Pricing is not just a commercial lever. It is a test of how clearly a founder-run company understands its value, its customers and its long-term future.
One of the most revealing moments in a founder conversation is when we reach the pricing sheet.
At first, it looks like a list of contracts, plans, discounts and renewal dates. But very quickly, it becomes the story of the company.
There are the first customers who took a chance when the product was still young. There are the bespoke deals that helped the business survive. There are long-standing customers on old plans, enterprise customers receiving more value than they pay for, and newer customers who are already paying a materially higher price for the same product.
The founder usually knows this before we say anything.
“Some of these customers are underpriced,” they might say. “But they have been with us for years. We do not want to damage the relationship.”
That instinct is exactly why many founder-run software companies become valuable in the first place. They are close to their customers. They care about trust. They would rather over-deliver than make the relationship feel transactional.
At STRONGER Business Partners, we do not see pricing as an exercise in extraction. Our approach is to keep the core and improve the system: protect the trust, identity and operating rhythm that made the business valuable, then add the commercial discipline that helps it keep compounding. Pricing is one of the areas where that balance matters most.
Done badly, pricing can feel abrupt, opportunistic and careless. Done well, it funds better product development, stronger support, greater resilience and a more sustainable future for the company and its customers.
Why pricing deserves founder-level attention
Pricing is one of the clearest ways a business communicates what it believes its product is worth.
It affects revenue, gross margin, customer mix, sales behaviour, product packaging, renewal conversations and the company’s ability to invest. Yet in many founder-run businesses, pricing remains surprisingly informal. It is often shaped by early customer history, competitor references, instinctive discounts and occasional renewal negotiations rather than a deliberate operating cadence.
That is not unusual. OpenView’s research across more than 2,200 SaaS companies found that only 4% achieved an “excellent” pricing capability score, while 44% failed. The same research found that early-stage SaaS companies are often underpriced, with average deal sizes rising by about 50% by the expansion stage, then by another 40% by the growth stage.1
McKinsey has found similar underinvestment in software pricing. In one software pricing survey, about three-quarters of respondents lacked a dedicated and centralised pricing function, 57% lacked adequate sales training to support price-change conversations, and 42% provided no deal-level pricing guidance.2
Pricing has direct profit impact, but the point should be handled carefully. McKinsey’s work in distribution, for example, estimated that a 1% price increase across the product portfolio could yield a 22% increase in EBITDA margins for the average distributor in its data set.3 That does not mean every software company should simply raise prices by 1% and expect the same result. It does mean that pricing deserves leadership attention because small changes in realised price can have a large impact on profitability.
For founders, the bigger question is not “Can we charge more?” It is:
Are we charging in a way that reflects the value customers receive today, while preserving the trust that made the company strong?
Pricing is not one decision. It is a system.
When founders talk about pricing, they often start with the list price. That matters, but it is only one part of the system.
A mature pricing system includes:
- the pricing model;
- the packaging structure;
- the value metric;
- discount rules;
- renewal terms;
- annual uplift clauses;
- minimum fees;
- implementation and support charges;
- add-ons and modules;
- treatment of legacy customers;
- sales approval processes;
- customer communication; and
- the operating cadence for reviewing all of the above.
This is why “raising prices” is often the wrong way to frame the work. Sometimes the price is too low. Sometimes the packaging is unclear. Sometimes the entry plan gives away too much. Sometimes discounts are being used to compensate for weak positioning. Sometimes enterprise customers are receiving high-touch service without enterprise-level pricing. Sometimes usage has grown but revenue has not.
The work is to find the real issue.
Start with value before you touch the number
Good pricing starts with evidence. Before changing anything, we want to understand where customers receive value and where the business is failing to capture a fair share of it.
The best questions are practical:
- Which customers use the product most deeply?
- Which features are genuinely business-critical?
- Which customers would face operational risk or disruption if they left?
- Which customers have expanded usage without expanding revenue?
- Which customers require the most support, implementation or custom work?
- Which segments renew with little negotiation?
- Where are discounts being granted, and why?
- Which contracts still reflect early-stage pricing rather than current product value?
- Which customers have grown in size or complexity since they first signed?
- What measurable outcomes does the product create: time saved, revenue generated, risk reduced, compliance improved or manual work removed?
This evidence changes the tone of the pricing conversation. It moves the business away from apology and towards clarity.
A founder does not need to say, “We are increasing prices because costs have gone up.” Sometimes costs have gone up, but that is rarely the strongest story. A better story is, “The product, service and value you receive today are materially stronger than when this price was set, and we are aligning our commercial terms with that value so we can keep investing in the product and support you rely on.”
