Top SaaS Pricing Models to Boost Revenue and Sustain Growth

In 2024, the global SaaS market surpassed the $266 billion mark and is on track to approach $1,131.52 billion in 2032, with solid but slower growth compared to the hypergrowth years preceding it. At the same time, private SaaS companies report a median annual recurring revenue (ARR) growth of around 25%, indicating that most players are no longer merely “riding the wave” and must work to retain every point of net revenue growth. Pricing has become one of the few levers you still have complete control over.

The landscape is also getting more complex. Recent benchmarks indicate that over 40% of SaaS companies changed their prices in 2024, either by raising or lowering headline numbers, introducing new pricing tiers, or hiding certain plans from the main pricing page. Around 78% now prefer value-based SaaS pricing strategies, and many run hybrid SaaS pricing models that combine per-user, per-feature, and usage charges.

For founders and product leaders, the question is no longer “Which price feels right?” but “Which pricing model fits our product, motion, and customer needs, and how do we evolve it over time?”

This article walks through the popular SaaS pricing models in use today, how they support (or block) revenue and growth, and how to choose the right mix for your stage and go-to-market. We’ll examine flat-rate, tiered, per-user, usage-based, hybrid, and other pricing models.

What Is SaaS Pricing and How It Differs from Traditional Software Pricing

SaaS pricing refers to the method of charging for ongoing access to a cloud-based product that continually evolves. Instead of a one-time license and a big upfront payment, you sell a recurring service. Customers pay for something that stays up, stays secure, and keeps improving: features, uptime, support, and performance.

Under the hood, most SaaS pricing models are based on a few fundamental decisions. You choose how often you bill customers: monthly, annually, or on multi-year terms. You define a price metric, which is the unit that links what you charge to how people use the product, such as users, seats, projects, API calls, storage, transactions, and so on. You also decide how to package features and limits into plans. Those three levers together determine how revenue grows as customers roll out the product, add new teams, and push more of their work through it.

Because revenue is recurring, SaaS pricing sits at the center of your unit economics. The numbers on your pricing page must work in multiple directions simultaneously. They need to feel clear and reasonable to buyers. They need to support healthy margins and a sensible Customer Acquisition Cost (CAC) payback. They also need to leave room for expansion, so successful customers can spend more without feeling penalized. A “small” discount that becomes standard can quietly destroy customer lifetime value. A clever price metric that doesn’t align with how customers perceive value can hinder adoption or mislead customers into the wrong tier.

Pricing Strategy vs Pricing Model

Teams often use the terms “pricing strategy” and “pricing model” interchangeably. They are connected, but answer different questions. A simple way to think about it is this: your pricing strategy explains why you charge the way you do, and your pricing model defines how that charge actually works in practice.

A right pricing strategy lives at the business and positioning level. It ties pricing decisions to your goals, your target market, and how those customers perceive value. When shaping a strategy, you decide whether to lean on value-based pricing, benchmark yourself against competitors, or anchor pricing around your costs.

A model is more operational. It is the pricing structure you use to turn that pricing strategy into invoices and line items. If your plan is value-based and focused on team collaboration, you might use a per-user or per-active-user model that scales with the number of users. If your strategy is outcome-driven for an infrastructure or data product, a usage-based or transaction-based model may be more natural because value grows with volume. If you serve very different customer segments, you might combine multiple pricing models.

Look at the difference between the SaaS pricing strategy and the pricing model in the table below:

Core B2B SaaS Pricing Strategies

Pricing strategy is the high-level story behind your numbers. It shapes which customers you attract, how fast revenue grows, and how your product is perceived in the market. The SaaS pricing strategies below are the ones most SaaS company founders actually use when they move from “what should we charge?” to a repeatable model:

