Choosing the right pricing model for a SaaS product isn’t just about revenue. It shapes user behavior, growth potential, retention, and even brand perception. Among the most popular pricing strategies are pay-per-user and pay-per-feature models. Each comes with unique strengths and challenges. In this article, we’ll go deep into the data behind these two models using 30 compelling stats — and for each, we’ll break down what the numbers mean for your business, how to apply the insights, and what to watch out for.
1. 63% of SaaS companies offering both pricing models reported higher revenue per user with pay-per-feature
Why This Matters
Revenue per user isn’t just about making more money — it’s a sign that your pricing matches how customers value your product. When 63% of companies using both models report better returns from pay-per-feature, that says something important: users are willing to pay more when they feel in control of what they’re buying.
With pay-per-feature, users don’t feel forced into one-size-fits-all plans. Instead, they pay for what they need, and nothing more. This leads to a better fit between product usage and pricing, which usually results in higher satisfaction and less resistance to spend.
How to Use This Insight
If you’re currently only offering user-based pricing, start by testing add-ons or premium modules. Pick features that solve painful, specific problems — those are easier to justify paying for.
Talk to your customers. Ask which features they value most, and which ones they’d be open to buying separately. This helps you shape your feature pricing to real needs, not guesses.
Also, don’t be afraid to experiment. Test pricing on a small group before rolling it out. Track what changes — especially in revenue per account. If it goes up without hurting adoption, you’re on the right track.
2. Companies using pay-per-user pricing saw a 25% higher adoption rate among small teams
Why Small Teams Prefer It
Small teams often want simplicity. They don’t have time to compare features or worry about picking the right modules. Pay-per-user pricing gives them that clarity. They know what they’re paying for: every user gets full access, no guessing needed.
This helps drive quicker decisions. A startup looking at your product will be more likely to say yes if they know that every team member can jump in without extra math.
Another reason small teams prefer it? Predictability. They don’t want surprises in their bills. When it’s priced per user, the cost scales naturally as they grow — and that feels fair to them.
Turning This Into Action
If your product is trying to grow its user base among startups or small teams, offering a clear pay-per-user plan can reduce friction. Make sure it’s simple. Don’t overcomplicate it with too many user tiers or gate-kept tools.
You can also offer discounts for very small teams — say, 1 to 5 users — to encourage sign-ups. These smaller customers may grow into bigger ones later. And if they’re happy with your product now, they’re more likely to stay as they scale.
Finally, make sure your product is truly collaborative. If a team signs up for a per-user plan but only one person gets real value, churn will follow. Ensure every seat delivers strong ROI.
3. 48% of enterprise clients prefer pay-per-feature pricing for greater control over costs
Why Enterprises Think Differently
Enterprises have different needs than small teams. They often manage dozens or even hundreds of users. If each one is charged individually, pricing can balloon fast — even if only a few are using core features. That’s why almost half of enterprise buyers prefer feature-based pricing.
They want control. They want to buy specific capabilities for specific teams. For example, a company might only need advanced analytics for its data team, while the rest of the org uses basic reporting. Feature pricing lets them tailor costs to real use.
This control is also critical for budgeting. In large organizations, pricing must go through approvals. When they can line-item features instead of explaining user growth, approvals go faster.
How to Leverage This
If you’re selling to enterprises, structure your pricing to allow flexibility. Offer base plans with essential features, and let teams add specialized capabilities. Think of these like tools in a toolbox — each one should solve a clear job.
You can also create bundles for common team types — like a marketing bundle, an operations bundle, or a developer add-on. This simplifies the purchase without losing the value of feature-based pricing.
During your sales conversations, highlight how feature pricing reduces waste. Emphasize how it aligns spend with real usage. This helps procurement teams justify the expense and makes you easier to buy.
4. Pay-per-feature models led to 30% higher upsell conversion rates on average
Why Upsells Thrive in Feature-Based Pricing
Upselling is the engine behind strong revenue growth in SaaS. It’s not enough to land a customer — you want them to grow with your product. And that’s where pay-per-feature models shine. Why? Because they create natural upgrade points.
Think about it: when a customer outgrows their current toolset or needs a new capability, you’re not forcing them to jump to a whole new pricing tier. You’re offering them one more useful tool — just what they need, exactly when they need it. That offer feels more like help than a hard sell.
This subtle shift makes a huge difference. When upsells are tied to real needs instead of broad plans, users convert more. A 30% lift in upsell conversions isn’t just good — it’s transformational for revenue over time.
How You Can Apply This
Start by identifying your most common upgrade triggers. Do users need extra analytics as they scale? More integrations once they hit a certain team size? Look at your top accounts and when they expanded — the clues are there.
Once you know the triggers, align your features to match them. Package those features so they feel like logical next steps. And don’t hide them. Feature-based upsells work best when users can see what’s possible — even if they haven’t unlocked it yet.
Also, make the upgrade process seamless. Don’t make them talk to sales or go through paperwork. A simple “click to add” can make the difference between an interested buyer and a lost one.
Lastly, use in-app prompts. If someone is bumping into limits or trying to access a locked feature, show them the benefit of unlocking it. Make the upgrade feel like progress, not punishment.
5. Churn rates for pay-per-user pricing average 18% higher in startups targeting SMBs
The Real Risk of User-Based Pricing in Smaller Markets
Small businesses run lean. Every dollar counts. So when you price by user, you’re often asking them to pay more than they need to. Even if just one person uses the tool heavily, they’re still paying for seats they don’t fully use — and that can start to feel wasteful fast.
That’s why churn is nearly one-fifth higher for per-user pricing in the SMB space. These businesses are constantly reassessing costs. If your pricing feels mismatched or too rigid, you’re at risk. And that risk compounds over time.
SMBs also grow and shrink quickly. New hires come in, others leave. Having to add or remove seats frequently creates friction. The less flexible your pricing feels, the more likely they are to jump ship for a simpler model.
