# SaaS pricing: how to price a SaaS product, starting from what the workaround costs

> SaaS pricing for your first customers: price a SaaS product from what their workaround costs, pick the unit you charge for and check the price three ways.

- Source: https://productovi.com/blog/how-to-price-a-saas-product
- By: Sergey Bruh
- Published: 2026-09-30
- Topics: First price and plans, Critical problem

The most reliable SaaS pricing method for your first customers is to **calculate what their current workaround costs them each month and charge a clear fraction of it, often around a fifth.** The customer keeps most of the saving, so the decision is easy, and your price rests on their money rather than on your costs or a competitor's price list. Then check the result three ways: against the alternatives, against the number of customers you need, and against real buyers. Below is the method on one worked example.

## SaaS pricing strategy: why not start from your costs or from competitors?

- **Your costs** say nothing about value. Hosting a scheduling app costs a few hundred hryvnias a month; charging "costs plus 30%" would leave almost all the value with the customer and you with a hobby.
- **Competitors' prices** are someone else's guesses for someone else's customers. A generic tool priced low may not solve your niche's problem at all.
- **What the customer pays today to cope** is money they already spend, from a budget that already exists. Your job is to show you cost less.

## A worked example: scheduling for cleaning companies

Anton is building CrewBoard for small cleaning companies in Kyiv: firms with 4 to 12 cleaners working in 2 to 5 crews. Customers book cleanings by phone and messenger; the office has to assign crews, keys and addresses, and move everything around when someone is ill.

In conversations with owners, Anton asks about the last month, not about his idea: who did the scheduling, how long it took, and what went wrong. A typical answer from a firm with four crews:

- The dispatcher earns **20,000 UAH a month** for a 40-hour week and spends about **10 hours a week** on the schedule: calls, a spreadsheet, messages to crews.
- About **twice a month** a job is double-booked or missed. The firm refunds or re-does the cleaning and loses the margin, about **1,500 UAH** each time.

## Step 1. Put a price on the workaround

**Time:** 10 of 40 hours is a quarter of the dispatcher's week, so a quarter of the salary:

$$
0.25 \times 20\,000 = 5\,000 \text{ UAH a month}
$$

**Mistakes:** 2 × 1,500 = 3,000 UAH a month.

**Total:** about **8,000 UAH a month** is what the current way of scheduling costs this firm. Anton checks the pattern with several owners; the numbers vary, but the order of magnitude holds.

Note what's not in the total: the owner's stress, cleaners waiting outside a locked flat. They matter, but they are hard to price, so leave them out of the calculation and use them in the sales conversation.

## Step 2. Charge a share of it

A customer won't pay 8,000 to save 8,000. They need to keep most of the gain, and the saving has to be obvious even if CrewBoard delivers only part of what it promises. A price of around a fifth of the workaround cost gives a **value ratio** of about five to one:

$$
\frac{8\,000}{1\,600} = 5
$$

Anton sets **1,600 UAH a month** for firms with up to five crews. Even if the tool only halves the dispatcher's scheduling time and prevents one mistake a month, the firm saves 2,500 + 1,500 = 4,000 UAH, still more than double the price.

![The workaround costs about 8,000 UAH a month in dispatcher time and mistakes; a price of 1,600 UAH, a fifth of it, leaves the customer 6,400 and a five-to-one value ratio](/blog/how-to-price-a-saas-product/diagram.png)

## Step 3. Check the price three ways

**Against the alternatives.** Owners can keep the spreadsheet (free, but it costs the dispatcher's hours) or buy a generic CRM at about 400 UAH per user, 1,200 for three users, which tracks clients but doesn't assign crews or keys. CrewBoard costs more than the CRM and must say clearly why: it removes the scheduling work that the CRM leaves in place.

**Against your own numbers.** Anton needs about 60,000 UAH a month to cover his and his co-founder's living costs and the tools. After roughly 8% for taxes and payment fees, that's

$$
\frac{60\,000}{1\,600 \times 0.92} \approx 40.8 \rightarrow 41 \text{ firms}
$$

At 800 UAH it would be 82 firms: twice the selling for the same result. The full method is in [ramen profitability](/blog/ramen-profitability). Then check whether the market holds that many customers: [bottom-up market sizing](/blog/bottom-up-market-sizing) shows how.

