# SaaS Pricing Strategies: What Works in 2024
Pricing is one of the hardest decisions in SaaS. Here's what I've learned from building multiple SaaS products.
Common Pricing Models
- ### 1. Tiered Pricing
- Most popular model. Offer 3-4 tiers:
- Basic: For individuals
- Pro: For small teams
- Business: For companies
- Enterprise: Custom pricing
### 2. Usage-Based Pricing Charge based on usage (API calls, storage, etc.). Great for developer tools.
### 3. Per-Seat Pricing Charge per user. Simple and predictable.
### 4. Freemium Free tier with paid upgrades. Great for growth but can be costly.
Pricing Psychology
- Anchor High: Show the most expensive plan first
- Highlight Popular: Mark one tier as "Most Popular"
- Annual Discounts: Offer 20-30% off for annual billing
- Remove Friction: Make it easy to upgrade
What I've Learned
- Test Your Pricing: Don't be afraid to experiment
- Talk to Customers: They'll tell you if something's too expensive
- Value-Based Pricing: Price based on value delivered, not cost
- Keep It Simple: Complex pricing confuses customers
Common Mistakes
- Underpricing (you can always lower prices, raising is hard)
- Too many tiers (3-4 is ideal)
- Not offering annual plans
- Hidden costs and fees
Conclusion
Pricing is not set in stone. Be willing to iterate based on customer feedback and market response.