Dan Martell - 5 SaaS Pricing Strategies That Will Boost Your Revenue in 2026

00:00:00.240 These pricing strategies can help you double your revenue without adding anything to your business.

00:00:06.940 I know that's a big claim, but I learned this from one of my mentors.

00:00:09.780 I remember one time I was chatting to him about some of the struggles of hitting our revenue levels and profitability.

00:00:15.840 And he kind of smiles and he looks at me.

00:00:17.840 He goes, if somebody that knew your business, your industry bought you,

00:00:23.680 what would be the first thing they would change in your business?

00:00:26.880 And I thought about it for a second and I came up with like a bunch of ideas and he said,

00:00:31.880 nope, none of those. The first thing they would do is change your pricing. Most people do not

00:00:37.740 charge enough for their software or their products in their business or services, period, full stop.

00:00:42.520 So here's the strategies. The first strategy is using the Van Westendorp survey to understand

00:00:50.080 your pricing, willingness to pay and sensitivity of pricing your customers have. You know, I remember

00:00:55.900 this one time I was working with one of my clients and he had his pricing set up so that

00:01:00.320 it was like really cute. The packaging, he had a software company and like the packaging of all of

00:01:06.000 his software was super simple. It was like one price per month and everything was included. It

00:01:11.740 was like all inclusive for each package for different types of customers. And he wanted to

00:01:16.240 keep it simple. The problem is, is that when you don't have pricing flexibility, like I'm going to

00:01:21.400 share with you, then it's hard to create what's called expansion revenue, where the more customers

00:01:26.700 you get, they expand their share of wallet, the amount of money they give you, the longer they

00:01:32.160 stay with you. And it got to the point where it was causing a growth ceiling. So he did a Van

00:01:38.160 Wessendorp survey, worked with a team to execute this survey. You can go Google it online. There's

00:01:43.160 a bunch of different articles that talk about how to set it up. And one of the things that he got

00:01:47.840 back as feedback from his target customers is they didn't like the fact that they didn't do

00:01:53.340 per seat pricing. So even though you may think my pricing is simple, my pricing is easy. Everybody

00:01:59.840 understand it. It's one price. I don't gouge people by charging them per seat for this.

00:02:05.560 You may find out that the market would prefer to buy. They have an experience that they assume

00:02:12.160 would happen because the way they do budgets and et cetera, that's the way they think

00:02:16.180 that would change the way you price

00:02:18.420 to make it actually easier

00:02:19.980 and convert higher the customers that are buying.

00:02:23.100 The Van Westendorp survey will teach you everything

00:02:26.040 from the willingness to pay.

00:02:27.820 Are they willing to pay for certain features?

00:02:29.400 It'll give you rank order of the features

00:02:31.440 that your customers appreciate,

00:02:33.700 which might give you information

00:02:35.080 into how to package and tier it.

00:02:37.280 It will also tell you what the price sensitivity is

00:02:40.280 in regards to certain packages

00:02:42.320 and what you're charging either per seat

00:02:44.500 or other value metrics

00:02:45.560 to help you get it clear.

00:02:47.580 So if you're not using this survey strategy

00:02:49.920 to inform your pricing, you are doing it way wrong.

00:02:54.540 It is a must.

00:02:55.560 So please go online, learn how to do it, send it,

00:02:59.040 let me know the results.

00:03:00.480 The second one is using a histogram analysis

00:03:03.220 for your features.

00:03:04.380 Essentially what this means is in your product,

00:03:07.180 in your business, in your agency,

00:03:09.120 it doesn't matter what business you have,

00:03:11.100 people are buying and consuming different features

00:03:14.300 or different aspects of your business at different levels.

00:03:17.380 You might have 100% of customers use this one feature

00:03:20.440 and only 10% use it over here.

00:03:23.040 And for a lot of CEOs or product managers,

00:03:25.400 they just assume that they understand

00:03:27.380 what the buckets look like.

