profitwell paddle

BIG NEWS: Paddle acquires ProfitWell to "do it for you"

Your Current Pricing Strategy Seems a Bit...Bananas.

Grace Gagnon Aug 6 2020


Remember the other day when we were talking about bananas and value metrics?

TLDR: We established the importance of having a value metric, which is what you charge for example, per 100 videos or for a banana’s case… how filling the fruit is. 

Today on Recur Now, we’re taking the value metric one step further by talking about the best pricing strategy for SaaS: value-based pricing.

Listen wherever you get podcasts:
PTH_Google-01 PTH_ApplePodcast-01 PTH_Spotify-01





Bananas for value-based pricing

We’ve established that having a value metric is the best way to reduce churn and bolster your growth. If you’re going to use a value metric, you might as well use a value-based pricing strategy. 

What does value-based pricing entail? Well, it could technically be called customer-based pricing because that’s essentially what it is. Formally, though, value-based pricing is basing a product or service’s price on how much the target consumers believe it is worth.

You’re pricing your product based on the value. If you’ve already collected customer data to determine a value metric—you’re already halfway to a value-based pricing strategy. 

Today, I’ll share the three main reasons why we’re fans of a value-based pricing strategy, plus some steps to help you implement one.


Why we like value-based pricing 

There are three main reasons why we ship value-based pricing.

You can price higher than your competitors
Since you’re basing the prices based off of what customers say they’re willing to pay—you don’t need to follow the market.

It also makes improving your product a continual process
It’s more than just a dollar—it’s your features and user experience. To ensure your prices meet the value you need to constantly be optimizing your product.

Builds rapport with customers
Customers are essentially guiding this pricing process, meaning you need to communicate with them quite a bit. This communication will strengthen the relationship and boost retention.

If your company has the time and resources to make value-based pricing work, you absolutely should.


Steps to find your value-based pricing


Step #1: Identify and analyze your buyer personas.

Your buyer personas are fictional characters that represent your ideal customer. They embody the people who you believe to be the perfect fit for your product. What you need to do here is define who these personas are by thinking of things like their personal background, their role in the company, and any challenges they may face.

Screen Shot 2020-08-05 at 4.20.11 PM

Step #2: Survey and talk to your customer base. 

Value-based pricing is all about both, qualitative and quantitative data. Survey customers on topics like price sensitivity and how much they’d be willing to pay for your product. There’s a few methods out there... shamelessly I must plug Price Intelligently, our software that collects this data for you.

Step #3: Analyze the data. 

Look for patterns in features, benefits, and price points for your various personas' value. These patterns will help you create different pricing tiers and packages. Each tier should align with a specific buyer persona (because pricing isn’t one-size-fits-all).

Step #4: Test and review regularly. 

Pricing is a process. Your customer values may change. Your products will evolve and your pricing should too. As market conditions and customer preferences change, you need to constantly be reviewing your pricing strategy as well. For the most optimized pricing, you should re-evaluate every 6 months.


Value-based pricing, in a nutshell 

We say this over and over again at ProfitWell, but you really should care more about pricing. Even just a 1% improvement in pricing equates to an average boost of 11% in profits. If you nail your pricing more than that 1%, imagine how your profits will soar. Especially when you implement a value-based pricing strategy. 

For SaaS companies, we strongly recommend a value-based pricing strategy. It gives you real-time willingness-to-pay data, helps you continuously improve on your products, and deepens rapport with your customers. Since your pricing is the exchange on the value you provide—we ship a value-based pricing strategy. 

Remember: there are four main steps when developing this strategy:

#1 Create buyer personas

#2 Survey and talk to your customer base 

#3 Analyze the data 

#4 Test and review regularly. 

For our in-depth guide on value-based pricing → click here

To recap our Recur Now episode on value metrics → click here


How is the B2B SaaS market trending?

📈7 day +0.86%     |      📈30 day +4.05%      |      📈90 day +14.43%

B2B Index 90 day (06.08)


How are churn and new revenue trending over time?

MRR GAIN -0.8% 

MRR Gain (08.06)

MRR LOSS -1.68%

MRR Loss (08.06)

Your B2B SaaS Index continues to trend up and to the right,  currently valued at +1,650 points. Overall growth increased 0.86% over the last 7 days. 

The MRR gain index, representing upgrades and new revenue, has gone down a bit—precisely 0.8% over the last 24 hours. We’re also seeing some churn in the market, MRR loss is down 1.68% over the last 24 hours. However, this number is an improvement from a few days ago. 

Be sure to check your subscriber newsletter for regular updates to your index. 

You can also share the data with friends and fellow industry players that could use it right now. Send me their email address to and I’ll get their name on the list. Or they can subscribe directly at



Drift announces new category

In the news today, Drift, the leading sales and marketing platform—announced it’s moving beyond conversational marketing. 

The company introduced a new category: Revenue Acceleration. Drift originally created the conversational marketing category, which focused on serving marketing. Now, Revenue acceleration is a revenue operations approach—powering organization and uniting sales and marketing—touching all stages of the customer journey. 

With the focus on the customer, SaaS companies moving to a revenue operations approach is a smart one. Sales, marketing, and customer success teams work more closely together leading to consistent tech stacks, happier customers, more revenue, and more predictable growth. 

More on why RevOps is crucial for SaaS growth → click here

Built to Last

Wistia’s audio conference, Built to Last, is right around the corner. And they just dropped the names of some of the speakers we’ll be hearing from. 

The lineup includes: 

Nik Sharma: investor, marketer, and advisor to some of the fastest growing brands in commerce. 
Madison Utdendahl: 2x Webby award-winning social media director and founder of Utendahl creative. 
Emily Heyward: Co-founder and Chief Brand Officer at Red Antler and one of Inc magazine’s most important entrepreneurs of the past decade. 

Built to Last will share how to build and launch a brand people truly care about—sharing intel on creating thumb-stopping social content as well as strategies for unlocking organic growth. 

 Screen Shot 2020-08-05 at 4.36.42 PM-1


The audio conference is taking place on August 19th and 20th. 

To register → click here


Screen Shot 2020-08-05 at 4.38.35 PM

Today's ProfitWell featured user is DigitalMarketer, making you the smartest marketer in the room. 

DigitalMarketer provides on-demand workshops, courses, and play books to help you up your digital marketing game. With the digital transformation full speed ahead—improving your online presence will help your company stay on top. 

Supercharge your own digital transformation → get started today

That is a wrap on this week’s B2B SaaS happenings. Catch you back here next time with more news and more data. Make sure you're subscribed at or wherever you listen to podcasts.

If you have news to spread or resources to share with our audience, you can always connect with me at to get the good word out there.

By Grace Gagnon

Content Marketer

Subscription market insights you won't find anywhere else.