Grandfathered Pricing: Rewarding Early Users While Raising Prices
Raising prices without churning loyalists is a solved problem: grandfathered pricing honors early believers, segments willingness to pay, and turns pricing power into loyalty.
Daniel Reyes
Daniel covers pricing strategy and value capture for SaaS businesses. He focuses on packaging, willingness to pay, and monetization experiments.
Freemium Math: When Free Users Actually Pay Off
Freemium bankrupts companies that run it on hope. The actual math: free-to-paid conversion thresholds, support cost ceilings, and the viral subsidy that makes it work.
Usage-Based Pricing: Metering Value Instead of Seats
Seat-based pricing taxes your customers' growth. Usage-based pricing meters value instead. How to design meters, avoid bill shock, and expand revenue.
Bait-and-Switch Pricing: The Low-Price Trap
Bait-and-switch pricing lures buyers with low prices, then forces costly add-ons. How the trap works, why it backfires, and the honest alternative.
Predatory Pricing: Temporary Destructive Pricing to Crush Competitors
Editor’s note: this piece breaks down aggressive competitive tactics for educational purposes. Some of these moves sit close to, or across, legal lines on deception, defamation, and fair competition, which differ by jurisdiction. Nothing here is legal advice; talk to…
Price Discrimination: Charging the Maximum Each Customer Can Pay
TL;DR & Definition Price discrimination is the economic practice of charging different customers different prices for functionally identical software, based entirely on their willingness and ability to pay. In SaaS, this is achieved through clever packaging, opaque enterprise discounting, and…
Rent Seeking: Extracting Tolls Without Adding Value
TL;DR & Definition Rent seeking is the act of increasing your share of existing wealth without creating new wealth. In B2B SaaS, this manifests as leveraging monopoly power, high switching costs, or ecosystem lock-in to force customers into paying higher…
Value Capture: How Much Created Value Can You Keep?
TL;DR & Definition Value capture is the ratio of the total economic value your software creates for a customer versus the actual revenue you collect from them. Building a product that saves a company $10 million is useless if your…
Feature Gating: Locking Essential Features as Companies Grow
Feature gating locks capabilities behind pricing tiers. Which features to gate, which to free, and when gating manufactures resentment.
Wealth Extraction: Silently Taking Maximum Wallet Share
TL;DR & Definition Wealth extraction in SaaS isn't about stealing; it's about systematically absorbing every dollar a customer is willing to spend on a specific operational domain. While value creation focuses on building a great product, wealth extraction is the…