Revenue Models and Pricing in B2B SaaS: What Works?
At Find Your Audience, we know that choosing the right revenue models and pricing strategies in the B2B SaaS market can make or break a business. The landscape is complex, with various models and strategies to consider.
In this post, we’ll explore what works best for B2B SaaS companies. We’ll cover popular revenue models, effective pricing strategies, and key factors to consider when setting your prices.
Which Revenue Models Work Best for B2B SaaS?
In the B2B SaaS world, the right revenue model can significantly impact a company’s growth and success. Let’s explore some of the most effective revenue models in the B2B SaaS space.
Subscription-Based Model: The Backbone of B2B SaaS
The subscription-based model remains the top choice for B2B SaaS companies. Over 80% of businesses use at least one SaaS application in their operations. This model provides predictable recurring revenue, which simplifies forecasting and growth planning.

Companies typically offer subscriptions on monthly or annual terms, often with discounts for annual commitments. Salesforce, a leader in CRM software, offers a 20% discount for annual subscriptions, which encourages long-term customer commitments.
Usage-Based Model: Pay for What You Use
Usage-based pricing has gained popularity in recent years, especially for services where consumption can vary widely between customers. Amazon Web Services (AWS) exemplifies this model, charging customers based on their actual usage of cloud computing resources.
A study by OpenView Partners found that companies with usage-based pricing grew 38% faster than those without it. This model aligns costs with value delivered, making it attractive for customers who want to scale their usage as they grow.
Freemium: The Gateway to Paid Services
The freemium model offers a basic version of the product for free, with premium features available for a fee. This approach can effectively acquire users. Slack grew to over 30,000 actively using teams out of roughly 220,000 created teams.
However, companies must strike the right balance between free and paid features. Too much value in the free tier can make it difficult to convert users to paying customers.
Seat-Based Pricing: Scaling with Team Size
Seat-based pricing charges customers based on the number of users or “seats” that access the software. This model works well for tools that entire teams use, such as project management software or collaboration platforms.
For example, Asana, a popular project management tool, uses seat-based pricing. This model allows companies to start small and increase their investment as their team grows, making it an attractive option for scaling businesses.
Tiered Pricing: Catering to Different Needs
Tiered pricing offers different levels of service at various price points. This model allows companies to cater to a wide range of customer needs and budgets. HubSpot, a leading inbound marketing and sales platform, uses tiered pricing effectively, offering Starter, Professional, and Enterprise levels with increasing features and capabilities.
While these models have proven successful for many B2B SaaS companies, the best model for a business will depend on various factors (including target market, product complexity, and growth goals). The next section will explore effective pricing strategies that complement these revenue models and help maximize their potential.
How to Price Your B2B SaaS for Maximum Impact
Pricing your B2B SaaS product effectively can significantly boost a company’s growth and profitability. Let’s explore some of the most impactful pricing strategies for B2B SaaS companies.
Value-Based Pricing: Aligning Price with Customer Benefits
Value-based pricing focuses on the perceived value your product brings to customers. This approach offers several advantages for SaaS businesses, including covering every revenue opportunity, providing valuable research, optimizing your product, and encouraging product improvements.

