Most early SaaS products are priced by gut feel, and gut feel tends to aim low. A low price feels safe: fewer objections, less rejection, less pressure to justify the product. But a price that is too low makes every other part of the business harder. You need more customers to reach the same revenue, you can afford less support and marketing, and you attract customers who are shopping on price.
This guide covers why founders underprice, how to anchor your price to value, which pricing page patterns are worth testing, and how to raise prices without damaging trust with existing customers.
Why Founders Underprice
The reasons are usually psychological rather than analytical:
- Imposter syndrome: "Who am I to charge $299/month?"
- Competition fear: "My competitor only charges $49."
- Rejection anxiety: "What if nobody buys?"
- Feature insecurity: "I need to build more features before I can charge more."
Customers don't pay for your confidence or your feature count; they pay for the value you create for them. If your product saves a team five hours a week, the useful comparison is the cost of those five hours, not a competitor's price tag. Competitor prices tell you what the market is used to seeing, not what your product is worth to a specific customer.
If you're not sure what that value is, ask. Pricing discovery interviews are a structured way to learn what customers would pay and why.
Choose the Right Value Metric
The unit you charge for often matters more than the number on the price tag. The common options:
- Per seat/user: The most common, but it can discourage teams from inviting colleagues.
- Usage-based: Charging for API calls, data stored, or events tracked. Price scales with consumption.
- Feature tiers: Unlocking more features at higher price points.
- Outcome-based: Charging a percentage of revenue generated or money saved. The closest link between price and value, but the hardest to measure and bill.
A good value metric grows as your customer gets more out of the product, so your revenue grows with their success instead of requiring a new sale. For a longer treatment, see the deep dive on SaaS value metrics.
Pricing Page Patterns Worth Testing
Your pricing page is where the decision happens. These are common patterns; none is guaranteed to work for your audience, so treat each as something to test rather than a rule:
- Highlight a recommended plan: Visually emphasize the plan most customers should pick (often labelled "Most Popular"). This reduces decision fatigue.
- Anchor with a higher tier: Showing a higher-priced plan, or an enterprise "Contact us" tier, makes the middle plan look more reasonable and gives larger customers a path to talk to you.
- Annual discounts: Offer a discount for paying annually. Stating the saving in money ("Save $120/year") is often clearer than a percentage.
- Reduce risk: Real testimonials, customer logos (with permission), and a clear refund policy help hesitant buyers.
If you're building the page in Laravel, this walkthrough of pricing page wireframes, copy, and build covers the implementation side.
Pricing Psychology
The Decoy Effect
A decoy is a tier that exists mainly to make another tier look like a better deal. A hypothetical example:
- Basic: $49/month
- Pro (decoy): $99/month
- Pro+: $109/month (with significantly more than Pro)
Next to Pro, Pro+ looks like obvious value for an extra $10, which nudges buyers toward the higher plan. Use this carefully: every tier should still be a legitimate option, and customers resent pricing that feels manipulative.
Charm Pricing
Prices ending in 9 ($49, $99) are common in consumer products. Some B2B founders use round numbers ($50, $100) to signal a premium, straightforward product, and others test endings like 7. There is no universal answer; pick one convention, stay consistent across tiers, and test if you have enough traffic to measure a difference.
A Price Increase Playbook
A price increase goes smoothly when customers understand why it's happening and have time to prepare. Here's a simple six-week plan.
The 6-Week Timeline
- Week -6: Analysis. Review your unit economics and talk to your best customers about the value they get from the product.
- Week -4: Decision. Decide on the new pricing and on how existing customers will be treated (grandfathered, delayed increase, or moved to the new price).
- Week -2: Preparation. Draft the announcement email, update the pricing page and billing configuration, and prepare answers to likely questions.
- Week 0: Announcement. Email existing customers and publish the new pricing.
- Week +2: Follow-up. Reach out personally to your most important accounts and offer an annual plan at the current rate if they want to lock it in.
- Week +4: Review. Measure the impact on MRR, churn, and new sign-ups, and compare with the period before the change.
An Announcement Email Template
Lead with the value you've added, be specific about dates and amounts, and make it easy to reply.
Subject: Upcoming changes to [Product] pricing
Hi [First Name],
When we started [Product], our goal was to [original mission]. Over the past year we've shipped [specific new features] and improved [a key metric such as uptime or speed].
We're updating our pricing on [Date]. New customers will pay the new prices from that date.
What this means for you:
As a thank you for being an early customer, your current price of $[X]/month stays the same until [Date + 6 months]. After that, your plan will be $[Y]/month.
If you'd like to keep your current price for longer, you can switch to an annual plan before [Date].
Why the change?
The new pricing better reflects what [Product] does today and lets us keep improving it.
Questions? Just reply to this email.
Thank you for your support,
[Founder Name]
Summary
If you set your price by gut feel, there's a good chance it's too low. Work out the value your product delivers, pick a value metric that grows with your customers, test pricing page changes rather than assuming them, and raise prices openly and with notice when the product earns it.
Building a SaaS? Launch it on BuildVoyage and record pricing changes as milestones, so other makers can learn from how your pricing evolved.