What You Can Do About It
If you serve SMBs, consider using a usage-based or feature-based pricing model — or at least offering it as an alternative. Let them pay for what they use, not how many people they have. This feels more aligned with their mindset.
If you stick with per-user, make it flexible. Offer easy seat management, prorated billing, and clear downgrade options. The easier you make it for them to control costs, the more likely they are to stay.
You should also watch for signs of account underuse. If a customer is paying for five users but only one is active, that’s a red flag. Reach out with better-fitting plans. Sometimes saving them a few dollars today wins you years of loyalty.
And remember — value matters more than cost. Make sure every user feels like they’re getting true value. Whether that’s access, speed, or outcomes, that experience needs to match the price.
6. 57% of SaaS buyers perceive pay-per-feature as more “value-aligned” than per-user
Why Perception Drives Pricing Success
Perception is reality. If your customers believe your pricing reflects real value — not just usage or headcount — they’re more likely to buy, stay, and upgrade. And more than half of SaaS buyers say feature-based pricing hits that value alignment better.
Why does this perception matter so much? Because it changes how buyers justify the expense. When a buyer sees a clear link between a feature and an outcome, the price feels earned. They can take that logic to their CFO, their manager, or their board. It just makes sense.
With per-user pricing, that link can feel fuzzy. Why pay more just because more people need access? If the feature set stays the same, the price increase can seem arbitrary — especially in cross-functional teams where not everyone uses the tool equally.
How to Build Value Perception into Pricing
Start by mapping your features to outcomes. What problem does each feature solve? How does it make life better, easier, or faster for the user? Build your pricing around those outcomes — not just access levels.
Next, communicate clearly. When a customer looks at your pricing page, they should instantly understand what they’re paying for and why. Avoid jargon. Stick to benefit-driven descriptions.
If you use a feature-based model, explain it. Make it obvious that buyers only pay for what they need. That clarity builds trust, and trust drives action.
Finally, reinforce the value after purchase. Show users what they’re getting. Highlight their progress, their savings, their efficiency gains. Keep that value front and center — because if they forget it, churn is just around the corner.
7. 41% of product-led SaaS firms using pay-per-feature showed >30% annual growth
The Link Between Product-Led Growth and Feature-Based Pricing
Product-led growth (PLG) companies depend on the product to do the selling. There’s less focus on sales calls or demos. Users sign up, use the product, and expand based on their experience. In this model, pricing can’t be a blocker. It needs to help — not hinder — that journey.
That’s why 41% of PLG companies using pay-per-feature pricing report over 30% growth annually. The flexibility of pay-per-feature matches how users explore the product. They start with the basics. Then, when they see value, they unlock more. It feels organic.
In contrast, per-user pricing can slow things down. A user may want to invite a teammate, but if that adds cost, they might hesitate. That breaks the flow and limits organic adoption.
How to Match Your Pricing to PLG
If your company is built on product-led principles — self-serve onboarding, easy adoption, freemium tiers — your pricing must support that flow. Feature-based models are ideal because they allow customers to grow usage at their own pace.
Here’s how to make it work:
- Start with a generous free or low-cost tier that gives a real taste of the product’s power.
- Clearly show what users can unlock next. These upgrades should feel like natural steps, not big jumps.
- Make sure users hit key value moments before upselling. The timing of feature unlocks should match the user’s needs — not just your revenue goals.
Track usage closely. When a user bumps up against a limit or tries to use a locked feature, that’s your signal. Use in-product nudges to prompt upgrades based on that exact moment. It feels relevant — not pushy.
Pay-per-feature pricing in a PLG environment works best when it feels like leveling up, not hitting a paywall. The better you align pricing with the user journey, the faster your growth.
8. Teams with over 50 users saved an average of 22% using pay-per-feature pricing
The Efficiency of Scaling by Feature Instead of Headcount
As teams grow, their software needs change. But not every user needs the same tools. In large teams, usage can vary wildly. Some users log in daily, while others barely touch the platform.
When companies use pay-per-user pricing, they’re often paying for access that isn’t being used. That creates waste — and frustration. That’s why large teams report saving an average of 22% when switching to feature-based pricing. They’re finally able to match spend with actual value.
Why This Saving Matters
In big teams, even a small per-user fee adds up quickly. Multiply that by 50, 100, or 300 users, and you’re talking serious cost. That’s money that could be spent elsewhere — on training, marketing, hiring.
By shifting to pay-per-feature, teams can buy tools only for those who need them. Maybe your data team needs advanced exports, while others just view dashboards. Or maybe your customer support reps need automation tools, but your product team doesn’t. Feature pricing lets you tailor access.
This flexibility also supports growth. Teams can add users without instantly growing the bill. That removes barriers to collaboration and helps avoid internal debates about “who really needs a seat.”
How to Structure Pricing for Large Teams
If you serve midsize or enterprise clients, design your plans to reflect diverse needs. You can still have a base user fee if needed, but reserve premium tools as paid add-ons.
Offer role-based bundles. These can map to job functions — sales, support, analytics — each with the tools that role needs most. This makes purchasing decisions easier and faster.
Also, be transparent. Show the customer how they can save by allocating features wisely. When they feel like your pricing helps them be efficient, they trust you more — and they’re more likely to stay long term.
9. In user interviews, 68% said pay-per-user “discouraged collaboration” due to added user costs
The Hidden Cost of Limiting Access
Collaboration is the lifeblood of modern teams. When tools support open access and teamwork, productivity increases. But when you price per user, you introduce a new kind of friction: hesitation.
Teams start asking questions like, “Do we really need to invite Sarah?” or “Can we just share one login?” That hesitation creates barriers. And when 68% of users say per-user pricing discourages collaboration, it’s clear that this issue runs deep.
