70% of SaaS companies could raise prices without hurting sales (OpenView). Why you're charging too little, what it costs you, and 4 steps to fix it this week.
Nearly 70% of SaaS companies believe they could raise prices without significantly impacting sales volume, according to OpenView's SaaS Benchmarks report. Seven out of ten — and they know it. They just don't do it. You're probably in that group. Here's the proof, what underpricing actually costs you, and four steps to fix it this week.
Why smart professionals underprice
The obvious answer is fear. Fear that nobody will pay. Fear of looking greedy. Fear of losing the few customers you have. But the real reason goes deeper: most people price based on what they'd pay, not what their customers would pay. You look at your product, think about your own budget, and set a price that feels comfortable to you.
That's backwards. And you know it's backwards — because you'd never make that mistake in corporate. You'd never price a product based on your personal budget. You'd price it based on the value it delivers to the customer. But somehow, when it's your product, the rules change. The confidence disappears.
You're not your customer. You're someone building on the side, watching every euro. Your customers might be companies that spend €500/month on office coffee without blinking. Or professionals whose time is worth €200/hour, and your tool saves them 10 hours a month.
When I teach at Porto Business School, I see this with every cohort. Smart, capable people — people who ran departments and managed budgets — who build real value and then price it at €9/month because that's what they'd pay for a Spotify subscription. A Spotify subscription is not your product.
The real cost of underpricing
Here's what nobody tells you about charging too little — in numbers:
| What happens | The data |
|---|---|
| You attract the wrong customers | Customers acquired through heavy discounting are 62% more likely to churn within the first year (ProfitWell) |
| You can't invest in the product | Companies charging 40% below market rates invest 35% less in R&D and support (Tomasz Tunguz, Redpoint Ventures) |
| You signal low quality | Customers use price as a direct proxy for quality in SaaS (Journal of Consumer Research) |
| You can't raise prices later | Price increases above 20% trigger churn spikes of 15–30% |
Cheap customers are the most demanding and the least loyal — they'll leave for the next cheap option the moment it appears. Less revenue means less investment, which means a worse product, which means more churn. It's a death spiral. And when you charge €9/month, you're not saying "I'm accessible." You're saying "I'm not very good."
The numbers that changed my mind
When I was pricing the ADAPT Methodology, I spent weeks at the low end. Transformation engagements for €10,000–20,000. Seemed reasonable. Felt safe. You know this feeling — you've watched companies you worked for underprice themselves into a corner, and seen what happens when the strategy is "win on price" instead of "win on value."
Then I looked at the data. A study by Bain & Company found that SaaS companies that clearly articulate and quantify their value command prices 25–45% higher than those that don't. The difference isn't the product. It's the confidence to name the value. Harvard Business School research showed that a 1% improvement in pricing leads to an 11% increase in operating profit. Not 1% more profit — eleven percent. Pricing is the single highest-leverage thing you can do in your business. And here's the kicker from ProfitWell: people who have a very positive impression of a brand are willing to pay 25–30% more than what they're actually paying. Your best customers — the ones who love you — are already willing to pay more.
I tripled my pricing. Not gradually — I tripled it. And you know what happened? I got better clients. Fewer, yes. But they were more committed, less demanding, and stayed longer. Revenue went up. Stress went down. After years of having someone else decide what your time is worth, this is the part that feels different: you set the number. You decide the value.
How to know you're charging too little
A quick diagnostic. Be honest with yourself. You're almost certainly underpriced if:
- Customers say yes too quickly — no hesitation, no negotiation, immediate buy. That's not validation; that's money left on the table.
- Everyone tells you it's "affordable." When 100% of buyers praise your pricing, the price is wrong.
- You can't afford to support your customers properly. If you're cutting corners on support, documentation, or development because revenue is tight, your price is the problem — not your effort.
- Your competitors charge 3–5x more for a similar product. Some price differentiation is strategy. A 5x gap is fear.
You might be priced right if about 10–20% of serious prospects say "that's expensive" — but still buy; if you lose some deals on price but win on value; and if you can afford to reinvest 20%+ of revenue back into the product. That 10–20% discomfort zone is where healthy pricing lives.
What to do about it (this week)
I'm not going to tell you to 10x your prices overnight. That's guru nonsense. But here's what I'd do this week:
- Calculate the value you deliver. Hours saved. Revenue generated. Risk avoided. Put a number on it — you've built business cases before; this is the same skill applied to your own product.
- Price at 10–20% of the value you create. If you save a customer €1,000/month, you should charge €100–200. Not €19. Starting from scratch? Use the zero-data pricing framework.
- Raise your current price by 20% for all new customers. Keep existing customers where they are for now.
- Watch what happens. If nothing changes — if customers keep signing up at the same rate — raise again in 90 days, and track the effect in the metrics that actually matter.
The catch
Yes, some people will leave. Some prospects will say no. That's the point. If you never hear "that's too expensive," you'll never know what your product is actually worth. And you'll spend years building a business that generates revenue but never profit.
The discomfort of charging more is temporary. The cost of charging too little is permanent. You didn't leave the safety of a corporate salary to build another job that doesn't pay you what you're worth. You built something valuable. Price like it.
Frequently asked questions
How do I know if I'm charging too little?
The clearest signals: customers say yes instantly with zero negotiation, 100% of buyers call your price "affordable," you can't afford proper support, or competitors charge 3–5x more for a similar product. Healthy pricing means 10–20% of serious prospects say "that's expensive" — and buy anyway.
How much should I charge for my SaaS?
Price at 10–20% of the value you create. If your product saves a customer €1,000/month, charge €100–200 — not €19. Calculate hours saved, revenue generated, and risk avoided, then put a number on it.
Will raising prices make my customers leave?
Some — and increases above 20% trigger churn spikes of 15–30%. That's why the safe play is raising 20% for new customers only, keeping existing customers where they are, and raising again in 90 days if signups hold steady.
Does a low price really signal low quality?
Yes. The Journal of Consumer Research found customers use price as a direct proxy for quality when evaluating SaaS. A €9/month price doesn't say "accessible" — it says "not very good."