Foster: Effective SaaS Pricing Leverages Feature Tiers and Usage Meters
Wade Foster · 893 SaaS: How Zapier Passed 60k Paid Seats and $20m in ARR · Jan 3, 2018 · at 13:18
Zapier CEO Wade Foster explains the mechanics of SaaS pricing structures and how usage tiers generate expansion revenue.
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“They tend to have two axes on their pricing levers. They've got like a feature tier. So this is like, you know, small, medium, large sort of thing, right? It's like, here's a small bucket of features, a medium bucket of features and a large bucket of features. And this is obviously like small business to like big business sort of thing. And so you kind of, there's like features that you lock into those different bits. And that gets you in like your base price. And then what they like to do, what to drive your expansion revenue is have some sort of usage meter, which is nice.”
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