pricing: definition
Building your price grid: tiers, thresholds, and billing logic. One of the fastest and most underused revenue levers in SaaS.
By Isidore Mikorey-Nilsson · June 21, 2026
Definition
Pricing covers how you charge for your product: amount, tiers, billing unit (per user, per usage, subscription-based), and what sets each plan apart. In SaaS, it's a growth lever in its own right, often neglected, because a well-thought-out price adjustment acts directly on MRR without any extra acquisition cost.
Why it matters
Pricing affects both what each customer brings in (so LTV) and how easy it is to convert: it's one of the few levers that improve revenue without spending an extra euro on acquisition. Most founders underprice out of fear, leaving value on the table.
When to use it
You revisit it regularly, starting from perceived value rather than production cost. In practice, you align your tiers with how your customers grow, so their bill naturally increases as they get more value from the product.
Example
Charging by number of active users, so a customer who rolls the tool out to their whole team pays more as they extract more value from it.
Common mistakes
- Pricing based on production cost rather than value.
- Underpricing out of fear of losing customers.
- Never revisiting it once set.
Don't confuse it with
- freemium: Freemium is one pricing choice among others (a free tier); pricing is the whole pricing logic.
Related terms
Articles that use this term
Frequently asked questions
- How often should you revisit your pricing?
- Regularly: pricing is never set in stone. Many SaaS companies adjust it once or twice a year as the product gains value.