The cost of adding new users — even small — creates mental resistance. Instead of working together seamlessly, teams start rationing access. And that slows everything down.
How This Affects Product Value
Your product’s full value is unlocked when it’s used across the team. If people hesitate to invite others, you’re not just losing users — you’re losing depth of usage, more feedback, and future upsell potential.
Products that thrive in team settings — like project management, analytics, CRM, or knowledge sharing tools — suffer most from this. When fewer users engage, fewer workflows get integrated. That limits stickiness and leads to shallow adoption.
What You Can Do
If collaboration is a core part of your value, reconsider strict per-user pricing. You might offer unlimited users and charge based on usage, storage, features, or results. Or you could bundle user seats in blocks, so adding a few teammates doesn’t feel like a big cost decision.
Also, reinforce the value of team engagement. Show how collaboration boosts outcomes — and how your pricing supports that.
When pricing encourages more users to join and contribute, everyone wins. Your product gets stickier, teams work better, and you unlock more opportunities to grow with them.
10. Hybrid models (user + feature) saw a 33% higher customer lifetime value
Why Mixing Models Can Multiply Growth
Choosing between pay-per-user and pay-per-feature may feel like a binary decision, but for many SaaS companies, the real magic happens when you combine them. A hybrid pricing model — where customers pay per user but also for additional features — gives you more control and flexibility. And it works. Companies using this model report a 33% increase in customer lifetime value.
Why is that? Because hybrid pricing adapts to customer growth. As teams expand, more users are added. As needs evolve, more features are unlocked. You’re not limiting revenue to just one dimension. Instead, you’re growing with the customer on two fronts.
How to Build a Hybrid Model That Works
Start with a core per-user plan. This gives customers predictable pricing and full platform access. Then layer in premium feature packages — tools that solve advanced problems, deliver measurable ROI, or support specific workflows.
For example, a base plan could include collaboration and reporting. But advanced automation, white-label exports, or integrations could be feature upgrades.
Be clear about what’s included and what’s extra. Customers appreciate transparency. Use your pricing page to guide them through the decision without pressure.
Finally, give customers room to grow gradually. Allow trial access to premium features so they can experience the value before committing. When they see the benefit firsthand, they’re more likely to pay — and stay.
11. Onboarding time was 19% shorter with pay-per-user models due to simpler decisions
Simplicity Wins in the First Mile
The moment a user signs up is delicate. They’re excited, but also uncertain. That’s why onboarding speed matters. And in that early stage, fewer choices can mean faster progress.
Pay-per-user models often reduce friction because customers don’t have to make complicated decisions. Everyone gets access to everything. That simplicity trims onboarding time — in fact, companies using this model report onboarding cycles that are 19% shorter.
That’s not just good for customer success teams. It’s good for revenue. The faster customers get value, the sooner they pay, expand, and refer others.
Making Simplicity Work for You
If you use per-user pricing, take advantage of the clarity it gives. Make your onboarding experience fast and focused. Get users into the product quickly. Let them explore without limits. When every seat includes all features, you remove blockers.
This model also works well with strong in-app guidance. Use tooltips, checklists, and walkthroughs to help teams discover your product’s full value in the first session. Don’t bury key features — highlight them early.
That said, simplicity isn’t just about fewer choices. It’s also about fewer surprises. Be transparent about pricing from the start. When customers know exactly what they’re paying for, they trust you more.
And once they’re onboarded, keep the momentum. Encourage full team adoption. The more people using the product, the deeper the engagement — and the harder it becomes to churn.
12. 73% of SaaS companies with technical users (e.g., APIs, DevOps) preferred pay-per-feature
Why Technical Buyers Want More Control
When your users are engineers, developers, or DevOps pros, they think differently about software. They want tools that fit into workflows, not platforms that force them into rigid patterns. That’s why almost three-quarters of SaaS companies serving technical buyers lean toward pay-per-feature pricing.
Developers care about precision. They want to pay for what they use — and only what they use. If you charge them for users instead of access, they often push back. In many cases, they’re managing systems or automations rather than using the UI directly. So per-user pricing doesn’t feel right.
Also, technical buyers often handle large workloads with fewer people. They might run huge processes with a small team. So pricing by user penalizes their efficiency. Feature-based pricing feels fairer and scales with the value they get.
How to Win Technical Markets with Feature-Based Pricing
If you’re serving a technical audience, start by identifying the core functions they care about. APIs, logs, custom integrations, sandbox environments, or scaling infrastructure — these are great candidates for modular pricing.
Structure your pricing to support high-use, low-seat accounts. Offer metered plans or usage caps where appropriate. Let them start small and scale naturally.
And document everything. Technical buyers want to understand exactly what they’re getting. Provide detailed breakdowns of what each feature includes, what limits exist, and how pricing is calculated. No fluff — just the facts.
You’ll also want to align your pricing with how engineers build. For example, if your product integrates with CI/CD pipelines or cloud systems, make sure the features supporting those use cases are easy to find and easy to price.
In technical markets, precision builds trust. And trust drives adoption.
13. Pay-per-user models showed a 21% lower billing complexity score in CFO surveys
Why Simpler Billing Can Be a Deal Closer
CFOs and finance teams have one big priority when reviewing SaaS tools — predictability. They want to know what they’re paying, when they’re paying, and how that cost might change over time. When surveyed, CFOs gave pay-per-user pricing a 21% lower billing complexity score compared to feature-based pricing. That’s a big signal.
Why does this matter? Because billing complexity slows things down. It creates questions, increases back-and-forth with vendors, and leads to delays in approvals. The more complex the invoice, the harder it is to say yes to the deal — or to renew later.
What Makes Per-User Pricing Simpler
With pay-per-user, the math is easy: number of users times rate per user. If someone joins the team, add a seat. If they leave, remove one. This logic fits cleanly into most accounting systems.