00:03:28.900 They think, well, most people use this

00:03:30.400 and maybe half the people use this.

00:03:32.060 The truth is you don't know

00:03:33.640 if you're not pulling that report.

00:03:35.180 So you can literally do a database query.

00:03:38.760 That's what it's called.

00:03:39.460 You can pull a report from the usage in the database

00:03:42.720 or get your accounting team to do an analysis

00:03:45.300 and figure out what the breakup is.

00:03:48.020 Who's using what?

00:03:48.960 What are the natural break points?

00:03:50.500 Because you can learn so much.

00:03:52.000 You may find out just like my client Mark did

00:03:54.120 that you have a feature

00:03:55.920 that's only being used by enterprise clients.

00:03:58.720 How did he know that?

00:03:59.640 Well, very few people are using this feature

00:04:01.900 based on the histogram analysis.

00:04:03.560 And then when he looked at the customers

00:04:04.820 that were using it,

00:04:05.560 he realized it was only bigger customers.

00:04:07.740 And essentially it was an integration to Salesforce.

00:04:10.900 So because of that, here's what you do.

00:04:12.720 You literally move that feature all the way to your top tier package in your pricing so that you know if somebody needs Salesforce integration, they have to buy the high level package, which Salesforce, you know, if somebody's using Salesforce, they have the money. These are for big companies, right? It's an enterprise software. And it'll pull them up your pricing tier to force them to use a package that's most appropriate for them. That's just one example.

00:04:40.000 You might do the analysis and realize like,

00:04:42.420 you know what, there's people at different levels

00:04:44.740 that are using this feature

00:04:46.080 and I don't wanna make it exclusive

00:04:47.560 to just the top feature.

00:04:49.860 I might make it a paid add-on, right?

00:04:52.080 Another client who did this with their software

00:04:54.640 where they had a connection to QuickBooks

00:04:57.140 and they said, look, if anybody at any part of the tiers

00:05:00.560 wanna use this QuickBook integration and synchronization,

00:05:03.440 we're just gonna make an extra $20 a month subscription

00:05:05.980 on top of what they're currently paying

00:05:07.820 at whatever package they're at.

00:05:08.960 and that was totally fine.

00:05:10.820 So understanding the plotting structure

00:05:13.560 of like where the features lay and who's using what

00:05:16.100 and then understanding that information

00:05:18.480 to inform your pricing is a must.

00:05:21.620 Number three is tiered pricing.

00:05:23.200 I've already mentioned a few times,

00:05:24.440 sometimes we call them packages,

00:05:25.780 but when you go to a website

00:05:27.580 and you see the three tiers of pricing,

00:05:31.100 there's a reason why people do this.

00:05:33.220 I had a client once, Jesse, he had a video marketing software

00:05:35.820 and he had one pricing for his product.

00:05:39.800 His product did a lot of things,

00:05:41.300 but he's like, I just wanna make it easy

00:05:42.860 for people to buy.

00:05:43.840 It's one price, right?

00:05:44.940 It's like, this is a subscription every month.

00:05:47.020 If you use it, great.

00:05:47.800 If you don't, you can cancel.

00:05:49.040 He just wanted to make it easy.

00:05:50.500 A lot of people have these beliefs

00:05:51.720 about their pricing that stops them

00:05:53.940 from actually increasing the yield

00:05:56.660 and honestly, selling to the customer

00:05:59.440 in a more appropriate way.

00:06:01.380 When I looked at it and I was like,

00:06:03.040 A, we need to do a Van Wessendorp survey.

00:06:05.980 We need to look at the histogram analysis.

00:06:08.600 And then we also need to understand

00:06:09.740 the psychology of the customer.

00:06:11.980 See, people coming may be a bigger customer

00:06:15.300 and they may not buy your product

00:06:17.640 because you set the price too low.

