A coherent SaaS mix organises access to value, upgrade paths and service cost over time.
A coherent SaaS mix organises access to value, upgrade paths and service cost over time. Monthly price alone is insufficient: usage limits, features, seats, integrations, support and annual commitment select customers and simultaneously change conversion, expansion and churn. Packaging must therefore be evaluated as an architecture of future flows.
Decision and method.
Change an offer or plan boundary only when expected contribution per customer improves without shifting costs artificially into support or churn. Link every feature or limit to a customer-value mechanism, supplier cost and segment; boundaries with no economic rationale are candidates for simplification. Reconstruct net price including annual discount, credits, free allowances, months free and average expansion, then relate recurring revenue to actual consumed capacity. Use LTV = monthly margin ÷ monthly churn only as an approximation for relatively stable cohorts, and publish an observed-survival scenario. Simulate acquisition, upgrade, downgrade and churn after a change; forced migration is acceptable only when contribution gain exceeds plausible retention loss.
Worked example.
Team charges €89, retains 75% margin after service, has 2.8% monthly churn and €900 CAC. Pro charges €149, retains 70% margin, has 1.8% churn and €1,800 CAC. Simplified Team LTV: 89 × 75% ÷ 2.8% = €2,384, or 2.65× CAC. Pro: 149 × 70% ÷ 1.8% = €5,794, or 3.22× CAC. Price alone would hide retention. Pro may receive more acquisition if observed churn remains stable and onboarding does not cross a capacity step.
Checks and limits.
Each plan boundary maps to documented value and cost; margin includes variable infrastructure, onboarding, support and customer success; retention is measured by plan, cohort, segment and tenure; upgrade, downgrade and churn are simulated before forced migration. Margin divided by churn assumes stability that is rarely perfect. Annual contracts delay churn visibility and can mask dissatisfaction; a simple individual LTV misses network and referral effects.
Resources and sources.
Download the SaaS packaging model. Related: rationalise a range, design price tiers, value B2B contracts. Sources: Gupta, Lehmann and Stuart (2004); Moorthy (1984); Fader and Hardie (2009).