How to Scale SaaS Pricing and Packaging Strategies

Successfully scaling a SaaS business is a multidimensional challenge, but few aspects are as pivotal - and as difficult to get right - as pricing and packaging strategies. At the 9th annual Startup Boston Week, Michael Goldenberg, a seasoned executive with a track record of helping early-stage software companies scale to millions in revenue, delivered a masterclass on how to tackle this critical component of SaaS growth. His presentation, "Monetization that Scales", offered practical advice, hard-earned lessons, and actionable frameworks to help founders and leaders optimize pricing models in ways that drive revenue, retain customers, and attract investor confidence.

This article distills the key ideas from Goldenberg's session, adding analysis and broader context to empower technology leaders facing the complexities of pricing in a SaaS-driven, competitive environment.

Why Pricing and Packaging Matter More Than You Think

For many startups, pricing is an afterthought - a decision deferred until later stages of product-market fit. But Goldenberg argues that pricing should be baked into the core of your business strategy from the outset. Missteps in pricing can limit growth, alienate customers, and create operational chaos as companies scale.

Goldenberg highlighted the dual challenge of pricing: Set prices too low, and you risk undervaluing your product while struggling to meet your financial targets. Set them too high, and you may scare off potential customers. But pricing is about more than just numbers - it's a reflection of your market positioning and the value customers perceive in your product.

"Don’t base your pricing solely on costs", Goldenberg stressed. "Instead, anchor your pricing around the value your product delivers to customers."

This value-driven approach requires a deep understanding of customer needs, market dynamics, and competitive landscapes - topics Goldenberg explored in depth.

Key SaaS Pricing Models Explained

Goldenberg detailed several popular SaaS pricing models, analyzing their strengths, challenges, and use cases. Here’s a breakdown:

1. Per-User/Seat-Based Pricing

• When it works: Ideal for products that grow in utility as more users adopt the software (e.g., collaboration tools, CRM platforms).
• Challenges: Procurement teams often push back on licensing for every user, especially for light or occasional users. Companies may face resistance unless tiered or role-based pricing options are introduced.
• Pro Tip: Segment user roles (e.g., admins, power users, light users) and tailor pricing accordingly to prevent shared logins and boost adoption.

2. Usage-Based Pricing

• When it works: Best suited for products where usage scales naturally with customer activity, such as cloud computing platforms (e.g., Snowflake).
• Challenges: If your product requires significant customer effort to generate usage, adoption may lag, limiting revenue growth.
• Advice: Avoid over-reliance on this model unless customer usage is predictable and frictionless.

3. Tiered Subscription Pricing

• When it works: Frequently used in enterprise SaaS, this "Good, Better, Best" model bundles functionality into tiers based on customer needs or company size.
• Challenges: Customers often feel they’re overpaying when only a subset of features in a tier aligns with their needs.
• Goldenberg’s Insight: Offer add-ons for lower tiers to provide flexibility while incentivizing customers to move up to higher-value packages.

4. Hybrid Models

• Combining elements of multiple pricing approaches, hybrid models provide flexibility but require careful management to avoid complexity or confusion.

5. Custom Enterprise Pricing

• When it works: Essential for high-value, enterprise-level deals where needs vary significantly between customers.
• Goldenberg’s Tip: Customize pricing without losing transparency. Be ready to explain how quotes are built and what variables influence costs.

Goldenberg's Warning: Avoid frequent pricing model changes. While flexibility is necessary to adapt to market feedback, excessive changes create operational headaches, confuse customers, and complicate renewal negotiations.

The Investor Perspective: Metrics That Matter

Goldenberg emphasized that pricing isn’t just about immediate revenue - it's intertwined with key SaaS metrics that investors scrutinize, including:

1. Customer Acquisition Cost (CAC)

• The cost of acquiring customers should yield payback within 12 months for a healthy SaaS business.
• Goldenberg noted that CAC calculations often vary, which can confuse teams. Be consistent about what expenses (e.g., sales, marketing, customer success) are included in this metric.

2. Lifetime Value (LTV) to CAC Ratio

• A healthy LTV:CAC ratio demonstrates the long-term profitability of your customers. For startups, projecting this early can be challenging, but investors want to hear your assumptions.

3. Net Revenue Retention (NRR)

• Goldenberg's Take: "Net retention might be the single most important metric - it shows whether you're delivering value and growing within your customer base."
• How to improve NRR:
  • Upsell larger packages or cross-sell additional features.
  • Start customers on smaller packages and let them grow, which enhances retention metrics.

4. Average Revenue Per User (ARPU)

• Capturing more value per user over time is an indicator of strategic growth. Goldenberg argued that raising prices after proving value is often easier than setting high initial prices.

5. Pricing Realization

• This metric tracks how effectively your pricing strategy captures potential revenue. Early-stage companies should focus on learning from customer feedback rather than rigidly defending a pricing structure.

Strategies for Price Testing and Market Validation

How do you determine the "right" price for your SaaS offering? Goldenberg shared practical advice for navigating this complex process:

1. Customer Interviews
   • Have candid conversations with target customers, not just friends or advisors who may sugarcoat feedback.
   • Ask open-ended questions like, "What would you realistically pay for this?" Avoid leading with your desired price point.
2. Market Benchmarking
   • Analyze pricing for adjacent or competitive products, but avoid direct comparisons if your value proposition differs significantly.
3. Focus on Value, Not Cost
   • Customers assess ROI through three lenses:
     • Does this save me money?
     • Can this help me make money?
     • Will this reduce my risk?
4. Data-Driven Decision-Making
   • Use tools like Gong or other call-recording software to extract real customer quotes and objections. Let these insights inform pricing adjustments.

Key Takeaways

• Anchor Pricing in Value, Not Cost: Customers care about the ROI your product delivers, not your expenses.
• Test Pricing Early and Often: Gather honest feedback from prospective customers and adjust based on real-world insights.
• Start Small, Then Upsell: Offer smaller packages initially to drive adoption while building opportunities for upselling.
• Avoid Over-Complexity: Keep pricing simple enough for customers - and partners - to understand.
• Focus on Net Revenue Retention: Growing your existing customer base is as important, if not more so, than acquiring new customers.
• Be Transparent About Price Increases: Whether through multi-year contracts or renewal discussions, communicate pricing changes upfront to avoid surprises.
• Leverage Investors’ Metrics: Understand that CAC, LTV, and NRR are critical benchmarks that demonstrate the health and scalability of your pricing strategy.
• Strategically Flex Discounts: Discounting isn’t inherently bad, but ensure it’s tied to mutual benefits (e.g., case studies, references).
• Balance Hardware and Software Pricing: For hybrid models, prioritize ARR growth over hardware margins.

Final Thoughts

Pricing and packaging are at the heart of SaaS success, but there’s no one-size-fits-all formula. As Goldenberg reminded his audience, "You’ll make mistakes. Pricing isn’t easy, and it shouldn’t be." By anchoring your pricing around customer value, testing iteratively, and aligning with SaaS metrics that matter to investors, you can build a scalable foundation for sustainable growth.

Scaling SaaS pricing strategies is both an art and a science. As your business evolves, the key is to stay customer-focused, value-driven, and adaptable, using real-world data to guide your decisions. Following Goldenberg’s insights, technology leaders can turn pricing strategy into a competitive advantage in today’s fast-evolving markets.

Source: "Monetization That Scales: How Pricing and Packaging Evolve from MVP to Scale" - Startup Boston, YouTube, Sep 24, 2025 - https://www.youtube.com/watch?v=8oXho77GEkg

Use: Embedded for reference. Brief quotes used for commentary/review.