00:06:19.740 So the reason why we wanna have packages and tiers

00:06:22.300 is so that we can actually do a bunch of stuff.

00:06:24.540 We wanna price anchor. 1.00

00:06:26.020 The top pricing package is there

00:06:28.640 to make the other one look cheap.

00:06:30.960 The other thing, we wanna make it easy

00:06:32.800 for somebody that's on a lower level

00:06:34.480 to come into your world.

00:06:35.880 If you're mid-pricing only

00:06:37.360 and you don't have a lower-priced item,

00:06:39.440 then you might be losing 20, 30% of potential revenue

00:06:42.240 because you haven't made it more approachable.

00:06:44.400 Now, those smaller businesses might come in

00:06:46.820 and only use a small subset of features,

00:06:49.020 but over time, they'll grow into the higher-end packages,

00:06:52.440 and that's how you keep them from going to your competitor

00:06:54.680 and growing with them.

00:06:55.720 They're gonna grow with you instead.

00:06:57.720 It is so important for you to understand

00:07:00.400 how to package the tiers

00:07:02.540 so that there's a natural motion, right?

00:07:05.420 You wanna set the caps and set the limits

00:07:07.600 so that each one allows a person

00:07:10.180 to get a ton of value at that level,

00:07:12.080 but there's this natural pull forward

00:07:14.280 into the next level when they hit these caps.

00:07:17.000 It might be the number of seats

00:07:18.600 in the first level package, which is like three.

00:07:21.480 Once you get to four,

00:07:22.380 you gotta go to the second tier package.

00:07:24.180 It might be some other value metric,

00:07:25.820 like limits on either the number of contacts, et cetera.

00:07:29.720 But you want to design the tiered pricing

00:07:32.420 so that there's this natural break point

00:07:35.500 of how the size of a customer

00:07:37.940 and the use cases of their needs

00:07:40.560 is mapped to those packages to pull them forward.

00:07:43.500 But tiered pricing,

00:07:44.380 if you don't have at least three different tiers,

00:07:47.200 it can be the same product

00:07:48.480 with the three different pricing

00:07:50.340 and you just have like premium support

00:07:51.900 only available on the high end

00:07:53.460 and like email only support.

00:07:55.720 Like it can literally be that simple,

00:07:57.440 but doing that alone,

00:07:59.160 price anchoring and allowing people to come into your world, it will change your revenue yield in

00:08:04.520 a big, big way. Number four is a value metric. A value metric is essentially measuring something

00:08:11.400 the customer does that tells you they're getting value from your product. Let me explain it this

00:08:17.000 way. One of my clients, Daryl, has software that allows companies to reduce their credit card

00:08:23.120 declines. Out there in the world as people use credit cards, essentially cards will just decline

00:08:28.860 for no reason because of not having enough information

00:08:32.400 or the banks, the issuing banks

00:08:34.240 are just being super protective.

00:08:35.860 And all of a sudden as a business,

00:08:37.620 if you have thousands of customers,

00:08:39.080 you're not paying attention

00:08:40.140 to all the credit card declines.

00:08:41.960 And if it's 15% of your billings every month

00:08:44.280 getting declined that should have went through,

00:08:46.340 the credit card isn't blocked.

00:08:48.080 And Daryl's company, FlexPay can help you reduce that

00:08:51.560 by three, four, 5%.

00:08:53.900 That can mean tens of thousands,

00:08:56.360 if not hundreds of thousands of dollars of revenue

00:08:58.500 and time added to your balance sheet

00:09:01.500 that you wouldn't have to spend

00:09:02.480 going and collecting and bugging customers

00:09:04.260 and having customer support

00:09:05.240 or your account managers involved.

00:09:07.080 And what they do is

00:09:08.160 there's two different types of value metrics.

00:09:10.180 There's a functional value metric

00:09:11.700 and an outcome-based value metric.