• A value-based pricing strategy starts from the outcomes your product creates for customers. You look at revenue gains, cost savings, or risk reduction and set a price that reflects a reasonable share of that value. This approach fits products with clear ROI and a strong positioning story, and gives sales and leadership confidence to hold their price
• A competitor-based pricing strategy uses the market as its main reference point. You analyze similar tools, map their pricing tiers, and place your offers in a range that feels familiar to buyers. This strategy helps when you enter an established category and need pricing that lets customers compare you quickly without getting stuck on the number
• Cost-plus pricing starts with your fully loaded costs and adds a target margin on top. You include infrastructure, support, development, and overhead, and treat the result as a safe minimum price. This approach helps finance and founders avoid underpricing and often serves as a baseline you refine with more advanced SaaS pricing strategies
• Penetration pricing uses a lower entry price to win enterprise customers and gain usage quickly. The goal is to establish accounts quickly, build adoption, and create a foundation that can later be expanded through higher pricing tiers, add-ons, or new products. This strategy fits competitive or price-sensitive segments where speed to market and logo count matter
• Price skimming and premium positioning place your product toward the upper end of the market from day one. You launch at higher prices that reflect innovation, depth, or mission-critical use and focus on customer value. This pricing strategy fits products with strong differentiation and supports a brand story built around expertise and reliability
• PLG-focused pricing strategy supports a product-led growth motion. You lean on free tiers, trials, or simple starter plans so users can see value quickly and upgrade inside the product. This approach fits tools with fast time-to-value and strong bottom-up adoption, and helps reduce acquisition costs by letting the product do more of the selling
• Hybrid and expansion-focused strategies combine platform fees, seats, usage, and add-ons into a single structure. You pick value metrics that grow as customers succeed, such as users, data volume, or workloads, so revenue expands naturally inside each account. This approach fits B2B SaaS companies aiming for strong net revenue retention and a model that works for both smaller customers and large enterprises

“Negative churn is crucial for success in long-term SaaS companies, requiring expansion revenue to exceed churn losses. The lesson from serving on the board of HubSpot was that starting with one product at one price point ($6,000 per year, or $500 per month) meant there was no way to generate any expansion revenue. To secure this, SaaS companies must implement variable pricing axes. This can involve introducing different editions, charging for users, or, as HubSpot did, basing pricing on a metric like the number of leads stored, a better indicator of software value. For an early-stage startup, however, having variable pricing is a secondary thing that can be introduced later once the business is running and up and running.”

David Skok, The SaaS business model & metrics: Understand the key drivers for success

Top 8 Popular SaaS Pricing Models

SaaS pricing models are how an abstract strategy turns into real numbers on a pricing page. They decide what gets metered, how revenue scales as customers grow, and how easy it is for people to understand what they are buying. Below, we outline the common SaaS pricing models, including examples, strengths, and trade-offs to consider.

Flat-rate pricing model

A flat-rate pricing model means one product, one set of features, and one recurring price. The customers pay a fixed monthly price, regardless of usage or team size. This model works best for focused products with a narrow, clearly defined use case and relatively similar customer profiles.

Examples: Basecamp, a project management and team collaboration platform, uses flat-rate pricing for larger teams. For $299 per month when billed annually, a company gets access to all features for all employees, without per-user fees.

Pros:

• Flat pricing is easy to communicate on the website and in sales conversations
• Prospects understand immediately what they get and what it costs
• Billing, forecasting, and internal reporting stay very straightforward

Cons:

• Revenue does not grow naturally with larger or heavier-usage customers
• Small customers can feel overcharged, while large customers can be underpriced
• Aligning price with real value or cost-to-serve is difficult once the customer mix changes

Tiered pricing model

Tiered pricing model offers multiple plans at different price points, each with its own limits and feature sets. Prospects choose the tier that matches their size, complexity, and budget. Tiered model suits products that serve several segments, from small teams to large enterprise companies.

Examples: Dropbox, HubSpot, Mailchimp, most modern B2B SaaS products.