The pricing strategies founders should understand
Most companies use a mix of pricing strategies, whether they know it or not. The important thing is to make the choice deliberate.
| Strategy | What it means | Where it helps | Where it can fail |
|---|---|---|---|
| Cost-plus pricing | Price is based on delivery cost plus a margin. | Useful as a floor, especially where hosting, support, third-party licences or services costs matter. | It ignores what the customer actually values and can underprice mission-critical products. |
| Competitor-based pricing | Price is set relative to alternatives in the market. | Useful as a reference point and sanity check. | Competitors may be underpricing, targeting a different segment or using a different business model. |
| Value-based pricing | Price is anchored in customer outcomes and willingness to pay. | Strong fit for specialist B2B software that saves time, reduces risk, improves compliance or supports critical workflows. | Requires customer insight, segmentation and confident value communication. |
| Good-better-best packaging | Customers choose between tiered offers. | Helps serve different willingness-to-pay levels and reduces over-reliance on discounts. | Can become confusing if tiers are not clearly differentiated. |
| Usage-based pricing | Customers pay according to consumption or activity. | Works well when usage closely tracks value, such as transactions, API calls, documents processed or data volume. | Can create bill shock or forecasting difficulty if the metric is not transparent. |
| Hybrid pricing | Combines subscription, seats, usage, modules or platform fees. | Often useful when customers want predictability and the vendor needs value-based expansion. | Requires stronger billing, reporting and customer-success processes. |
| Enterprise pricing | Bespoke or semi-bespoke pricing for larger, more complex accounts. | Necessary for complex deployments, compliance, SLAs, integrations and procurement-heavy customers. | Can become inconsistent if “custom” means “anything goes”. |
Value-based pricing is usually the right anchor for the kinds of specialist software and digitalisation businesses we spend time with. Harvard Business Review describes value-based pricing as one of the most discussed but misunderstood pricing concepts.4 The misunderstanding is important: value-based pricing does not mean ignoring costs or competitors. It means those inputs should inform the decision, not dominate it.
The customer does not buy your cost base. The customer buys the value your product creates compared with the alternatives available to them.
Packaging often matters more than the headline price
Many pricing problems are really packaging problems.
A company may have one plan trying to serve every customer. It may have three plans, but the difference between them is unclear. It may include high-value features in the entry tier because those features were added gradually and never re-packaged. It may sell enterprise-grade support, integrations or compliance features as if they were standard product functionality.
Packaging determines how customers understand value. It also determines whether the company can expand revenue as customers grow.
Harvard Business Review’s work on good-better-best pricing argues that multi-tiered offers can help companies avoid relying too heavily on discounts while giving higher-value customers a reason to spend more.5 For B2B software, that principle often translates into a clearer separation between basic usage, professional workflows, advanced administration, integrations, compliance, reporting, premium support and enterprise controls.
In practice, better packaging may mean:
- introducing clearer tiers;
- moving high-value features out of the lowest plan;
- creating a dedicated enterprise tier;
- adding paid modules for advanced workflows;
- charging separately for implementation, migration or premium support;
- introducing minimum annual fees;
- replacing unlimited usage with fair-use thresholds;
- adding usage bands for high-volume customers;
- simplifying legacy packages; or
- reducing excessive plan complexity.
This is especially important as software products mature. McKinsey found that companies with simpler pricing and packaging structures, such as three clear tiers and fewer add-ons, were nearly 30% more likely to report effective pricing and discount controls than companies with highly complex structures.2
SBI and Price Intelligently’s 2025 SaaS pricing research also warns that complexity is a major pain point: nearly 60% of respondents reported that pricing and packaging complexity was a problem, and the report notes that 80% of the market makes pricing and packaging updates in response to product changes while 56% do so in response to competitors.6
The lesson is simple: as the product evolves, pricing has to evolve with it. Otherwise the company ends up with yesterday’s packaging attached to today’s value.
How often should businesses review pricing?
Pricing should not be a once-every-five-years event.
OpenView found that nearly four in five SaaS companies change pricing at least once per year, with many changing pricing multiple times per year.1 SBI and Price Intelligently’s 2024 B2B SaaS pricing report found an even more active cadence: 38% of surveyed companies changed pricing quarterly, 31% semi-annually, 25% annually and only 6% every few years. The same report showed that 98% had updated pricing and/or packaging since September 2022.7
That does not mean every founder-run company should change prices every quarter. For a durable, profitable business, pricing work should be regular but not frantic.
