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But the truth is that most SaaS pricing problems are not pricing problems at all—they’re product positioning problems.
Positioning establishes the perception of value in the customer’s mind, and pricing extracts that value. Without clear positioning, even the best enterprise pricing strategy will fail. This blog explores why positioning is foundational to pricing success, the symptoms of poor positioning, and how SaaS companies can course-correct.
Positioning is not what you do to the product—it’s what you do to the mind of the prospect. It defines how your product is perceived in the market and how it’s differentiated from competitors. Positioning answers a couple of key questions:
Without clear answers to these questions, customers struggle to see the product’s value.
Let us take an example, Medallia, a leader in the Customer Experience Management SaaS category, faced growing competition as rivals began replicating its value propositions. This story dates back to 2013 and 2014, when Medallia had recently gone through a series of funding rounds and was gaining traction in the market. Despite its leadership position, this made it harder to justify Medallia’s premium pricing, especially when prospects questioned what set it apart.
To address this, Medallia created a marketecture—a market-oriented product architecture that broke its platform into distinct modules, each with its own name and value story. One standout module was named “OrgSync”, which highlighted Medallia’s unique capability to map complex organizational hierarchies for large enterprises. Supporting up to 70,000 users, OrgSync demonstrated Medallia’s ability to handle challenges competitors could not.
By turning this hidden technical feature into a clear unique selling proposition (USP), Medallia effectively communicated its value to enterprise customers. This clarified why Medallia was worth the premium price and gave the sales team the tools to confidently address objections, reinforcing the brand’s differentiation in the market.
This example shows how positioning is about shaping customer perceptions.
In SaaS, positioning doesn’t just define how a product is seen; it creates the foundation for pricing strategies that resonate with customers and drive growth.
SaaS pricing struggles are often misdiagnosed as standalone issues. In reality, they are usually symptoms of deeper positioning problems. Here are the most common ones:
When customers can’t clearly see how your product solves their specific problems, they struggle to justify its value. This lack of clarity leaves a void that customers instinctively fill by focusing on price. If the benefits aren’t obvious, cost becomes the primary factor in their decision-making.
For example, consider a SaaS platform marketed as a “comprehensive productivity tool.” While technically accurate, the description fails to communicate its real-world impact. Customers are left wondering, “How does this help me? Why should I pay for this?”
Now, contrast this with precise messaging:
“Our software combines data from multiple sources into a single, easy-to-use dashboard designed to fit your workflow. This helps you reduce reporting time by 60%, saving your team 15 hours a week.”
Here, the value is not only clear but also quantified. By directly addressing the customer’s pain points, this narrative shifts the conversation from “Is it worth the price?” to “Can we afford not to buy this?”
Without clarity, customers perceive little differentiation between your product and competitors, causing them to fixate on cost. This confusion often cascades into high price sensitivity and resistance.
When customers don’t perceive the full value of your product, they resist paying full price. Offering discounts might seem like an easy fix to close deals, but it signals a deeper issue: your product’s value and pricing don’t align with customer needs.
This can also lead to shelfware—when customers purchase packages that include features they don’t need, leading to dissatisfaction and churn.
Let’s take the example of a company where I used to work, Narvar.
Narvar specializes in post-purchase retail/merchant consumer experiences.
When I joined the company in 2019, it initially struggled with a rigid tiered pricing model (later we had resolved this). The problem arose because the company’s pricing tiers failed to reflect the distinct needs of its customer segments. Smaller businesses often needed minor add-ons—costing $3,000–$5,000—but the poorly designed tiers forced customers to upgrade to an enterprise-tier package, which would have caused a 50–60% increase in price for these customers.
This misalignment left smaller companies with packages that exceeded their needs, while sales teams resorted to heavy discounting to make deals work, which created two major issues:
Narvar resolved these issues by redesigning its pricing structure to offer flexible, incremental pricing options. This allowed customers to scale their usage without being forced into higher-priced plans. As a result, the reliance on discounts decreased, shelfware was minimized, and ASPs increased, all while improving customer satisfaction and retention.
Positioning issues often start inside the organization, long before they reach the customer. When teams across sales, marketing, and product don’t share a unified understanding of what the product is or who it serves, confusion ripples outward.
Back in 2018, I was working at a startup that offered chat-based customer service software. The product was built around advanced AI-powered chatbots and an intuitive chat widget, offering businesses an innovative way to automate customer support. But as we prepared to scale, we faced a fundamental challenge: how should we position the product?
My boss and I believed the answer was clear. By framing it as a Conversational-AI Customer Service Platform, we could emphasize the product’s unique AI capabilities and carve out a strong niche in the crowded customer service software space. This positioning would resonate with our ideal buyer and make it easier to communicate the product’s value.
However, the CEO aimed to position the product as a competitor to CRM giants like Salesforce, even though it lacked the core functionalities of a CRM at the time. This misalignment led to confusion in sales messaging, hindered the ability to target the right customer segments effectively, and delayed the adoption of a cohesive pricing strategy tailored to its true value proposition.
Markets evolve, customers change, and what worked yesterday may not work tomorrow. Positioning is not a one-and-done exercise—it’s a living strategy. When positioning is unclear internally, the effects can be profound. Everyone in the company must speak the same language about what the product is, who it serves, and why it matters. When alignment happens, the market listens. Without it, even the best pricing strategy will falter.
Conduct regular audits of your ICPs, messaging, and pricing tiers. Ask hard questions: Are we still solving the right problems? Are our customers still seeing the value we promised? If the answers aren’t clear, it’s time to refine.
When you get positioning right, pricing becomes a lever for growth, not a roadblock. Customers see the value, align it with their own goals, and feel confident paying for what you deliver. That’s the power of positioning—it transforms pricing from just a number on a page into a reflection of trust and value.
If you’re facing challenges with your SaaS pricing strategy—whether it’s aligning pricing with customer needs, reducing discounting, or creating flexible tiers—Monetizely can help. We specialize in solving complex SaaS pricing problems. Book a free 30-min consultation with our experts today to learn how we can refine your B2B SaaS pricing strategy for success.
