In a concise interview, Kris Szyszkiewicz, founder of Value Ships, outlines the three most common pricing mistakes made by SaaS companies with $5‑$20 million ARR and presents a set of practical best‑practice recommendations. The mistakes are: (1) failing to act on pricing, treating it as an ignored “elephant in the room”; (2) over‑reacting to market pressure by cutting prices without proper analysis; and (3) neglecting discount management, allowing grandfathered discounts to linger unchecked. To counter these, Kris advises establishing clear pricing ownership at the C‑level, allocating at least a half‑time pricing analyst, conducting quarterly discount‑review meetings, holding semi‑annual price‑optimization discussions in board or leadership forums, and reviewing contract terms to enable future price increases. These operational steps aim to embed pricing as a disciplined practice rather than an ad‑hoc activity.
Chapters
let's say between $5 million ARR and $20 million ARR, what are the most common mistakes that you see companies make as it relates to pricing? And in turn, what does good look like? If a company is really good, they've effectively established pricing as a practice internally, what does that look like? Can you speak to both of those?
Yeah. So the first one is not acting on it. This is definitely the biggest challenge, I think, for the companies and the biggest mistake. So Frequently, especially when the companies are growing quite fast, it's like, okay, let's invest more in leads. Let's invest more in marketing and it will go well. And then pricing, you know, is this elephant in the room every now and then. It works. So let's not just touch it because if we touch it, it breaks. So this is the first one. Then the second one is using a price decrease. So it's like new entrant is coming on the market. We did like new marketing campaigns or we've been using the same sales tactics and then it means It's a fault of the price. Let's decrease the price, right? Because if it's a fault of the price, most likely the price is too high. So the second one is blaming everything on the price and then not just decreasing the prices by and not checking if anything else didn't break, right? So this is the second one. Of course, as a consultant, I go with 3. So the third one is not actively working on the discount. So We sell someone or grandfathering discount. We sell something on that price and then, yeah, we just forget about it. Let's focus on the new logos. So those are the 3 biggest mistakes that I have seen on the market so far. And when it comes to the best practices, I'm trying to be very operational with our companies and very, very down to earth, right? So, you know, the best practice would have been to make it, you know, like a study a year and then having 2 FTEs focused on pricing. Yeah, well, of course it would be a mess. Nevertheless, the, the, the something that can be actually applied is a process where you, at least in your analytics, has have one person who is at least half dedicated to the pricing. And if you're in between $5 to $20 million ARR, you should be capable of achieving it to have someone who is analyzing your pricing. And this is one of this person's duties. Number one. Number two, and maybe this should be number one, in the board, in the C-level, someone should have also a pricing pricing hat. So within your response, this person's responsibility should be pricing. Right now, frequently you just don't know, right? And pricing AI, it's just a discussion in the team. No, someone should be responsible. So this is roles. Then we have what to do, right? What you can really, really apply is at least at the quarterly level, make a discounting discussion, right? So see how many companies are discounted and why they are discounted. And then every half of the year you should have, or I would encourage you to have the price optimization discussion. So you should put in your, whatever you have, whatever process you are following, you know, monthly board meetings, whatever you are using, just put on the agenda price optimization discussion, right? So every, the person who is responsible for that presents the status quo, presents his or her recommendations, and then you as a board or people, extensive board, you name it, but you have within the group of decision makers a discussion. And I have the fourth one, which is a bonus. It's terms and, terms and conditions. See, for example, if it's possible to increase the prices in time, right? It's still a lot, but I think this is feasible for the companies of the size that you've mentioned.