Pros:

• Pricing tiers create a visible path for upgrades as customers grow or mature
• Different buyer personas and company sizes can be served from the same product
• Price anchoring between tiers makes perceived value easier to frame

Cons:

• Too many pricing tiers or confusing differences slow decisions during evaluation
• Pricing plans need regular tuning as features, ICP, and usage patterns evolve
• Customers may feel forced into a higher tier just to access a single key feature

Per-user pricing model

Per-user pricing ties revenue directly to the number of people with licensed access. As more users join inside a customer’s organization, the bill scales in a linear, predictable way. This model fits collaboration, CRM, productivity, and many line-of-business tools.

Examples: Salesforce, Microsoft 365, Zoom, many sales and CS platforms.

Pros:

• Finance and procurement teams find per-user pricing easy to model and approve
• Revenue grows alongside adoption when more teams or departments come on board
• The structure feels familiar and lowers friction during buying and renewal cycles

Cons:

• Customers sometimes limit user counts to control spend, which reduces adoption
• The number of users is not always a good proxy for value in every product
• Shared logins and partial rollouts appear and can weaken engagement and stickiness

Per-active-user pricing model

Per-active-user pricing is a variation of per-seat pricing where a company can invite many users, but only pays for those who are active in a given billing period. This approach solves the classic problem of buying a large bundle of seats and then discovering that a good share of them never log in.

Example: Stripe Connect lets platforms pay a fixed fee for each monthly active account. Additionally, the platform determines its own pricing and retains its own fees.

Pros:

• Customers feel comfortable inviting more teammates because inactive accounts do not inflate the bill
• Large rollouts become easier to approve, since procurement pays in line with actual usage
• Revenue from each account grows with engagement, as highly active teams generate higher monthly spend

Cons:

• Revenue can be harder to predict when the number of active users changes month to month
• The model is less compelling for very small teams, where almost every invited user is active
• Implementation requires reliable tracking of activity and billing that can adjust for inactive seats

Usage-based pricing model

Usage-based pricing links spend directly to product usage, such as API calls, events, data volume, or compute time. Bills rise as customers push more volume through the system. This model fits infrastructure, data, and communication products where value scales with throughput.

Examples: Zapier is a good example of this approach, where pricing is organized into tiers and scales with the number of automated tasks a customer runs each month.

Pros:

• Spend stays closely tied to the value and scale of real workloads
• High-growth customers can drive significant revenue expansion over time
• New customers can start with low usage, which lowers the barrier to entry

Cons:

• Customers may worry about unpredictable bills if usage suddenly spikes
• Internal forecasting and capacity planning become harder for finance and ops
• Some buyers prefer fixed or tiered pricing because comparison is easier

Feature-based pricing model

Feature-based pricing organizes plans around which capabilities are included. Entry plans cover essentials, while higher pricing plans unlock advanced analytics, security, automation, or integrations. This model is suitable for products that have a clear distinction between basic and advanced functionality.

Examples: ActiveCampaign, a platform for marketing automation, email marketing, and customer support, uses a feature-based pricing model. Customers can start with core functionality and move to higher plans as their business grows or they need more advanced capabilities.

Pros:

• Higher price points are easier to justify when they clearly unlock more capability
• Smaller customers can start with an affordable feature set that still solves core problems
• Resource-intensive or premium features can sit in upper tiers with appropriate pricing

Cons:

• Customers may feel that important features sit “behind glass” in higher plans
• Teams inside the same company can have different experiences if on different pricing tiers
• Deciding which features belong where requires strong customer research and iteration

Freemium pricing model

Freemium pricing offers a free tier with meaningful but limited value, complemented by paid plans that provide additional value. The free plan drives awareness, sign-ups, and product familiarity, creating a pool of users who may later convert.

Examples: Slack and Canva are classic examples of the freemium pricing model. Both offer a solid free tier to attract and onboard users, then unlock more advanced features, limits, and tools on paid plans to drive upgrades and maximize revenue.

