When the metric is aligned with customer value, everything else—pricing structure, price point, and operationalization—falls into place. Conversely, a misaligned pricing metric can hinder sales velocity, create friction, and erode trust during renewal discussions.
The goal of a SaaS pricing metric is simple:
Yet, even the most carefully selected pricing metric may lose its effectiveness over time. Let’s take the example of Mixpanel, a SaaS analytics company, initially used an event-based pricing metric that worked well for smaller customers. However, as the company grew, the metric led to customer dissatisfaction. Mixpanel transitioned to a Monthly Tracked Users (MTUs) model, which better reflected customer value and simplified pricing conversations.
We’ll explore Mixpanel’s pricing transformation later in this blog, but first, let’s explore the key triggers that signal it’s time to reevaluate your SaaS pricing metric.
Identifying when to revisit your pricing metric requires careful attention to feedback and patterns that emerge as your business evolves. Triggers can vary—ranging from customer dissatisfaction to revenue inconsistencies or market shifts—but each serves as a clear signal that your pricing model may no longer align with customer value. Let’s explore these triggers in detail, starting with the most immediate: customer dissatisfaction.
The first and often most visible sign is customer dissatisfaction. Pricing complaints, frequent discount requests, or higher-than-expected churn are usually the result of customers perceiving a mismatch between the price they pay and the value they receive. When customers feel like they’re being overcharged, it’s a clear indication that your SaaS pricing metric isn’t capturing value as intended.
Take the example of Mixpanel, renowned for its product analytics platform. In 2019, Pranav Kashyap, the Head of Pricing at Mixpanel, shared insights into how the company tackled a growing misalignment in their pricing model leading to customer dissatisfaction.
Initially, Mixpanel charged customers based on the number of events—every user interaction tracked on their platform. This metric worked well with smaller clients, where usage levels were manageable. However, as Mixpanel expanded into the enterprise segment, this approach became problematic.
To address these challenges, Mixpanel transitioned to a Monthly Tracked Users (MTU) model. By tying costs to the number of unique users tracked each month, the new metric better aligned pricing with the value customers derived. The change not only improved predictability and fairness in pricing but also shifted sales conversations to focus on customer outcomes rather than technicalities. As a result, customers felt greater trust in the pricing structure, and churn decreased, creating a stronger foundation for retention and growth.
A good B2B SaaS pricing metric aligns your revenue with the value customers derive from your product. Over time, however, this alignment can fall out of sync. When your revenue doesn’t scale with customer growth or usage, it’s a sign that your metric may no longer be working as intended. Static models, like per-user pricing or flat fees, often fail to align to the value delivered as customers grow or adopt new use cases.
This was the challenge faced by Klipfolio, a B2B SaaS company specializing in business intelligence dashboards. Klipfolio enables businesses to track and visualize key performance indicators (KPIs) through customizable dashboards that integrate with various data sources. Its tools are designed for businesses of all sizes, from small teams to large enterprises, offering accessible and actionable data insights.
Initially, Klipfolio employed a per-user pricing model, which worked for larger enterprises but created barriers for small and medium-sized businesses (SMBs). For SMBs, the per-user model made onboarding additional team members costly, discouraging broader adoption of the platform. This limited Klipfolio’s revenue potential, as it wasn’t able to capture the growing value customers were deriving from the platform.
Recognizing this misalignment, Klipfolio reexamined its pricing model in 2019. They introduced a feature-based pricing model that allowed customers to add unlimited users while charging them based on the features and resources they used, such as dashboards created or premium capabilities accessed. This shift tied pricing to actual usage, removing barriers for growing businesses and allowing Klipfolio’s revenue to scale alongside customer engagement.
The results were compelling::
This change not only improved Klipfolio’s revenue scalability but also strengthened customer trust.
The market doesn’t wait for anyone. Competitors adapt, innovate, and set new benchmarks. When they introduce pricing models that better reflect customer expectations, the rules of the game change. A metric that once worked seamlessly can quickly fall out of favor, leaving you struggling to justify costs to customers who now have access to smarter, more transparent alternatives. This is another key reason why you need to regularly review and adapt your B2B SaaS pricing.