Feature-based pricing, while powerful, often involves more layers: tracking add-ons, usage limits, upgrades, and custom modules. This creates variability — which some finance leaders see as risk.
For companies that value clean forecasting, this simplicity matters. It speeds up internal budgeting, accelerates procurement cycles, and supports longer-term planning.
How to Apply This in Your Pricing Strategy
If you’re going after large companies, work with finance teams — not just users. Offer pricing models they can easily explain to their stakeholders. Consider giving them access to real-time billing dashboards or automated monthly invoices that break down each charge.
If your model is feature-based, reduce billing confusion by clearly grouping your features into bundles. Keep pricing pages clean and structured. Provide sample invoices during the sales process so clients know exactly what to expect.
And if you’re getting consistent pushback about pricing complexity, that’s a red flag. It may be time to revisit how you explain your model — or consider offering a simpler per-user tier for finance-conscious buyers.
14. Account expansion revenue was 2.6x higher in companies using pay-per-feature pricing
The Power of Modular Growth
Account expansion — or growing revenue from existing customers — is one of the most efficient ways to scale. It costs less than new customer acquisition and often happens faster. So when we see that companies using pay-per-feature pricing get 2.6 times more expansion revenue, it’s worth asking why.
The answer lies in flexibility. Feature-based pricing gives customers room to grow at their own pace. They don’t need to commit to a large plan upfront. Instead, they can start small, get value, and add features as their needs evolve. That ongoing expansion is what drives big results.
Why Feature Pricing Encourages Expansion
With per-user models, the main way to grow revenue is to add more people. But that assumes team growth. What if the team size stays the same but their needs increase?
That’s where pay-per-feature shines. A customer might start with reporting, then add automation. Later, they want integrations. With each new need, there’s an opportunity to upgrade. And if your product is good, these needs keep coming.
This structure aligns with how businesses actually grow. They don’t always grow by headcount — they grow by complexity, by ambition, by scale. Feature-based pricing captures that reality better.
How to Maximize Expansion Revenue
Start by designing your features to solve problems at different stages of growth. Some should appeal to early-stage users. Others should target advanced or scaling teams.
Make it easy to upgrade. In-app upgrade paths work well — especially when tied to usage triggers. For instance, when a user hits a reporting limit, offer the advanced analytics pack. Don’t just sell — solve a problem in real time.
Also, track which features drive the most expansions. Double down on those. Improve them, market them, and use them to guide future product development.
Finally, invest in customer success. Expansion doesn’t happen by accident. Help your users grow into new features. Educate them on what’s possible. When they succeed, they spend more — and they stick around.
15. 35% of companies with per-user pricing switched to feature-based due to growth-stage friction
When Scaling Makes Pricing Break
Pricing might work great at first — but what happens when your customer grows? For many companies using pay-per-user pricing, the answer is: friction. As teams scale, per-user pricing often starts to feel rigid, expensive, or misaligned with value.
That’s why 35% of companies originally using per-user pricing eventually moved to a feature-based model. They didn’t abandon their original structure for no reason — they did it because their pricing couldn’t keep up with their customers’ journey.
The Pain Points of Growth with Per-User Pricing
When small teams grow into midsize ones, adding users becomes a bigger financial decision. Each new seat means more cost, and often without more perceived value. This slows down onboarding, collaboration, and expansion.
Worse, growing teams may hit user caps that force them to jump to a higher tier, even if they don’t need more features. That feels unfair — and it can lead to resentment or churn.
Feature-based pricing, by contrast, lets teams add value without being penalized for growth. It supports scaling in a way that feels aligned with how customers evolve.
Should You Switch?
If your customers are hitting friction points — hesitating to add users, questioning upgrade costs, or trying to game your pricing — it’s time to review your structure.
You don’t have to throw out per-user pricing entirely. Many companies start with it, then layer in features as upsells or bundles. This gives growing customers more options — and reduces the chance they’ll leave just to find a better fit.
If you do decide to transition to pay-per-feature, communicate clearly. Explain the benefits: more flexibility, more control, and better alignment with real needs. Show how they’ll likely pay the same — or less — for more value.
And test before scaling. Run pilots with select accounts. Gather feedback. Optimize as you go.
Pricing isn’t just a number — it’s a relationship. And as your customers grow, your pricing should grow with them.
16. Pay-per-feature pricing increased annual contract value (ACV) by 18% on average in B2B SaaS
The ACV Advantage of Feature-Based Plans
Annual Contract Value — or ACV — is one of the most powerful indicators of how much value you’re delivering per client each year. And in B2B SaaS, where high-touch accounts and deep integrations are common, growing ACV can have an outsized impact on revenue.
Feature-based pricing drives an average 18% increase in ACV because it gives customers more reasons to buy. Instead of choosing a single tier and sticking with it, they unlock tools based on their evolving needs. That growth doesn’t just reflect higher spending — it reflects deeper value.
Why Features Drive Bigger Deals
When pricing is tied to users, you’re stuck in one lane. The only way to grow ACV is to add more seats. But what happens if the customer is maxed out on users? Your revenue flatlines.
With feature-based pricing, growth becomes multi-dimensional. You can layer in analytics, automation, security, API access, compliance tools, and more. These aren’t just “nice-to-haves” — they’re critical for large teams. And that urgency translates to bigger contracts.
It also helps in enterprise sales. When your product map includes modular features, it’s easier to build custom packages that justify higher price points. The client feels like they’re getting a tailored solution — and you’re able to increase ACV without forcing a one-size-fits-all deal.
How to Use This to Grow Bigger Contracts
Design your pricing tiers around business goals — not just product usage. Understand what growing companies need at each stage, and align your premium features with those milestones.
If your product supports different teams (like sales, marketing, or ops), build bundles around their roles. This way, each department can justify the cost based on its specific benefits.