Pros:

• Initial adoption is effortless because there is no cost barrier
• A large free user base can convert into steady paid growth over time
• Word of mouth and referrals often increase when anyone can try the product

Cons:

• Free users still consume infrastructure and sometimes require support capacity
• Conversion rates suffer if upgrade triggers are weak or confusing
• Paid users must generate enough revenue to cover the cost of serving the entire base

Hybrid pricing model

Hybrid SaaS pricing models combine several of the structures above into one coherent system. A typical pattern is a base platform fee plus per-user, usage, and add-on components, all under one contract.

Examples: Most of the examples above use some form of hybrid pricing. Buffer is a clear case, where the final price depends on both the chosen pricing plan and the number of social channels a customer connects to.

Pros:

• Revenue mixes predictable recurring income with strong expansion potential
• Very small and very large customers can be served under one flexible framework
• Multiple levers exist to refine pricing as the product and target market change

Cons:

• Model design, billing, and communication require careful cross-functional work
• Customers need a clear story about what drives their bill and how to control it
• Internal teams must align on discounted price rules and how each component is positioned

Best Pricing Models for AI-based SaaS

AI-based SaaS changes the economics of pricing because every query, API call, or model run consumes noticeable compute and energy, not just storage or basic server time. Traditional per-user pricing often fails here: heavy users can drive costs far beyond what a simple license fee covers, so revenue and usage drift out of alignment.

Outcome-based pricing and token-based pricing address this gap in distinct ways. Outcome-based pricing ties fees to precise business results such as qualified leads, fraud prevented, or hours saved, which makes spend easier to justify for enterprise buyers but requires reliable ways to track and attribute impact. Token-based pricing, popularized by LLM and AI API providers, charges for input and output tokens (or similar units), with volume tiers and model-based rates so that higher-intensity usage and more expensive models are priced accordingly.

In practice, AI SaaS often blends these ideas rather than copying classic models of SaaS companies. A base platform fee may cover access and support, while token-based charges reflect raw model consumption, and outcome-based components are layered into higher tiers or enterprise contracts. This kind of hybrid approach keeps costs under control, aligns price with both usage and value, and avoids the trap of “all-you-can-eat” plans that become unprofitable as AI workloads scale.

Why Choosing the Right SaaS Pricing Model Matters

Your SaaS pricing model is a core growth lever that shapes how revenue comes in, how potential customers perceive your product, and how easily the business can scale. Thoughtful decisions early on give you a stronger foundation for future releases and any price changes you introduce later.

Increase revenue and profitability

Well-designed, effective SaaS pricing models help revenue grow in a controlled and sustainable manner. Clear tiers, meaningful add-ons, and sensible increases on higher-value plans make it easier to capture more value from customers who rely on your product the most. When plans are aligned with real usage patterns and different customer segments, power users can move up instead of churning or staying on underpriced contracts. For example, introducing a premium plan with advanced features and priority support can boost profitability without requiring a constant influx of new customers.

Improve customer acquisition and retention

A pricing model is often one of the first touchpoints potential customers see. A simple, transparent structure reduces hesitation, helps buyers quickly identify the right plan, and keeps sales and onboarding conversations focused on outcomes rather than confusion over limits. Options like a freemium model, trials, or clear entry tiers can make it easier for new users to start and then grow within the product, rather than hitting a ceiling and leaving. When pricing feels fair and understandable, it supports both acquisition and long-term retention.

Align pricing with customer value

Pricing works best when it reflects the value customers actually get from the product. Using value-based pricing logic, even if the final model is a mix of approaches, helps buyers feel they are paying for outcomes. This alignment enhances conversion rates, fosters healthier customer feedback, and provides teams with a clearer explanation of why a plan costs what it does. It also makes discussions about new features or price adjustments more grounded, because both sides can refer back to the business impact.

Enable business scalability and market growth

A flexible, future-ready pricing model enables easier growth into new and diverse customer segments and target markets without the need for constant reinvention. Add-ons, usage-based elements, and segment-specific packages allow you to serve small teams, mid-market companies, and enterprises from the same core product. As the offering matures, you can adjust tiers, limits, or modules instead of replacing the entire pricing strategy. In practice, this means pricing supports expansion and market entry, rather than hindering them.