Take the contact center industry as an example. For years, companies like Genesys charged customers based on the number of agents using their platform. This is called per-user pricing, and it’s easy to understand: if you have 50 agents, you pay for 50 user licenses. Simple, right?
Later then, Amazon Connect, a cloud-based contact center service from AWS, challenged this status quo by introducing a usage-based pricing model on March 28, 2017. Instead of billing customers for the number of users, Amazon Connect charged for actual service consumption—$0.018 per minute for inbound and outbound calls. This shift created a competitive stir in the otherwise ossified contact center software market. Costs scaled directly with call volume, aligning customer spending with usage.
Legacy providers like Genesys relying on per-user pricing had to respond, as the radical flexibility of usage-based pricing reset expectations across the industry. In general, companies who cling to outdated metrics don’t just risk losing market share; they risk becoming irrelevant.
This is a prime example that shows how competitors who introduce smarter, more customer-friendly pricing models can force an entire industry to evolve. If you don’t keep up, you risk losing relevance—and your customers.
Pricing is all about how customers feel about the value they’re getting. If your competitors create better pricing models that align more closely with what customers want, you need to adapt—or you’ll get left behind
As your product evolves, so does the way customers use it. A pricing metric that was perfectly suited for an earlier version of your product can become a bottleneck when the product’s complexity outpaces the metric’s simplicity. The result? Your pricing no longer reflects the value customers derive, leaving you underpricing your product—or worse, frustrating your customers..
Some types of security or dev-ops software were previously sold on a "per agent" pricing model, while intuitive in its simplicity, is increasingly challenged by the advent of microservices. Historically, pricing based on the number of deployed agents worked well for monolithic applications or single-instance environments. However, the shift to microservices—where hundreds or even thousands of ephemeral application instances can be spun up and down in real time—has exposed critical limitations in this approach.
Tools such as APM (Application Performance Monitoring) traditionally priced their offerings based on the number of agents deployed to monitor specific application instances. This approach was practical when organizations operated a limited number of well-defined application instances, but as microservices architecture became the norm, it became increasingly difficult for customers to estimate their usage or align it with the vendor's pricing metrics.
One major issue is the difficulty of quantifying the exact number of instances or agents in a dynamic environment. Customers struggle to estimate how many instances they use, leading to delays in the sales cycle and increased reliance on discounting. For sellers, this often results in underutilized pricing power and inconsistent revenue capture. Furthermore, the complexity of defining "agents" or "instances" in microservices environments, compounded by varying definitions across hybrid or virtual systems, has added friction to the pricing process.
To address these challenges, some companies are transitioning to application-based or usage-based pricing models. For instance, pricing per application offers clarity: customers can easily count their applications, simplifying quoting and enabling faster deal closures.
A successful B2B SaaS pricing model hinges on selecting a metric that resonates with customer value and supports scalable revenue. Yet, as Mixpanel, Klipfolio, and others have demonstrated, even well-aligned metrics can lose relevance amidst market evolution, customer demands, and product innovation. Regularly reevaluating your pricing metric is not just a tactical adjustment—it’s a strategic necessity.
By proactively monitoring triggers such as customer dissatisfaction, misalignment between revenue and growth, competitor shifts, and product evolution, SaaS businesses can stay ahead of the curve.
At Monetizely, we specialize in pricing strategy consulting services designed specifically for B2B SaaS companies. Our team of SaaS pricing consultants helps businesses develop tailored software pricing models that not only reflect customer value but also drive predictable, scalable growth. With decades of experience at companies like Twilio, Narvar, and Medallia, we’ve mastered the art of SaaS product pricing that keeps you ahead of market changes and customer expectations. To learn more, you can book your free demo with our SaaS pricing experts today. Also, you can get your hands on our new edition of Price to Scale Vol 2, featuring exclusive insights into how legacy companies have scaled through pricing innovation—and how you can, too.