A sensible operating cadence looks like this:
| Activity | Suggested cadence | What to look for |
|---|---|---|
| Review discounting, win/loss data, renewal objections and exceptions | Monthly or quarterly | Leakage, weak positioning, poor governance, segment differences. |
| Review usage, support burden and customer profitability | Quarterly | Customers receiving more value than they pay for, or accounts that are expensive to serve. |
| Review packaging, tiers, add-ons and minimums | Quarterly or semi-annually | Confusing plans, over-generous entry tiers, missing enterprise offers. |
| Review competitor movement and market benchmarks | Quarterly | Whether the company is materially under- or over-positioned. |
| Run customer research or willingness-to-pay interviews | At least annually | Evidence on value, price sensitivity and packaging clarity. |
| Update list pricing, packaging or contractual terms | Usually annually; more often if product or market changes quickly | Alignment with product value and customer expectations. |
| Migrate legacy customers | Over renewal cycles | Relationship-sensitive transition from historical pricing to sustainable pricing. |
The dangerous cadence is not “too often”. The dangerous cadence is silence: no structured review for years, followed by one large correction that surprises customers and worries the team.
How much should prices increase?
There is no universal right answer. The correct increase depends on the value gap, customer segment, contract history, competitive alternatives, product maturity, usage growth and the relationship context.
The market data gives useful context:
- Simon-Kucher’s 2025 Global Pricing Study found that companies raised prices by 9% on average in the previous year, with the technology, media and telecoms sector averaging 11%.8
- Blue Ridge Partners’ 2024 survey of 151 software executives found that nearly 90% of software companies had raised or planned to raise prices in 2024, with an overall median increase of 5%. It also noted higher average increases in the US and UK than in continental Europe.9
- Growth Unhinged and PricingSaaS tracked 443 SaaS pricing pages in 2024 and found that 42% had adjusted prices in the first three quarters of the year; among the changes they observed, price increases were the most common, with an average increase of about 20%.10
- Gartner’s 2025 research summary on enterprise SaaS renewals noted that costs are often rising by 10% to 20% or more during contract renewal.11
Those numbers should not be copied blindly. They show that price increases have become normal in software, but they also show why customers are more alert to poor communication and weak justification.
As a practical guide, we would usually think in ranges:
| Increase type | Typical range | When it may be appropriate |
|---|---|---|
| Contractual or inflation-linked uplift | 2–5% | Annual adjustments, especially where contracts already allow it. |
| Standard value refresh | 5–9% | The product has improved, support has strengthened, market pricing has moved or terms have not kept up. |
| Material value correction | 10–20% | The customer is clearly underpriced relative to usage, dependency, outcomes or current packaging. |
| Strategic repricing | 20%+ | Pricing has been neglected for years, or the business is moving to a new packaging/model. Usually best phased by cohort. |
For founder-run companies, the most important rule is this:
Do not use one percentage for every customer just because it is administratively convenient.
A low-usage customer on a simple plan is not the same as an enterprise customer running a critical workflow. A loyal early customer on a legacy plan is not the same as a recently acquired customer who bought under current terms. A customer that creates heavy support demand is not the same as a self-sufficient customer. A customer in a niche vertical with high switching costs is not the same as a customer comparing generic horizontal tools.
Segmentation is the work.
Legacy customers need a path, not a permanent exemption
Legacy customers matter. Many of them believed in the product early, gave feedback, tolerated imperfections and helped shape the company. That history should be respected.
But respect does not mean freezing old pricing forever.
When legacy pricing remains untouched for too long, three things happen. First, the company underfunds the product and support those customers rely on. Second, newer customers subsidise older customers. Third, the eventual correction becomes larger and harder to explain.
A better approach is to create a transition path:
- group customers into cohorts by price gap, usage, account history and relationship sensitivity;
- give longer notice to customers facing larger increases;
- cap first-year increases where appropriate;
- phase movement over two or three renewals;
- offer a choice between current packages rather than a single forced change;
- grandfather specific features for a defined period, not forever;
- use account reviews to show value before discussing price; and
- make the future pricing path visible early.
SBI and Price Intelligently’s 2025 research specifically recommends building customer cohorts when increasing prices on legacy customers, using factors such as account history, upgrades, downgrades and past price increases to adapt the increase by cohort and reduce change risk.6
That is exactly how we think about it. The relationship should be protected, but the business should still move towards fair, sustainable terms.
