💸 Our 6-Step Guide to Pricing (With Case Studies)

You’ve built something valuable. Don’t sell it short. Here's how to price it at what it's worth.

👋 Hey, Chris here! Welcome to BrainDumps—a weekly series from The Founders Corner. Every Thursday, I share unfiltered insights and stories from decades of first-hand experience. It’s a Substack exclusive, inspired by topics in my upcoming book, The Big Book of BrainDumps. Let’s get into it! 👇

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Table of Contents

• Why Pricing Is So Bloody Hard

• Step 1: Start With Customer Value, Not Cost

• Step 2: Map Value vs. Adoption

• Step 3: Segment Your Customers Properly

• Step 4: Choose Your Packaging Model

• Step 5: Set the Price (Intelligently)

• Step 6: Nail the Extras That Influence Price Perception

• Founder Stories: What We've Learned the Hard Way

• Your Pricing Maturity Checklist

• Final Thoughts: Pricing Is Never “Done”

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How to Price and Package Your Software: The Ultimate Cheat Sheet

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Why Pricing Is So Bloody Hard

Let’s not sugar-coat it—pricing is one of the hardest decisions you’ll make as a software founder.

It touches everything: revenue, customer acquisition, retention, perceived value, even fundraising. Get it wrong, and you could underprice your solution into bankruptcy or overprice your way into zero traction.

And yet, most early-stage founders treat pricing like an afterthought.

I get it. It feels like a dark art. One part psychology, one part spreadsheets, and one part blind guessing. But here’s the good news: pricing isn’t magic—it’s a method. And this cheat sheet, shaped by the brilliant Andreas Panayiotou at Notion Capital, gives us a systematic way to get it right.

In this post, we’ll go deep into the frameworks and field lessons that make for great pricing. This isn’t theoretical—it’s built from watching hundreds of SaaS teams learn the hard way.

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Step 1: Start With Customer Value, Not Cost

The golden rule: Price is a reflection of value.

Your job as a founder is to understand how your product creates value—and price accordingly.

Here’s how to get started:

a) Analyse Usage Patterns

Use product analytics tools (Mixpanel, Amplitude, Pendo) to see:

• What features are used most often?

• Where do users spend time?

• What workflows repeat across your top accounts?

b) Talk to Customers

Sit with them. Ask:

• “What feature would you miss most if we took it away?”

• “How does this product save you time or money?”

• “What’s the ROI of using our product?”

One founder I worked with found out that a feature they thought was a minor add-on actually saved enterprise clients 10+ hours a week. It wasn’t priced accordingly. That insight led to a 40% price increase—without churn.

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Step 2: Map Value vs. Adoption

Now take every feature or module and map it on a 2x2 chart:

• Y-axis: Value to Customer

• X-axis: Customer Adoption

Then sort them:

This exercise will change how you see your product.

One startup I advised discovered that their invoice audit tool—used by just 20% of clients—was the most loved feature. It became a separate upsell and grew to 25% of ARR.

The goal is to price based on perceived value, not just utility.

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Step 3: Segment Your Customers Properly

Not all customers are created equal.

If you price for everyone, you’ll delight no one. Instead, segment by:

• Company size (SMB vs. Mid-Market vs. Enterprise)

• Industry (e.g., fintech pays more than edtech)

• Use case (basic tracking vs. full automation)

• Tech maturity (do they integrate or run standalone?)

Quick Example:

We saw one team triple their average contract value by splitting SMB and enterprise tiers—and creating onboarding packages for larger clients.

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Step 4: Choose Your Packaging Model

There’s no universal “best” model. There’s only what aligns with how users perceive and consume your product.

Here are your core options:

a) All-Inclusive

• One plan, all features.

• Pros: Simple to explain.

• Cons: Limits upsell, discourages high usage.

b) Good–Better–Best

• Three tiers with increasing value.

• Pros: Anchors price, helps self-selection.

• Cons: Needs clean feature segmentation.

c) Modular / Functional

• Customers pay for specific modules.

• Pros: Great for complex, verticalised products.

• Cons: Can overwhelm new buyers.

d) Usage-Based

• Pricing scales with API calls, seats, volume.

• Pros: Aligns price to value.

• Cons: Hard to predict costs; requires transparency.

A fintech SaaS we backed moved from seat-based to API volume pricing—revenue doubled in 6 months as customers scaled naturally with usage.

Bonus Combo:

Offer a base tier with add-ons. Combine packaging styles to suit different segments.

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Step 5: Set the Price (Intelligently)

This is where most founders panic.

Here’s how to remove the guesswork:

1. Impact-Based Anchoring

Ask: What value are we creating?

• Time saved

• Headcount avoided

• Errors reduced

• Revenue gained

If your product saves £50k a year, £5k pricing feels like a steal.

2. Buyer Context

Who’s making the call? A CFO needs ROI. A head of ops wants time saved. A product lead wants reliability.

3. Budget Realities

How do your customers budget?

• Quarterly vs. annually?

• Is this OpEx or CapEx?

• Is this a line item or new category?

One HR tech founder raised prices 3x after discovering their customers were using consulting budget—not software budget.

4. Competitive Intelligence

Use benchmarks—but don’t price to match. Price to your value. If you’re 10x better, don’t be afraid to charge 2–5x more.

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Step 6: Nail the Extras That Influence Price Perception

Here’s where the savvy founders separate from the average:

a) Geography

• Price sensitivity varies by region

• Consider local currency and purchasing power

b) Sales Cycle

• Long, committee-led processes need clear ROI models

• Transparent, “click to buy” flows benefit from simplicity

c) Buyer Persona

• Finance wants predictability

• Ops wants flexibility

• Tech wants integration

Customise messaging and pricing visibility accordingly.

A DevOps platform I worked with changed nothing in the product—just repositioned pricing to focus on downtime prevention. Sales cycles shortened by 30%.

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Founder Stories: What We've Learned the Hard Way

Let me get honest for a moment: I’ve seen pricing screw up some truly brilliant companies. And I’ve seen smart pricing turn plodding startups into runaway machines.

❌ What Doesn’t Work:

• Pricing based on competitors (“They charge $99, so we will too”)

• Assuming more features = higher value

• Letting sales teams create custom pricing for every deal

• Ignoring what customers actually use

✅ What Does Work:

• Talking to users constantly

• Raising prices annually (even just 5–10%)

• Pricing based on outcomes, not features

• Packaging that evolves with customer maturity

One portfolio company doubled pricing in a single quarter—and churn didn’t budge. Why? They’d underpriced their core value and trained users to expect too much for too little.

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Your Pricing Maturity Checklist

Ask yourself:

• ✅ Do we know which features users actually value?

• ✅ Can we describe our customer segments clearly?

• ✅ Is our packaging aligned to usage and outcomes?

• ✅ Have we tested different price points?

• ✅ Is pricing discussed monthly—not just annually?

If you can’t tick those boxes, you’ve got work to do.

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Final Thoughts: Pricing Is Never “Done”

Pricing isn’t a one-and-done project. It’s a live, evolving system.

As your product evolves, your value increases. As your customer segments mature, so should your packaging. And as your brand strengthens, your pricing power grows.

So revisit regularly. Test often. Talk to users. Watch usage.

And remember:

You are probably undercharging right now.

Raise prices thoughtfully. Anchor value clearly. Grow into the price tag.

When pricing is done well, it does more than make money. It creates clarity, drives focus, and accelerates the entire company.

Price for value. Package for clarity. Test for growth.

Onward.

—Chris Tottman

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