00:09:14.100 The outcome-based value metric is what Daryl does

00:09:17.060 where you pay him a percent of the amount of money

00:09:20.460 that they're able to recover above your baseline.

00:09:23.360 So if you know that you currently have 12%

00:09:25.500 credit card declines on monthly basis,

00:09:27.240 and they can reduce that down to 9%,

00:09:29.000 you'll share in that savings with them.

00:09:32.420 That is a beautiful business model

00:09:34.240 because it scales infinitely.

00:09:37.420 Like think about it, it could be like

00:09:38.680 from 10,000 a month all the way to 10 million a month.

00:09:41.740 It scales naturally, it keeps it very simple

00:09:44.000 and it lines the outcome the customers wanting

00:09:47.460 with the service or the value your product delivers.

00:09:50.560 The other one is functional value metric.

00:09:52.500 A functional value metric is limiting

00:09:54.480 the function of the product.

00:09:56.400 And usually it's in the number of seats

00:09:58.680 that you might give to somebody in their business

00:10:01.080 to use your product.

00:10:01.960 It could be the number of contacts in your system.

00:10:04.440 It could be the number of storage

00:10:06.320 that you're allowed to use or upload.

00:10:08.440 And by having a value metric,

00:10:10.200 along with all the other things I've shared with you

00:10:12.180 around packaging and tiering and whatnot,

00:10:14.540 it allows you to create this natural way to monetize.

00:10:17.400 So somebody can be on a low tier package

00:10:19.840 and then still have a value metric

00:10:21.880 that allows them to use more of your product,

00:10:24.320 but for you to capture a higher share of wallet

00:10:27.940 without having to make your pricing page complex.

00:10:32.080 And the beauty of that is,

00:10:33.280 especially if you have aspects of your business

00:10:35.960 that has lower margins that you would like,

00:10:38.840 so it costs you money to have people consume more

00:10:41.720 like storage, like customer support

00:10:44.940 or other things that have like real cost to it,

00:10:47.820 then the value metric alignment there

00:10:49.920 can be a double benefit

00:10:51.420 where it keeps your expenses and your costs

00:10:54.660 linear to the revenue you're collecting from the customer

00:10:57.360 so it doesn't get out of whack.

00:10:59.260 Number five is upsells and cross-sells.

00:11:01.860 This is one of my favorite topics when it comes to pricing

00:11:04.780 because again, all these strategies

00:11:07.060 will make you more money

00:11:08.460 without adding anything new to your business,

00:11:11.020 without changing your code or changing your service.

00:11:14.320 And what's great about upsells and cross-sells

00:11:16.060 is you can literally, I had a client, Bob,

00:11:18.520 use this exact strategy.

00:11:20.160 They had a software that sold to consignment shops

00:11:22.780 and they had a sales team

00:11:24.720 and they were selling their software.

00:11:25.940 And I think it was like $3,000 a year,

00:11:27.920 break it down to monthly

00:11:29.120 if you want to pay up front for the year.

00:11:30.960 And what they were trying to do

00:11:32.280 is increase their average order value

00:11:34.520 because they were already having a conversation

00:11:36.260 with the customer buying this software,

00:11:38.340 but they wanted to make more money

00:11:40.180 so that they could afford to pay more

00:11:41.960 to acquire customers through paid channels

00:11:44.000 and pay their sales reps more

00:11:45.840 so they could hire better trained,

00:11:48.280 higher caliber sales rep.

00:11:50.140 So when I shared this with them, I said,

00:11:51.960 look, you can just upsell or cross-sell something else

00:11:54.920 that you didn't even build.

00:11:56.960 So the question that you should ask yourself is,

00:12:00.300 what are the other things that are related

00:12:02.420 to buying my software that a customer is gonna go

00:12:05.120 have to buy at the same time

00:12:06.760 that I might be able to go partner with those companies

00:12:09.700 and put it together and package it up as a solution?