Also, be strategic about when to introduce premium features. Early in the sales process, focus on core value. Once trust is built, use deeper features to expand the scope and justify a higher contract.
ACV growth isn’t about pushing bigger bills — it’s about matching pricing to progress. When your model supports long-term growth, customers don’t mind spending more. In fact, they expect to.
17. Price sensitivity was 27% lower among buyers when features were modular
Why Control Reduces Resistance
One of the biggest challenges in SaaS pricing is price sensitivity — that moment when a buyer says, “This is too much.” But when customers can choose exactly what they want and avoid what they don’t, that resistance drops. A lot.
Buyers in modular pricing environments — where features are unbundled and sold separately — report 27% less sensitivity to cost. That’s a major edge.
Why? Because people want to feel in control. They don’t mind paying when they understand what they’re getting — and when they can say no to things they don’t need. That sense of fairness softens pricing conversations and reduces friction during the sales process.
How to Reduce Price Pushback With Modular Options
Start by identifying your highest-value features — the ones that solve big problems or save the most time. Instead of hiding them behind expensive tiers, offer them as optional add-ons.
Be transparent with pricing. Modular pricing works best when customers can clearly see the breakdown. They should know exactly what each feature costs and what value it brings. This also helps avoid the “sticker shock” that comes with bundled pricing where the logic isn’t obvious.
Another tactic: show customers how they can customize their plan. Offer an interactive pricing tool that lets them build their own package. As they see the price change in real time, they’ll feel more comfortable — and more in control.
And don’t worry about losing upsells. Most customers don’t choose the cheapest possible option. When a feature clearly solves a pain point, they’ll add it — even if it costs more. What matters is that the choice feels theirs.
Modular pricing isn’t about being cheap — it’s about being flexible. And that flexibility builds trust.
18. Only 14% of IT decision-makers favored per-user pricing for tools used cross-functionally
Why Teamwide Tools Need a Different Approach
Some SaaS tools are built for individual use. Others are built for teams. And some — like project management software, data dashboards, or automation platforms — are designed to be used across entire organizations.
When tools are used across departments, pricing by user becomes a problem. In fact, only 14% of IT decision-makers prefer per-user pricing in these cases. That tells us something critical: when collaboration is essential, per-user pricing creates tension.
It forces teams to ration access. It turns what should be a shared tool into a gated one. And that breaks the very thing the tool is meant to enhance — teamwork.
Why Feature-Based Pricing Works Better for Cross-Functional Tools
With feature-based pricing, companies can open access to the whole organization without worrying about cost per seat. Everyone gets what they need. Instead of limiting headcount, the focus shifts to capability.
That’s important because cross-functional teams don’t always grow in neat patterns. One week, marketing is the heavy user. The next, operations jumps in. Pricing models that flex with usage — not headcount — are better suited for this reality.
It also simplifies procurement. IT teams can focus on security, compliance, and value, without having to manage who has access and who doesn’t. That saves time and reduces frustration.
Structuring Plans for Teamwide Adoption
If your product supports multiple departments, build pricing that reflects shared use. Charge based on usage volume, data processed, features unlocked — anything that scales with value, not with people.
Offer site licenses or organization-wide access tiers for larger customers. These reduce administrative overhead and encourage broader adoption.
And position your product as a collaboration enabler. Highlight how access for everyone drives better results. The more you align your pricing with team goals, the easier the sale.
Remember, tools that power collaboration must also be priced collaboratively. When your pricing removes barriers, you become a true partner — not just another vendor.
19. In horizontal SaaS, per-feature pricing outperformed per-user by 32% in net retention rate
Why Horizontal Tools Need Horizontal Flexibility
Horizontal SaaS products — think project management, CRM, internal wikis — serve many industries and departments. They’re designed for broad usage, not niche workflows. And when a tool is this versatile, pricing needs to be equally adaptable.
That’s why feature-based pricing wins. In fact, companies offering horizontal tools saw 32% higher net retention rates when they used pay-per-feature models instead of per-user pricing.
Why? Because every team doesn’t use your tool the same way. Sales needs one set of tools, marketing another. Charging everyone the same — or limiting access by user count — doesn’t reflect the flexible, multi-team value these platforms bring.
Why Retention Improves With Feature-Based Flexibility
Retention depends on continued value. As different teams start using your platform, their needs evolve. Per-feature pricing gives them room to grow without the friction of user-based costs.
This setup also encourages broader adoption. When a new department wants to try the product, there’s no penalty for adding users — just an opportunity to add the right features for that team. That freedom reduces internal debates about “who gets access” and keeps your product growing inside the organization.
Building Feature-Based Pricing for Horizontal SaaS
The first step is mapping usage by role. Understand what different functions — HR, ops, finance — actually do inside your platform. What features matter most to each group?
Then, structure your plans around those needs. You can offer function-based bundles, usage-based caps, or add-ons for specialized modules. The key is letting teams get exactly what they need, without paying for tools they’ll never touch.
Also, invest in usage analytics. This helps you identify which features drive the most expansion — and which ones lead to long-term retention. You’ll get clearer signals about what to promote, what to improve, and where to price for growth.
Retention is about staying useful. Per-feature pricing helps you stay useful for more people, longer.
20. 59% of customers said pay-per-user felt “punitive” as team usage scaled
When Pricing Feels Like a Penalty
Growth should be exciting. But for many customers using per-user pricing, it starts to feel like a punishment. Nearly 60% of users surveyed described it as “punitive” when adding new team members led to sudden cost increases.
This feeling can poison the relationship with your product. Customers begin to second-guess every invite. They hold off on expansion. They look for alternatives. All because the pricing model makes growth feel like a risk.
And once your customers view your pricing as a penalty — not a value — trust breaks down.
Why This Perception Hurts
When pricing is seen as a tax on usage, it discourages engagement. Teams stop inviting others, and collaborative momentum stalls. That limits adoption, which weakens product stickiness — and over time, increases churn.