Usage-based pricing can help, but only when the metric reflects value
Usage-based pricing is attractive because it can align revenue with customer value. If a customer processes more transactions, analyses more documents, sends more messages, stores more data or calls more APIs, revenue can scale naturally with adoption.
OpenView defines usage-based pricing as a model where customers pay according to how much they use the product, with the usage metric corresponding to how the customer extracts value.12 That last part is critical.
A poor usage metric feels like a tax. A strong usage metric feels fair because it grows when the customer is receiving more benefit.
Usage-based or hybrid pricing can work particularly well when:
- the product creates measurable output;
- usage varies significantly between customers;
- high-usage customers receive meaningfully more value;
- the company can measure usage accurately;
- customers can forecast usage reasonably well;
- overages are explained clearly; and
- customer success can help customers optimise rather than feel punished.
It is less appropriate when usage is hard to understand, hard to predict or disconnected from value.
For many established B2B software companies, the answer is not a full move to pay-as-you-go. A hybrid model can be more suitable: a base platform fee for predictability, plus seats, modules or usage bands that scale with value.
Discounting is pricing by another name
A company can have a strong list price and still have weak pricing discipline if discounts are uncontrolled.
Discounting often begins with good intentions: helping an important prospect, rewarding loyalty, matching a competitor, closing a quarter or accommodating procurement. Over time, it can become the hidden pricing model.
The first step is to distinguish between good and bad discounts.
Good discounts usually have a reason: multi-year commitment, volume, upfront payment, strategic logo, bundled product, reduced implementation scope or a genuine commercial trade-off.
Bad discounts are vague: “relationship”, “budget”, “competitive pressure”, “end of quarter” or “we needed the deal”.
Pricing discipline does not mean banning all discounts. It means every discount should have a rationale, an owner, an approval level and a record. SBI and Price Intelligently’s 2025 research found that strict approval processes were more than twice as likely as flexible guidelines to keep discounts under 10% off list price.13
Founders should look at discounting as a diagnostic tool. If the same objection keeps appearing, the issue may be packaging, positioning, value communication or target customer fit. If discounts are concentrated in one sales channel or segment, the company may have a governance problem. If discounts are deep but churn is still high, the company may be winning the wrong customers.
Price increases fail in execution, not only in strategy
A pricing change is not complete when the new price is approved internally. It is complete when the company realises the intended value without damaging retention, trust or sales effectiveness.
This is where many companies fall short. Simon-Kucher’s 2025 Global Pricing Study found that average price realisation has declined and now sits at 43%; it also identified customer resistance and competitive pressure as the top barriers to achieving full price increases.14
In other words, planning the increase is easier than capturing it.
Before a pricing change goes live, the company should be clear on:
- which customers are affected;
- which customers are excluded or phased later;
- what the expected revenue uplift is by cohort;
- what churn or downgrade risk is acceptable;
- what contractual rights and notice periods apply;
- what alternatives customers can choose;
- what customer-facing teams are allowed to negotiate;
- who approves exceptions;
- how discounts will be governed;
- how account managers will be incentivised;
- what reporting will show whether the change worked; and
- how the company will respond to pushback.
The commercial plan should be as thoughtful as the pricing model.
Give the team language, not just a policy
Customer-facing teams often feel the pressure of pricing changes before founders do. They hear the objections. They worry about damaging relationships. They may not fully understand why the change is happening.
A policy says, “This is the new price.”
Language says, “Here is why the price is changing, here is the value the customer receives, here is what we have invested in, here is what will stay consistent, and here are the options available.”
The team should be able to explain the change calmly, confidently and without sounding apologetic.
A strong customer message usually includes:
- what is changing;
- when it takes effect;
- why the change is happening;
- what has improved in the product or service;
- how the customer benefits;
- what options the customer has;
- who they can speak to; and
- what happens at renewal.
For long-standing customers, the tone matters as much as the number. The message should acknowledge the relationship and explain the change as part of continuity, not a break from it.
A simple structure might be:
Over the past few years, the product and the support behind it have developed materially. We have added functionality, improved reliability and continued investing in the workflows your team depends on. To keep delivering that level of service and to align our pricing with the value customers receive today, we are updating our pricing from your next renewal. We have reviewed your account carefully and have created a transition path that reflects our long-standing relationship.
The exact words should be adapted by customer segment, but the principle is consistent: specific, respectful, value-led and clear.
