What’s going on with pricing this year? A deep dive into 2023 pricing data.

November 30, 2023

Every year, OpenView uncovers the latest SaaS pricing trends, and this year is no different. Our seventh annual SaaS Benchmarks report, released earlier this fall, revealed five key trends around pricing (in addition to a range of other important SaaS metrics) based on findings from more than 700 SaaS companies.

Here’s what we found:

1. Folks are changing both pricing and packaging.

Most of those changes – even in this market – involve price increases. According to our data, half of all SaaS companies surveyed changed pricing and packaging, while a quarter changed pricing only, and just three percent changed packaging only.

A mere 22 percent of companies surveyed changed neither pricing nor packaging. But with persistent inflation, I’d bet we continue to see more price increases well into the new year.

2023 Pricing and Packaging Changes

Several notable SaaS companies also changed up pricing this year, including:

SaaS pricing changes

And even non-traditional software products are getting in on the action. Mercedes-Benz added a subscription fee for faster acceleration (topping out at up to $1,200 a year) and BMW added, then dropped, a monthly charge for heated seats – $18 a month.

If you’re mulling a pricing change in the next year, we recommend reading the following pricing resources first:

2. SaaS companies continue to embrace more complex, hybrid pricing models.

This year, we’re continuing to see more companies embrace usage-based pricing. If you’re not familiar, usage-based pricing (UBP), also known as consumption-based pricing, enables customers to pay for a product according to how much they use it. Usage corresponds to how the customer extracts value from your product. As seen in this year’s survey data, UBP is becoming increasingly prevalent within SaaS, even replacing more traditional subscription- and seat-based pricing models.

But usage-based pricing models exist on a spectrum. Increasingly, there are more hybrid models that combine usage-based pricing with traditional subscriptions in novel and creative ways.

  • Autodesk introduced Flex, a pay-as-you-go offering for occasional product use. This is a great way to get folks to try out the broad suite of Autodesk products with minimal commitment.
  • GitHub charges on a per-user and subscription basis. But they bake in usage of newer products like Actions, Packages, and Codespaces. Customers pay more as they use more.

Usage-based pricing

According to this year’s survey respondents:

  • 23% have usage-based subscription tiers
  • 18% have a largely usage-based model
  • 17% have tested usage-based pricing
  • 42% have no usage-based pricing

3. Folks are bringing pricing in-house.

In addition to the pricing changes mentioned above, companies are bringing pricing in-house as a function owned by internal team members. Just six percent of respondents this year said they hired a third party to help with pricing changes.

Early stage companies typically changed pricing based on a quick internal analysis lasting less than four weeks. Later stage businesses, meanwhile, did a more robust internal analysis to account for greater pricing complexity and a larger install base of customers.

Approach to pricing changes

4. PLG companies are starting to localize pricing for different markets.

Nearly 60 percent of respondents to this year’s survey said they make some effort to localize their pricing. This is true more so of Europe-based respondents relative to their American peers. Looking at pricing specifically, best-in-class SaaS companies adapt pricing geographically based on local willingness-to-pay, foreign exchange, and operating costs.

5. We’re in the early innings of AI monetization.

As with most things AI-related, it’s still early innings. And that’s true for AI monetization as well. While more companies are developing standalone or sidecar AI products, fewer have figured out how to monetize those additions.

  • 76% of SaaS companies either launched or plan to launch AI features
  • Only 15% have monetized AI (think: Notion, Intercom, Microsoft)
  • Given the costs of enabling AI, expect to see more monetization testing in 2024

Monetizing AI products

It will be fascinating to see how pricing evolves next year – what pricing or packaging changes do you have in store for 2024?

For more data from this year’s SaaS Benchmarks report, you can access the full findings here.

Kyle Poyar

Partner at OpenView

Kyle helps OpenView’s portfolio companies accelerate top-line growth through segmentation, value proposition, packaging & pricing, customer insights, channel partner programs, new market entry and go-to-market strategy.