This perception also damages upsell potential. If customers are afraid of growing their bill, they won’t explore new capabilities. Instead of discovering more value, they retreat into defensive behavior. That’s the opposite of what you want.
How to Fix This Feeling
If your customers are scaling but complaining about cost, look closely at how your pricing aligns with perceived value.
Start by offering bulk seat packages or tiered discounts. That takes the edge off cost jumps and helps pricing scale more smoothly.
You can also explore hybrid pricing. Offer unlimited users for a base fee, then monetize by features or usage. This makes access feel free while still capturing value from high-intensity customers.
Most importantly, shift your pricing story. Emphasize growth, flexibility, and shared success. Make it clear that your goal is to support scale — not charge for it.
Customers who feel penalized won’t stay long. But customers who feel supported? They’ll grow with you.
21. Companies using pay-per-feature pricing had 45% more pricing tier experiments
Why Modular Pricing Enables More Innovation
Pricing isn’t static. The best SaaS companies treat it like product development — always testing, learning, iterating. And one of the biggest advantages of pay-per-feature pricing is how flexible it is for experimentation.
In fact, companies using this model ran 45% more pricing tier tests than those using per-user pricing. That’s a huge difference. And it translates into sharper pricing strategy, better customer fit, and faster revenue growth.
Why It’s Easier to Experiment With Features
Per-user pricing is straightforward, but it’s also rigid. You either charge $X per user, or you don’t. Changing that number has wide implications and risks confusing or alienating existing customers.
But with feature pricing, you can experiment in small slices. Try new bundles. Test premium feature placement. Introduce limited-time add-ons. Because you’re not changing the core structure — just what’s included — you can run tests with less friction.
This modularity makes it easier to learn. You can see exactly how one feature impacts uptake, retention, or upgrade rate. That clarity fuels smarter decisions.
Running Smart Experiments With Pay-Per-Feature Pricing
Start with a hypothesis. What’s a feature you believe adds major value? Offer it as a standalone add-on for new users and track conversions.
Or, group mid-value features into a themed bundle — like an “automation toolkit” or “collaboration suite.” See if themed packaging drives better upgrades than generic tiers.
You can also test placement. Try including a feature in your mid-tier for a month, then move it to a higher tier and compare the impact on ACV.
The more you test, the better your pricing becomes. And because pay-per-feature models are naturally modular, you can run these experiments without confusing your audience.
Pricing is never perfect the first time. But with the right structure, you can keep getting closer — and stay ahead of competitors who are afraid to change.
22. 87% of top-decile SaaS performers offered feature-unlock upsells
Why Top Performers Focus on Unlocking Value
There’s a clear pattern among high-growth SaaS companies: they use upsells as a natural part of the customer journey. And for 87% of the top-performing SaaS firms, those upsells come in the form of unlocking features — not adding users.
This approach isn’t just about revenue. It’s about letting customers explore more value as they grow. Each unlocked feature feels like progress. It’s a reward for success, not a penalty for expansion.
That’s a big reason why these companies stay ahead. They build their pricing to match how customers discover new needs — and meet those needs with relevant offers.
Why Feature Unlocks Work Better Than Seat Upgrades
Seat-based upsells often feel forced. A team grows, and suddenly, the bill jumps. It doesn’t matter if the new users are getting the same value — the cost still rises. That can feel arbitrary.
Feature unlocks, on the other hand, are tied to real outcomes. A team hits a usage milestone, wants deeper analytics, or needs a specific integration. Offering that next step as a paid upgrade makes sense. It matches timing and context.
This also supports more predictable expansion. You can map which features are needed at which stage and structure pricing around those paths. That allows for stronger forecasting and better upsell targeting.
Building an Effective Feature-Unlock Path
First, understand your customer journey. What are the key milestones? When does a customer typically want to automate more? When do they need advanced security or reporting?
Group features around those milestones. Don’t just offer a long list of add-ons — guide users toward what they need next. That makes it easier for them to say yes.
Also, highlight locked features in your product. Let users see what they could have, not just what they do have. When curiosity leads to value discovery, upsells happen naturally.
Upselling doesn’t have to feel like selling. If done right, it feels like growing.
23. Net promoter score (NPS) was 11 points higher on average for pay-per-feature plans
How Pricing Affects Customer Satisfaction
Net Promoter Score (NPS) measures customer loyalty. It’s a direct reflection of how happy people are with your product and your brand. And when pay-per-feature pricing leads to an average 11-point increase in NPS, that tells us something very important: people like feeling in control.
Customers don’t just care about what your product does. They care about how it’s sold. Pricing that feels fair, flexible, and aligned with usage creates a better experience. And that better experience leads to more referrals, longer retention, and greater willingness to expand.
Why Feature-Based Pricing Feels Better
When users only pay for what they use, they feel respected. They’re not being forced into tiers they don’t need or asked to pay more just because the team added a few users.
This reduces friction. It also builds trust. Customers believe you’re on their side — and that changes how they talk about you, both inside their company and to peers.
High NPS isn’t just a vanity metric. It leads to more word-of-mouth growth, lower churn, and a stronger brand reputation in your market.
How to Use This to Improve Your Customer Experience
If your NPS is low or flat, look at your pricing model. Are users frustrated by limitations? Are they stuck in plans that no longer fit? Are they forced to upgrade just to get one extra tool?
Consider offering smaller, targeted feature upgrades instead of broad jumps. This gives customers a path to grow that feels more natural — and more in line with their budget.
Also, talk to your promoters. What do they love about your pricing? Use that language in your onboarding and marketing. If they mention flexibility or control, lean into that message.
Remember, every interaction with your pricing model shapes how customers feel about your brand. The more respectful and user-friendly it is, the more likely they are to promote you.