00:12:13.680 One solution, one price, my sales team sells it,

00:12:17.020 I collect the revenue,

00:12:18.060 And many times you can keep 30%, 50% of the sale,

00:12:23.600 give the delivery aspect, the fulfillment to your partner,

00:12:27.000 and they're responsible for doing all the heavy lifting. 0.66

00:12:29.800 So that hits the bottom line as pure profit.

00:12:33.260 That's why I love this strategy so much.

00:12:34.920 Sometimes I'll call it monetizing the sawdust

00:12:37.660 because a lot of people don't realize

00:12:39.640 that in their business,

00:12:40.960 there's sawdust generated from the activity

00:12:44.020 of just being in your business.

00:12:45.820 And you can monetize that.

00:12:47.480 One example recently is, you know, somebody on my team came to me and they're like,

00:12:51.680 you know, I know we're trying to reduce our expenses for running our events because we

00:12:55.140 have hundreds of incredible SaaS founders that come to our intensive, these incredible events

00:12:59.800 that we host. And they said, well, instead of trying to, you know, like cut expenses or choose

00:13:03.720 different venues or whatever, why don't we allow sponsors to come that are aligned with the biggest

00:13:09.820 problems that our customers are having in their business? And then they paid a sponsor and it

00:13:14.260 creates value for our customers and it's win-win.

00:13:16.640 And I was like, yes, that, more of that.

00:13:20.760 Because all of a sudden now we had this sawdust,

00:13:24.020 which was an event and we get to monetize it

00:13:26.880 and align with partners and create value for customers.

00:13:30.100 The upsells and cross-sell opportunity is all around you.

00:13:33.740 You know, just even creating another package,

00:13:36.520 which is the same thing you're selling,

00:13:37.920 but just add a little bit more so it's more expensive

00:13:40.500 so that you can upsell it, to me is a huge benefit.

00:13:43.880 And it's funny because it works the other way as well.

00:13:46.280 I had my buddy, Michael Litt from Vidyard.

00:13:48.140 They did a deal with ExactTarget

00:13:50.180 because they needed a complete solution

00:13:52.880 for their email product

00:13:54.540 that incorporated video for the sales process.

00:13:58.420 And that's what Vidyard did.

00:13:59.540 So they literally did a deal

00:14:00.900 where the sales team at ExactTarget sold on their paper,

00:14:05.580 that's what it's called, as a channel partner,

00:14:08.440 Vidyard to the customers they were dealing with

00:14:11.260 to get the deal, they had a complete solution.

00:14:13.520 And then Michael got more customers for Vidyard

00:14:16.860 through their sales team

00:14:18.440 without having to add any extra overhead,

00:14:20.660 any cost-acquired customers,

00:14:22.160 just by trying to be strategic about the upsells

00:14:25.060 and the cross-sells.

00:14:26.160 So for me, this strategy to help you with your pricing,

00:14:29.520 to monetize, is a must to increase the yield of your pricing.

00:14:33.620 So as promised, five strategies to boost your pricing

00:14:37.760 without adding any new features

00:14:39.820 or changing your service whatsoever.

00:14:41.640 If you wanna take your pricing to the next level,

00:14:43.640 be sure to download my Fit Pricing Scorecard.

00:14:46.500 It's literally the scoring system

00:14:48.640 that when I sit down with the client,

00:14:49.980 I wanna understand how well they're doing these things.

00:14:52.480 I use this scorecard to help them prioritize

00:14:55.860 and assess their opportunities,

00:14:57.560 help my clients add $200 million

00:14:59.900 in new reoccurring revenue to their software businesses.

00:15:04.260 You could probably apply it to your agency

00:15:05.880 or other business.

00:15:06.880 So be sure to click the link, download your copy.

00:15:09.740 I hope this finds you well,

00:15:10.940 and I'll see you next week.

Dan Martell - January 16, 2023

5 SaaS Pricing Strategies That Will Boost Your Revenue in 2026

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