How to Simplify Pricing Logic in Software

POV: You’re a product marketer. Pricing and packaging just landed in your lap. ❌ No pricing manager. ❌ No budget for a consultant. Just you, Google Sheets, and a vague sense that “we should probably revisit our pricing.” Common scenario at Series A/B: ✅ You’ve found product-market fit. ✅ You’ve grown fast. Now you need to unlock the next level of growth. So where do you start? First and foremost: Don’t try to fix everything. Pricing touches everything. Before you jump in, understand what you can impact. HubSpot’s Sam Lee breaks pricing into 3 key areas: 1️⃣ Product Monetization: pricing metrics, plan design, packaging. 2️⃣ Commercial Strategy: discounting, sales enablement, channel pricing. 3️⃣ Back Office: Governance, analytics, decision-making flow. I’ll add one more: 4️⃣ Pricing plumbing: tech stack from CPQ through billing. Odds are, you can safely ignore 2️⃣ through 4️⃣ (for now). You probably can’t overhaul your quote-to-cash flow, redesign your deal desk, or implement new billing software. But Product Monetization? That’s where you can move the needle. Here’s how I’d tackle it (in order): Start with packaging. Look at your current plans. For each one, ask: • Does this plan solve a distinct job? • If you were the ICP, would your tiers make sense? This alone can uncover big wins. Often, just simplifying plans can improve conversion or help your sales team tell a better story. Next, take a closer look at features. An easy approach is the value matrix. It maps each feature by: • Relative preference (how much people want it) • Willingness to pay (how much they’d pay for it) You’ll end up with: → Core features: everyone expects them, no one’s paying extra. → Value drivers: people want them and will pay for them. → Add-ons: not for everyone, but high value for a niche. The last one is where most SaaS companies leave money on the table. From there, review usage thresholds. Even if you can’t change your pricing metric (heavy lift), you can still adjust thresholds. Look at usage caps across plans: • Are they aligned with actual customer usage? Competitor research helps here. Find arbitrage opportunities where you can offer more value for the same price or better align value with consumption. Lastly, look at price points. Yes, actual prices come last. Once your packaging, features, and thresholds are dialed, you can ask: • How do we want to be positioned in the market? • Which plan should be the hero (and are we making that clear)? A 10% price bump won’t fix a confusing plan structure. But a well-designed plan can make a higher price feel like a steal. In summary: ✅ Control the controllables. ✅ Think like your customer. ✅ Reassess feature bundling. ✅ Pressure-test your thresholds. ✅ Only then play with price points. You don’t need to be a pricing expert. You just need to use your product and marketing instincts. (And maybe pretend to be your ICP for a day.)

90% of SaaS companies overcomplicate their pricing. (And it’s hurting their business) When I do a SaaS audit, I always look at the homepage and the pricing page. Why? Because these are the most important pages of any SaaS website. The homepage should tell: → What you do? → For whom do you do it? → What problem do you fix? → Why does that even matter for the user? From there, most users go to check the pricing page. They want to know what the investment is, right? The pricing page should: → Show the price → Build trust and authority → Answer important questions → Make it super easy for users to convert. Make sense, right? The problem? 90% of SaaS companies overcomplicate their pricing model. They: → Have 4 or 5 plans. → Create stackable modules. → Add calculators to calculate the price. → Have their pricing models all mixed-up. → Show 10s of features per plan that make no sense. And the list goes on and on. These kinds of pricing models drive users away. Users don’t have time to go through a complex pricing model. They want to know what they have to pay and what they will get for it in return. Here’s how I would do it: 1. Align pricing with your value Make sure your pricing reflects your product’s value. Don’t just undercut competitors, talk to users. Ask what feels like a bargain and what’s too much. 2. K.I.S.S. Keep it simple. If you use tiered pricing, stick to 2–4 clear options. Too many choices confuse users. 3. Use a ‘Good-Better-Best’ model Show tiers from good to best, for example: Basic, Pro, Premium. This helps customers choose what fits their needs and budget. 4. Pricing based on usage or seats (if relevant) Usage-based or per-seat pricing makes scaling natural for your customers and aligns cost with their growth. More usage or more seats means a higher price. 5. Make ROI clear. Show the customer the return on investment. For example: “Save 10 hours per week” or “Increase revenue by 20%.” No data? Highlight key outcomes your product delivers. 6. Test and adjust Always test and refine how you communicate pricing. Don't refine the pricing, but the way you communicate it. Frequent pricing changes create unnecessary challenges. In essence, your pricing should be: → Transparent. → Easy to grasp. → Showing the ROI. Great pricing isn't about $$$ It's about being clear, transparent and trustworthy. Want your pricing to be crystal clear? That’s what we tackle in The SaaS Growth Program. DM: “GROWTH” and I’ll tell you more!