24. User-based pricing reduced shadow IT incidents by 12% in security-conscious firms
The Security Case for Limiting Access
Not every metric is about growth or revenue. In some industries, especially regulated ones, pricing models impact risk. One example: shadow IT — when employees use tools without IT’s approval. It’s a common problem, and one that creates security and compliance headaches.
Interestingly, companies using per-user pricing report 12% fewer shadow IT incidents. Why? Because user-based pricing often means access is tightly controlled and managed. Every seat is assigned, tracked, and monitored. That creates a cleaner security perimeter.
In industries like healthcare, finance, or government, this matters a lot.
Why Fewer Users Can Mean Better Control
Per-user pricing often goes hand-in-hand with central management. IT departments can issue licenses, set permissions, and monitor activity. This visibility makes it easier to enforce security policies and ensure compliance.
With feature-based models — especially if they allow unlimited users — it’s easier for unauthorized access to slip through. Someone shares a login. A team member invites a contractor. Suddenly, the system has more users than expected, and not all of them are tracked.
That doesn’t mean feature pricing is unsafe. But it does mean that user-based models give IT teams more confidence when data sensitivity is a concern.
Applying This in High-Security Environments
If you serve industries with strict compliance needs, consider offering per-user options — or at least enterprise controls that mimic the benefits. Role-based permissions, SSO, audit logs, and admin dashboards are critical features.
You can also offer hybrid plans: user-based licensing for core roles, with limited-access portals for others. This gives companies control while still letting more people collaborate safely.
In your sales and marketing, highlight how your pricing supports IT control. Position your model not just as fair — but as secure. That angle matters more than you think, especially when selling to risk-averse buyers.
Pricing isn’t just about access. It’s about trust. And in security-first environments, how you price can be the deciding factor.
25. Pay-per-user led to 26% faster deal cycles in transactional sales motions
When Speed Beats Complexity
In transactional sales — where deals are fast, often self-serve or lightly assisted — every second matters. Customers don’t want to think too hard, negotiate too long, or weigh too many options. They want a simple yes or no decision. That’s where pay-per-user pricing helps.
With a clear, predictable price per person, customers can act faster. No need to decode feature sets. No need to call sales. Just count the team members and calculate the cost.
In fact, SaaS companies using per-user pricing report deal cycles that are 26% faster in transactional sales compared to those using feature-based pricing.
Why Simplicity Wins in Low-Touch Sales
Pay-per-user is a straightforward value exchange. The buyer understands exactly what they’re getting — access for each user — and what it costs. This works well for teams who just need access and aren’t yet looking for deep customization or add-ons.
This model also shines on pricing pages. You can display one clear rate per user, highlight what’s included, and make the checkout process instant. That reduces hesitation and supports self-serve conversions.
The fewer decisions you ask buyers to make, the quicker they’ll decide. That’s what drives velocity.
How to Apply This in Your Sales Process
If your SaaS targets small teams or individual departments — and your sales are mostly low-touch — lead with per-user pricing. Keep your plans clean. Don’t overcomplicate the offer.
Use landing pages that focus on clarity. Spell out the math: number of users times price. Offer clear monthly or annual options. Then make signup seamless — no form walls, no required demos, no delays.
You can still layer in feature upgrades later. But the first conversion should be fast and easy. That’s how you maximize transactional velocity.
The quicker a customer says yes, the sooner they experience value — and the sooner they become your next upsell opportunity.
26. Freemium conversion rates were 1.9x higher when upgrading to pay-per-feature tiers
Turning Free Users Into Paying Customers
Freemium models are great for getting users in the door. But converting them into paying customers? That’s the real challenge. The key is creating upgrade paths that feel natural — and worth paying for.
That’s why freemium conversion rates are almost twice as high when the next step is a feature-based upgrade rather than a user-based one. Users are more likely to pay when they’re unlocking specific capabilities — not just unlocking more seats.
Why? Because features feel like value. Extra seats feel like admin.
Why Pay-Per-Feature Upsells Feel Better After Freemium
Most freemium users are solo explorers or small teams. They’re testing your product to see if it solves a real problem. When they hit a wall — like needing analytics, export options, or automation — they’re already invested. Paying to unlock that next step feels like progress.
But if the upgrade is just about adding users, it may not feel worth it. Especially if they haven’t brought others in yet.
Features connect directly to outcomes. A user can imagine what life will look like with that extra tool. That mental picture drives conversions.
How to Structure Freemium to Feature Upgrade Paths
Start your free plan with enough to show real value. Don’t cripple it. Make sure the user can succeed on their own.
Then, monitor behavior. What actions signal deeper intent? What features do users hover over or try to access?
Use that data to build smart upgrade prompts. When a user hits a limit — or shows interest in a feature — trigger an in-app prompt. Don’t wait for them to seek out pricing. Bring it to them, at the right time.
Also, explain the value clearly. Use real-world outcomes: save hours, improve results, unlock a new workflow. Make the upgrade feel like a natural next step.
Freemium is the hook. Pay-per-feature is the bait that actually works.
27. Per-user pricing saw 39% more discounting pressure in sales negotiations
When Simplicity Becomes a Bargaining Chip
Sales negotiations aren’t just about product value — they’re about perceived fairness. And with per-user pricing, customers often see room to negotiate. That’s why companies using this model report 39% more discounting pressure during sales discussions.
Why does this happen? Because the value of each user isn’t always clear. Some use the tool heavily. Others log in once a week. Charging the same for both creates doubt. That doubt becomes leverage — and leverage becomes a discount request.
Why Feature-Based Pricing Holds Value Better
When you charge based on features, the price is tied directly to capability. Each upgrade solves a problem. Each add-on delivers a result. That’s harder to argue with — and easier to defend.
In feature-based pricing, the customer feels like they’re paying for outcomes, not headcount. That changes the conversation from “Why so expensive?” to “Is this worth it?” That’s a better discussion to have.