Best Practices for Optimizing Your SaaS Pricing

Pricing works best when you treat it as part of running the business. Your product evolves, your costs shift, and customers discover new ways to utilize what you build. A simple review rhythm helps you keep prices close to reality, rather than relying on guesses made two years ago.

Make pricing an ongoing process

Think of pricing as something you maintain. Set a regular cadence for review, for example, once or twice a year, and treat it like any other product or strategy check-in. Examine how plans evolve, where deals falter, and what sales and customer success teams observe in conversations. Sometimes you will adjust details. Sometimes, you will confirm that prices are still valid.

Use customer research to confirm your value metric

Many SaaS companies’ pricing problems come from charging for the wrong thing. Discuss with customers how they measure success with your product and what features they use most frequently. Ask which limits feel reasonable and which feel random. Combine those conversations with simple surveys or brief pricing interviews. When your value metric aligns with how customers perceive value in their own business, upgrades feel natural, and price discussions feel more grounded.

“A compelling thought starter is to explore what would happen if you were more aggressive than you think necessary, such as increasing the price by 10%, 20%, 50%, or even 100%. Testing these increases, even with a small set of deals or sales reps, is the best way to understand the price elasticity in the market truly.”

Kurt Smith, SaaS Pricing Strategies that Work: How to Design an Optimal Pricing Model with FastSpring VP Product

Let data and cohorts guide where you change

Customer stories are essential, but they must align with the data to be effective. Look at upgrades, downgrades, expansion, and churn by cohort and segment. See where customers reach their limits, which pricing plans they tend to avoid, and where heavy users tend to cluster. If many accounts cancel when they reach a particular threshold, the transition to the next plan may be too abrupt. If large customers remain on your smallest tier, you may be undercharging or packaging features incorrectly. This kind of view helps you change the right parts rather than reshaping everything at once.

Communicate pricing changes clearly and early

Price increases and structural changes are sensitive, even when they are justified. You can reduce friction with straightforward communication. Give customers early notice, explain what is changing and why, and show precisely how it affects their current plan. Where it makes sense, offer a grace period, temporary grandfathering, or a clear path to upgrade that actually improves their experience. People may not welcome higher prices, but they will tolerate them much better if they feel informed and respected.

Align pricing with your positioning and go-to-market

Pricing should align with the story you tell about the product and the way you present it. A product-led, self-serve motion needs visible plans, low friction at entry, and predictable costs. An enterprise-first motion can support higher Annual Contract Values (ACVs) and more custom packaging, but still benefits from a consistent logic that sales can explain in one slide. The same applies to the brand. A “premium, mission-critical” position does not lend itself to aggressive discounting or random exceptions. When the SaaS pricing model aligns with your positioning and go-to-market strategy, it reinforces trust.

What You Get by Partnering with Glorium Technologies

Glorium Technologies has spent over 15 years building and scaling SaaS products, delivering more than 150 solutions for startups and enterprises. With around 200 specialists across the US and Europe, our pricing and monetization work is always tied to real product architecture, billing flows, analytics, and hands-on experience in MVP development and ongoing SaaS development services. Our team holds core quality and security certifications like ISO 9001 and ISO 27001. It works with platforms such as AWS, Microsoft, Odoo, and Stripe, which helps keep your pricing ideas realistic and implementable from day one.

In a SaaS pricing engagement, our team helps you understand where your product really creates value and which metrics make sense for monetization, whether that is seats, usage, outcomes, AI consumption, or a mix. That insight translates into a clear pricing model and plan structure, aligned with your billing stack and go-to-market strategy, and supported by tracking, allowing you to see how pricing affects conversion, churn, and expansion.

If you’re looking for a pricing system that is structured, testable, and ready to grow with your SaaS business, reach out to us to schedule an intro call and receive a clear guide to SaaS pricing tailored to your business.

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