To implement value-based pricing effectively:
- Quantify the tangible benefits your product provides
- Calculate the monetary value of time saved or efficiency gained
- Price your product accordingly
Salesforce exemplifies successful value-based pricing. They position their CRM as a tool that significantly increases sales productivity and customer retention, allowing them to command premium prices in the market.
Competitor-Based Pricing: Positioning in the Market
Competitor-based pricing involves setting prices based on what competitors charge for similar products or services. This strategy can be useful for new market entrants, but it’s essential to differentiate your offering.
If you price similarly to competitors, provide additional value or unique features that justify your price point. Zoom entered a crowded video conferencing market but gained traction by offering a more user-friendly interface and better video quality at competitive prices.
Dynamic Pricing: Adapting to Market Conditions
Dynamic pricing adjusts prices based on market demand, customer behavior, or other external factors. While more common in B2C markets, B2B SaaS companies can also benefit from this approach.
You might offer lower prices during slower business periods or higher prices for rush orders. Cloud infrastructure providers like AWS use dynamic pricing effectively, adjusting prices based on demand and available capacity.
Penetration Pricing: Gaining Market Share
Penetration pricing sets lower initial prices to quickly gain market share. This strategy can be particularly effective for new entrants in a competitive market or for companies launching new products.
It’s important to have a clear plan for raising prices once you’ve established a strong user base. Slack used a pricing strategy that involved choosing between penetration, skim, or follow approaches when entering the market.
Implementing the right pricing strategy requires careful consideration of your product’s value proposition, target market, and long-term business goals. Regular reviews and adjustments of your pricing strategy (based on market feedback, customer acquisition costs, and your product’s evolving value proposition) are essential for success.
The next section will explore key factors to consider when pricing your B2B SaaS product, helping you refine your strategy and maximize your pricing impact.
What Factors Drive B2B SaaS Pricing?
Pricing a B2B SaaS product requires careful consideration of multiple factors. The right pricing strategy can significantly impact a company’s success. Let’s explore the key elements that should shape your B2B SaaS pricing decisions.
Customer Willingness to Pay
The foundation of effective pricing lies in understanding your target customers and their willingness to pay. This involves more than just guessing what they might pay; it requires thorough market research and customer segmentation.
A study found that the average amount of time spent on pricing amongst companies is a mere 8 hours total over the life of the business. Conduct surveys, interviews, and analyze usage data to gauge the perceived value of your product. Tools like Van Westendorp’s Price Sensitivity Meter can provide insights into acceptable price ranges for different customer segments.
Value Proposition Alignment
Your pricing should reflect the unique value your product brings to customers. Quantify the benefits in terms of time saved, increased productivity, or revenue generated. For instance, if your software saves a company $100,000 annually in operational costs, pricing at $20,000 per year could be justified as a clear ROI for the customer.

Salesforce exemplifies this approach, tying their pricing directly to the potential revenue increase their CRM can generate for clients. This strategy allows them to command premium prices while still providing clear value to customers.
Acquisition and Retention Costs
Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV) are important metrics in SaaS pricing. According to a report, industry stalwarts have seen their CAC up 70 to 75% whereas new markets are seeing increases closer to 50% over the past five years. Your pricing needs to cover these costs while still providing value to customers.
A general rule of thumb suggests that your CLV should be at least 3 times your CAC for a sustainable business model. If your CAC is $1,000, try to develop a pricing strategy that yields at least $3,000 in customer lifetime value.
Scalability and Growth Planning
Your pricing model should accommodate your company’s growth plans. Consider whether your current pricing structure will support scaling from 100 to 1,000 customers. Can it handle enterprise-level clients without major overhauls?
Implement a tiered pricing structure that can grow with your customers. HubSpot’s pricing model offers increasingly sophisticated features at higher price points, allowing customers to upgrade as their needs evolve.
Regular Review and Optimization
Pricing isn’t a set-it-and-forget-it decision. Conduct regular reviews and adjustments based on market feedback, competitive landscape, and your evolving value proposition. Companies that review and optimize their pricing at least quarterly grow 30% faster than those who don’t (according to a study by Simon-Kucher & Partners).
The key to successful B2B SaaS pricing lies in striking a balance between value for the customer and profitability for your business. Consider these factors carefully to develop a pricing strategy that not only attracts customers but also supports your long-term business goals.
Final Thoughts
The B2B SaaS market demands careful selection of revenue models and pricing strategies for success. Companies must evaluate subscription-based, usage-based, freemium, seat-based, and tiered pricing options to cater to diverse customer needs and business objectives. Value-based, competitor-based, dynamic, and penetration pricing strategies can significantly boost growth and profitability when implemented thoughtfully.

Continuous evaluation and optimization of pricing strategies are essential in the dynamic B2B SaaS landscape. Companies that actively manage their pricing outperform those who neglect this critical aspect. Successful revenue models and pricing strategies in the B2B SaaS market align with customer value and business goals (while considering factors such as willingness to pay, value proposition, and scalability).
Find Your Audience understands the complexities of B2B SaaS marketing and pricing. Our team of experts can help you develop effective strategies and drive your business forward. We offer tailored solutions to maximize your marketing impact and create tangible value for your B2B SaaS business, whether you need support in content production, a dedicated marketing manager, or a full marketing department experience.