I used to spend days building pricing models; today I can draft data-backed pricing plans in under an hour with these five focused ChatGPT prompts. Below is the exact workflow I use. I will use an example of an imaginary software product- an AI site builder that converts plain-language prompts into complete web pages. Head to ChatGPT, set the model to o3, switch on Deep Research and follow along. 1️⃣ Define Baseline Plans & ICP “We're launching an AI site builder that turns prompts into web pages. Give me starter tiers, spell out the ICP for each, and propose initial prices.” Outcome: A rough scaffold of plans, audiences, and ballpark numbers to work with. 2️⃣ Competitive Check “Benchmark those tiers against top competitors and price us approximately 20% lower to reflect new-entrant positioning.” Outcome: Competitive sanity check that signals value without racing to the bottom. 3️⃣ Calibrate the Value Metric “Plans are capped by page count. Research how many pages each ICP typically needs and adjust the limits.” Outcome: Usage caps grounded in real-world demand, so you don’t choke growth or leave money on the table. 4️⃣ Validate Unit Economics “Using GPT-4o, estimate average tokens per page across ICPs, ensure AI costs stay < 30% of revenue, draft a fair-usage policy, and compare margins if we downgrade to GPT-4o-mini.” Outcome: Clear visibility into COGS and margin levers before you go live. 5️⃣ Introduce Usage-Based Credits “Replace the flat FUP with credits: 1 credit = 1 generated page. Bundle credits per tier and set overage pricing.” Outcome: Alternative pricing model with easier upsells. That's all folks! Tweak these prompts for your own product and your pricing strategy is sorted. Give it a try and let me know how it goes in the comments. Happy to help if you get stuck.

If you can’t explain your pricing in a sentence, you’re in trouble. We were. At Thunder Compute, our first pricing model—an hourly rate plus usage—seemed smart on paper. But once customers asked, “So… how much will I actually pay?” we realized our answer, “it depends,” only confused them more. And confused customers don’t buy. While we were focused on simplifying cloud GPUs, our pricing unintentionally made things more complex for our customers. So we listened carefully to our customers and switched to a flat hourly rate; simple, transparent, and 70% lower than our competitors. The response was immediate: customers stopped thinking about pricing and started using our product. Two lessons emerged: 1. Simplicity sells. When pricing feels like a math problem, customers walk away. 2. Feedback is gold. The faster you learn your first idea is wrong, the faster you get it right. Whether you're selling enterprise software or coffee beans, keep it simple. If you can't explain your pricing in one breath, neither can your customers.

🧠 “We’re losing control of our pricing.” That was the first sentence from the Sales Director of an FMCG company I worked with. They sold great products — but their pricing? ❌ No clear differentiation between retailers, wholesalers, and modern trade ❌ Sales reps were manually adjusting discounts ❌ Freight and taxes applied inconsistently ❌ Finance flagged posting issues weekly Margins were leaking. Customers were frustrated. Something had to change. 🔍 Step One: Understand, Don’t Configure Instead of jumping into SPRO, I started with business discovery: ✅ What defines each customer type? ✅ How are discounts supposed to work? ✅ Who pays freight, and when? ✅ What pricing logic is already failing? This shaped the SAP solution we built. 🛠️ What We Did in SAP SD (In Simple Terms) 🔹 Designed a new pricing procedure tailored for each customer group 🔹 Used Customer Pricing Groups to separate logic for Retail, Wholesale, and Modern Trade 🔹 Automated: Trade discounts for retailers Volume-based pricing for wholesalers Contract-based deals for modern trade 🔹 Applied tax and freight automatically based on location 🔹 Aligned FI postings using VKOA — so no more reversals 🔹 Enabled rebate tracking, but only for eligible long-term partners Everything was built to reflect real business strategy, not just technical best practices. ✅ The Result? ✔️ Manual price adjustments dropped by 85% ✔️ Finance got clean GL flows ✔️ Sales team stopped firefighting pricing ✔️ Customers finally got consistent, channel-specific pricing 💡 My Takeaway? > Pricing procedure isn’t about condition types. It’s about translating business goals into system logic that works across operations, finance, and customer experience. 💬 If you’re building or restructuring SAP SD pricing in your organization — I’d be happy to exchange insights and share what worked on ground. #SAPSD #PricingProcedure #SAPCaseStudy #FMCG #SAPConsultant #OrderToCash #SAPS4HANA #DigitalTransformation #ERPStrategy #BusinessValue