**Against real buyers.** The only proof is money. Offer founding customers the product at this price, paid in advance, before you build: see [how to pre-sell a product](/blog/pre-sell-a-product). Listen to the reactions:

| Reaction                                      | What it suggests                                    |
| --------------------------------------------- | --------------------------------------------------- |
| Everyone agrees at once, nobody hesitates     | Probably too cheap                                  |
| Most hesitate, some pay, a few say "too much" | About right for a first price                       |
| Everyone who confirmed the problem says no    | The price, or the problem, is wrong: find out which |

## SaaS pricing models: pick the unit you charge for

The common SaaS pricing models differ mainly in that unit: one flat price, a price per user (seat), a price per unit of usage, or tiers by customer size. Price grows with value when it's tied to the thing that makes customers' value grow. For CrewBoard, that's the number of crews: a firm with ten crews saves more dispatcher time than a firm with two. So Anton adds a second plan, **2,800 UAH a month for up to 12 crews**. Keep the first price list short: one or two plans that a customer understands in ten seconds.

## Monthly, yearly and raising the price later

- **Offer a yearly plan from day one** with a modest discount. It brings cash earlier and customers who commit for longer; how big the discount should be is worked out in [annual plan discount](/blog/annual-plan-discount).
- **Your first price will be too low.** That's normal. When you raise it later, keep existing customers on their price for a while and give them clear notice; new customers pay the new price.
- **Avoid lifetime deals and a free plan at the start.** Both attract customers who value the product least and ask the most of you.

## Common mistakes

- **Pricing from costs.** Your hosting bill is not your customer's problem.
- **Copying the cheapest competitor.** If your product solves a problem the competitor doesn't, compare yourself to the workaround instead.
- **Averaging opinions.** "What would you pay?" collects guesses. Ask what the problem costs today, then ask for money.
- **Too many plans too early.** Each extra plan is another decision the customer has to make before paying.

## Key takeaways

- Start from the monthly cost of the customer's current workaround: time, mistakes and money.
- Charge a clear share of it, often around a fifth, so the saving stays obvious.
- Check the price against alternatives, against the customers you need, and against real prepayments.
- Tie the price to the unit that grows the customer's value, and keep the first price list short.

## FAQ

### How do I price a SaaS product with no competitors?

Competitors are rarely the real alternative anyway. Price against what customers do today to cope, a spreadsheet, a person, a paid service, and what that costs them per month.

### What share of the value should a SaaS price capture?

There is no fixed rule, but a price around 10–30% of the customer's monthly saving leaves them a clear gain. At the start, closer to a fifth gives room for the product to be imperfect.

### Should my first price be low to get customers?

No. A low price attracts customers who are least sure they need the product and doubles the number you have to win. Start from the value and adjust if real buyers show you are wrong.

### How often should I change my SaaS price?

Rarely, and with notice. Review the price once a year or when the product's value has clearly grown; keep existing customers on their price for a while after a rise.

## Learn it hands-on

The lesson [A price from the cost of today](/courses/bootstrapped-product/price-from-the-cost-of-today/theory) shows two founders pricing a product for car repair shops from what the shops already pay for their workaround, with quizzes and a practice task checked by AI. It is part of the course _From Idea to Profitable Product: Building Without Investors_; the lesson [Raising the price](/courses/bootstrapped-product/raising-the-price/theory) covers what to do a year later.

## Related lessons

- [Value-based pricing: start from the cost of today](https://productovi.com/courses/bootstrapped-product/price-from-the-cost-of-today.md)
- [Customer pain points they already pay for](https://productovi.com/courses/bootstrapped-product/a-problem-they-already-pay-for.md)
- [Validate a SaaS idea with prepayment](https://productovi.com/courses/bootstrapped-product/prepayment-as-a-test.md)
- [A yearly plan from day one](https://productovi.com/courses/bootstrapped-product/a-yearly-plan-from-day-one.md)
- [Raising prices without losing customers](https://productovi.com/courses/bootstrapped-product/raising-the-price.md)