Simplest for customers to understand but may leave money on the table with high-value customers and may be too expensive for small ones.

Pricing Strategy Design

Value-Based Pricing

Price based on the value your product delivers, not based on your costs or competitor prices. If your HR software saves a company $50,000/year in reduced administrative time, charging $5,000/year is a clear value proposition. Understand the economic impact of your product on the customer's business.

Tier Differentiation

Differentiate tiers based on features that correlate with willingness to pay:

  • Limits: Number of users, projects, storage, or API calls.
  • Features: Advanced reporting, integrations, SSO, custom branding.
  • Support: Email support → priority support → dedicated account manager.
  • SLAs: Standard uptime → enhanced SLA → custom SLA.

Free Trials vs Freemium

  • Free trial: Full product access for a limited time (14-30 days). Forces a decision. Works well for products with clear value that is demonstrable quickly.
  • Freemium: Limited free tier with paid upgrades. Builds a large user base but requires careful tier design to convert free users. Works well for products with strong network effects or viral distribution.

Pricing Page Design

  • Show 3-4 plans — fewer than 3 limits options, more than 4 creates confusion.
  • Highlight the recommended plan visually.
  • Show annual pricing with the monthly option available — annual plans improve cash flow and reduce churn.
  • List features using clear, benefit-oriented language.
  • Include a clear call-to-action on each plan.
  • Provide enterprise contact option for large customers with custom needs.

Common Pricing Mistakes

  • Pricing too low: Underpricing attracts price-sensitive customers and undervalues your product. It is easier to lower prices than raise them.
  • Too many tiers: More than 4 tiers creates decision paralysis.
  • Hidden costs: Surprising customers with additional fees damages trust. Be transparent about what is included.
  • Never changing prices: Review pricing annually. As your product improves, your pricing should reflect the increased value.

Conclusion

SaaS pricing is a continuous process, not a one-time decision. Start with a clear value hypothesis, test with real customers, and iterate based on conversion data and customer feedback. The right pricing model captures the value you create while making the purchase decision easy for customers.

Launching a SaaS product? Our team can help with product strategy and market positioning.