Challenge: Stagnant Revenue and High Customer Churn Due to Value-Based Pricing Misalignment
Solution: A Data-Driven Pricing Strategy and Packaging Redesign
Results: 40% Increase in ARR, 25% Reduction in Churn, and 15% Higher Customer Lifetime Value (LTV)
Introduction
The B2B SaaS market is fiercely competitive, with pricing being the primary lever for growth and profitability. Many companies struggle with legacy pricing models that fail to capture the true value they deliver, leading to revenue leakage and customer dissatisfaction.
This case study details how our consulting firm partnered with a B2B SaaS scale-up in the MarTech space to completely overhaul its pricing strategy, transitioning from a cost-plus to a value-based model that dramatically accelerated growth.
Client Background
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Sector: B2B SaaS (Marketing Automation)
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Profile: 5-year-old company with a strong product-market fit, 500+ SME customers.
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Primary Challenge: Despite a superior product, revenue growth had plateaued at 10% YoY. Sales cycles were long, and customer churn was alarmingly high at 3.5% monthly, primarily at renewal.
The Core Challenges
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One-Size-Fits-All Pricing: A single, feature-bloated package priced per user failed to appeal to different customer segments.
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Value Misalignment: Pricing was based on cost-plus, not on the significant ROI ($5-$7 return for every $1 spent) customers achieved.
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High Perceived Cost: The entry price point was too high for prospects, and power users felt they were overpaying for features they didn’t use.
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Ineffective Discounting: The sales team lacked guidance, leading to inconsistent and excessive discounting that eroded margins.
Our Approach: A Three-Pillar Strategy
Phase 1: Deep Customer Value Discovery
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Conducted Willingness-to-Pay (WTP) surveys with 200+ prospects and customers.
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Performed conjoint analysis to identify which features different segments valued most.
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Mapped the economic value drivers of the product to quantify its ROI for use in sales messaging.
Phase 2: Competitive & Market Benchmarking
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Analyzed the pricing and packaging of 12 direct and indirect competitors.
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Identified a white space in the market for a mid-tier package focused on core value-driving features.
Phase 3: Strategy Design & Implementation
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Segmented Packaging: Designed three tiered packages (Good, Better, Best) based on feature usage and value metrics, moving beyond per-user to a hybrid per-user + usage-based model.
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Value-Based Price Anchoring: Set prices based on a % of the quantified ROI, justifying a 20% price increase on the top tier.
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Sales Enablement: Created a new pricing playbook, battle cards, and ROI calculators to arm the sales team with a value-selling narrative.
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Price Execution: Implemented the new model via Stripe and Salesforce, with a clear migration path for existing customers.
Quantifiable Results Achieved
| Key Performance Indicator (KPI) | Before | After (12 Months) | Improvement |
|---|---|---|---|
| Annual Recurring Revenue (ARR) | $8 Million | $11.2 Million | 40% Increase |
| Monthly Customer Churn | 3.5% | 2.6% | 25% Reduction |
| Average Revenue Per User (ARPU) | $125 | $155 | 24% Increase |
| Sales Cycle Length | 68 days | 52 days | 24% Reduction |
Additional Benefits:
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15% increase in Customer Lifetime Value (LTV).
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Win rates increased by 18% due to a more compelling value proposition.
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Sales team morale improved with clear guidance and higher commissions.
Conclusion
This engagement proves that a scientific, value-based approach to pricing is not just a tactical exercise but a fundamental growth strategy that can dramatically improve SaaS metrics across the board.
Ready to Optimize Your SaaS Pricing?
📩 Contact our Pricing & Revenue Management specialists for a confidential audit of your pricing strategy.
© RNG Strategy Consulting – Pricing & Growth Excellence