Pricing before a transition or succession conversation
For a founder considering succession, investment or a long-term ownership partner, pricing discipline is a signal of business maturity.
It shows that the company understands its value. It shows that revenue quality is not dependent only on new customer acquisition. It shows that the business can grow through retention, expansion and better terms. It shows that the management team can have hard but necessary commercial conversations without losing customer trust.
But aggressive pricing that damages retention is not discipline. It is short-term extraction.
At STRONGER, we are interested in durable companies: specialist software and digitalisation businesses with loyal customers, recurring or repeat revenue, niche positions and a history of profitable operations. In that context, pricing should make the company stronger without undermining the reasons customers stay.
The best pricing work does three things at once:
- it aligns price with value;
- it protects the customer relationship; and
- it gives the company more capacity to invest in product, people and service.
That is why pricing is one of the areas we focus on with founders. Not because every company needs a dramatic price increase, but because every company needs a pricing system that fits its current value and future ambitions.
A practical pricing checklist for founders
Before making a pricing change, founders should be able to answer these questions.
Value and customer evidence
- What value do customers receive today that they did not receive when pricing was first set?
- Which customers are underpriced relative to usage, dependency, outcomes or support needs?
- Which customer segments are most and least price-sensitive?
- Which features are table stakes, and which features create premium willingness to pay?
- Which customers would face real operational disruption if they switched away?
Model and packaging
- Is our pricing model linked to how customers experience value?
- Are our tiers easy to understand?
- Are we giving away high-value features in low-priced plans?
- Do we have the right enterprise offer?
- Should implementation, support, integrations or compliance requirements be charged separately?
Cadence and governance
- When did we last review pricing properly?
- Do we have an owner for pricing decisions?
- What data do we review monthly or quarterly?
- What discounts are allowed, and who approves exceptions?
- Do our contracts include annual uplift clauses or renewal adjustment rights?
Execution and communication
- Which customer cohorts will be affected first?
- How much notice will customers receive?
- What is the expected revenue uplift, and what churn risk are we willing to accept?
- What will customer-facing teams say when customers object?
- How will we know whether the change worked?
The principle: earn the increase, then implement it well
The right pricing strategy is not always the highest price. It is the price that reflects value, supports the company’s long-term health and can be implemented without breaking trust.
For some businesses, that means annual indexation. For others, it means clearer tiers, better packaging, reduced discounting, new enterprise terms, minimum fees, usage-based expansion or a staged migration of legacy contracts.
The worst option is usually to do nothing because the conversation feels uncomfortable.
Founders often build valuable businesses by putting customers first. Pricing discipline does not contradict that. When done thoughtfully, it protects the company’s ability to keep serving those customers well.
Pricing is not just a number on an invoice. It is a statement about value, confidence and continuity. For founder-run companies, getting it right is one of the most important ways to build a stronger business.
Sources
OpenView, “Pricing Insights from 2,200 SaaS Companies”.
openviewpartners.com (opens in a new tab)McKinsey & Company, “Five strategies to strengthen software pricing models”.
mckinsey.com (opens in a new tab)McKinsey & Company, “Pricing: Distributors’ most powerful value-creation lever”.
mckinsey.com (opens in a new tab)Harvard Business Review, “A Quick Guide to Value-Based Pricing”.
hbr.org (opens in a new tab)Harvard Business Review, “The Good-Better-Best Approach to Pricing”.
hbr.org (opens in a new tab)Price Intelligently by SBI, “2025 State of SaaS Pricing Report — Part 1”.
sbigrowth.com (opens in a new tab)Price Intelligently by SBI, “The State of B2B SaaS Pricing in 2024”.
sbigrowth.com (opens in a new tab)Simon-Kucher, “State of Pricing 2025”.
simon-kucher.com (opens in a new tab)Blue Ridge Partners, “The Price Increase Window Remains Open for Software Companies in 2024”.
blueridgepartners.com (opens in a new tab)Growth Unhinged / PricingSaaS, “What I learned from tracking 443 SaaS pricing pages”.
growthunhinged.com (opens in a new tab)Gartner, “5 Ways SaaS Vendors Are Increasing Costs and What to Do About It”.
gartner.com (opens in a new tab)OpenView, “Usage-Based Pricing: The next evolution in software pricing”.
openviewpartners.com (opens in a new tab)Price Intelligently by SBI, “2025 State of SaaS Pricing Report — Part 2”.
index.sbigrowth.com (opens in a new tab)Simon-Kucher, “Global Pricing Study 2025”.
simon-kucher.com (opens in a new tab)