SaaS Pricing Psychology: Nudging the Upgrade

The Decoy Effect

If you have two plans ($20 and $100), the jump feels huge. Add a middle option ($80). Suddenly the $100 plan looks like a 'deal' compared to the $80 one. This is the 'Decoy'.

### Value Metrics

Charge based on value, not seats. * Slack: Charge per Active User. * HubSpot: Charge per Contact. * Snowflake: Charge per Compute credit.

This aligns your growth with their growth. Upsell happens automatically.

Conclusion

Pricing is the most under-optimized lever in growth. A 1% improvement in pricing yields 11% improvement in profit.