Dan Balcauski explains why SaaS pricing isn't just picking a number. The metric you choose—per user, per gigabyte, per API call—ranks differently for each customer segment, so you have to decide which market matters most and weight your pricing toward them.
Chapters
Ultimately, pricing isn't just about picking a number. It's about understanding your customers and making smart choices about how to align with the value that you're providing. We often end up in these exercises with a set of choices that are rarely do we have like a clear winner. So if we think about something like our pricing metric, so the unit of value that we charge a customer for is that per user, per gigabyte of data transferred or per API call, what we'll often find is that there'll be certain segments of customers who that's a great fit for and others who it's, you know, it's a not great fit for. And they, and we'll end up with different rank orderings. And so this really drives, it's, it's one of these areas where the finding the strategy meets the pragmatic, like, who do we really care about serving? It's not that we won't sell to the other people, but we have to make this appealing for this market that we're going after. And so we're going to, we're going to put our weight more heavily on, on this metric than this other metric, given those customers and how they matter to our business.