How to Reduce Discounting Pressure
If you’re using per-user pricing, be ready to defend the value of every seat. Use usage data in your proposals. Show how each role benefits from access. This builds a stronger case.
You can also package user licenses with premium features. This changes the perception of the deal — it’s not just a seat, it’s a bundle of value.
If discounting becomes a pattern, review your pricing structure. Consider switching to pay-per-feature or a hybrid model. You might find that feature-based pricing gets fewer objections — and higher close rates.
Also, train your sales team. Give them scripts and stories that connect pricing to ROI. When the rep believes in the price, the customer is more likely to believe too.
In pricing, clarity beats confusion. And perceived value beats volume math every time.
28. 52% of CSMs report upselling is easier with modular feature-based pricing
Why Simplicity Helps Customer Success Close More Deals
Customer Success Managers (CSMs) are on the front lines of expansion. They build relationships, guide adoption, and spot upsell opportunities. And over half of CSMs — 52% — say it’s easier to drive those upsells when pricing is based on modular features instead of user count.
That makes sense. When pricing is modular, conversations become about solving problems. It’s not about asking for more seats. It’s about offering a feature that saves time, adds visibility, or enables a new workflow. That’s a much easier conversation to have.
Why Feature-Based Upsells Feel More Natural
Modular pricing lets the CSM tailor offers to what the customer is already doing. If a team starts asking for integrations, the CSM can offer an integration pack. If they hit reporting limits, analytics features become the obvious next step.
This feels consultative, not transactional. The CSM is helping, not selling. And when the upsell improves the experience, customers say yes faster — and stick around longer.
This kind of expansion also avoids the sticker shock that comes with jumping to a bigger tier. Instead, the customer sees a small increase for specific value. That’s a much easier pill to swallow.
How to Enable Your CSM Team
To empower your Customer Success team, give them tools and freedom to offer features à la carte. Avoid rigid upgrade paths that force the customer into major pricing jumps.
Build playbooks around key product milestones. For example: “If a customer hits X in usage, offer Y feature.” This structure helps CSMs know when and how to present new value.
Also, train them to position features as results. Don’t say “You need the pro pack.” Say “This tool will save you four hours a week.”
Upselling is easier when it feels like solving. Modular pricing gives CSMs the tools to do exactly that.
29. Usage analytics accuracy improved by 34% with pay-per-feature due to tracked entitlements
The Data Edge of Entitlement-Based Pricing
In SaaS, data is leverage. Knowing how customers use your product lets you improve onboarding, plan roadmaps, and tailor upsells. And when companies switch to pay-per-feature pricing, usage analytics become 34% more accurate. Why? Because entitlements are clearly defined.
When customers buy individual features, each one gets tracked as a discrete unit. You know who’s using what, how often, and where the drop-off happens. That kind of precision is harder to get in per-user models, where all users typically have the same access.
Why This Matters for Growth
Better data means better decisions. You can see which features lead to renewals. Which ones drive upsells. Which ones get used heavily, and which are ignored. That knowledge makes your product — and your pricing — smarter.
It also helps with churn prevention. If a customer stops using a key feature, you can intervene early. Offer training, check in, or propose a better-fit plan.
This level of insight also supports experiments. You can test pricing placement, add-ons, and new features — and see the results quickly, down to individual accounts.
How to Build a System That Tracks Entitlements Well
If you use feature-based pricing, make sure your product logs usage at the feature level. Don’t just track logins — track actual interaction. How often is the automation tool used? How long are users spending in the report builder?
Then, connect that data to your CRM. Give sales and success teams visibility into what customers are using — and what they’re not. That powers smarter conversations and helps you close stronger deals.
Data becomes even more powerful when it’s shared. Use your analytics to inform roadmap prioritization. Show product teams what matters. Show leadership where revenue is coming from.
With better tracking, you don’t guess — you know.
30. Companies with under 100 customers saw 47% lower churn when using pay-per-feature pricing
Why Early-Stage Customers Stick With Feature Flexibility
In the early stages of growth — when you have fewer than 100 customers — every account matters. And churn hits harder. That’s why it’s so important that companies in this stage saw 47% lower churn with pay-per-feature pricing.
Why the big difference? Because early customers want flexibility. They’re still figuring things out. They may not know exactly what they need yet. Being able to pick features, test things out, and grow over time gives them a sense of control.
Rigid per-user plans, on the other hand, force early decisions that may not match their real usage. That mismatch leads to dissatisfaction — and eventually, departure.
Why This Is a Survival Strategy
Churn is the enemy of early-stage SaaS. If you’re burning leads as fast as you close them, you can’t scale. But if you retain your first 100 customers, you build a foundation for referrals, case studies, and steady revenue.
Feature-based pricing gives you a way to meet each customer where they are. A small team can start with core features. As they grow, they unlock more. No big jumps, no hard decisions. Just steady value.
That slow, natural progression leads to longer customer lifespans — and a better brand reputation.
How to Protect Your Early Customers
Offer low-cost entry points with real value. Don’t make them commit to a full-feature plan right away. Let them build their ideal setup one piece at a time.
Also, stay close to their journey. Talk to them regularly. Understand what they’re trying to achieve — and align your feature offers with that. The better your product fits their evolving needs, the longer they’ll stay.
And when a customer sticks around for a year or more, they’re far more likely to grow with you. That’s where your next upsells, referrals, and testimonials come from.
In the early days, retention is everything. And flexible pricing is your best defense against churn.
Conclusion
When it comes to SaaS pricing, there’s no single “best” model. But there is a right model for your product, your customers, and your growth stage.
Pay-per-user pricing works best when clarity and simplicity drive the sale. It’s excellent for small teams, transactional deals, and situations where ease of billing matters most. It removes choice, which in many fast-moving sales, actually reduces friction.
