Crafting Strategic Pricing for B2B SaaS Companies: Insights from Krzysztof Szyszkiewicz

In today's competitive SaaS landscape, pricing strategy can make or break your international expansion efforts. While product features and marketing often take center stage in business planning, pricing remains a critical yet frequently overlooked component that directly impacts your bottom line. Let's explore how B2B SaaS companies can develop effective pricing strategies when scaling across different markets.

The Power of Strategic Pricing for B2B SaaS

To discuss the importance of pricing, we’ve invited Krzysztof Szyszkiewicz, co-founder of Valueships, to share some of his knowledge on the topic. Valueships is a boutique consultancy specializing in pricing optimization for technology companies that has demonstrated how thoughtful pricing adjustments can boost revenues by approximately 10%. This significant improvement comes not just from changing price points but through holistic approaches to how products are packaged, positioned, and upsold.

As Kris notes, "Pricing is an umbrella word for many different things. It's how you package your products, how you price your products, how you build your products with a core value metric you are using, and how you're upselling your clients."

Starting Your International Pricing Journey

Begin with Internal Benchmarks

When expanding internationally, many companies mistakenly believe they need extensive customer feedback before establishing pricing. However, a more practical approach is to start with internal benchmarks:

• Purchasing Power Index: This tool helps understand the relative buying power in different countries

• Competitor pricing strategies: Analyze how similar solutions are priced in target markets

• Internal cost structures: Consider how your operational costs might vary by region

Kris advises, "If you want to understand how you should price internationally, maybe using the purchasing power index, how people adopt a given technology, what competitors there are, what profitability we might expect - those can be good internal benchmarks that you could use in order to predefine your pricing strategy."

These data points provide a foundation for preliminary pricing that can be refined as you gather more market-specific information. 

Understanding Market-Specific Competition

When entering new markets, your competitive landscape often changes dramatically. The key is understanding who is solving the same problems for your potential customers, even if they're not direct competitors.

The Jobs-To-Be-Done framework proves invaluable here. As Kris explains, "Jobs-To-Be-Done helps you understand what other companies, who are not necessarily your direct competitors, are solving for the same job."

Rather than focusing solely on feature comparisons, this approach asks:

1. What job is the customer trying to accomplish?

2. What solutions are they currently using? 

3. How does your offering provide superior value for that specific job?

This analysis might reveal that in some markets, your competition includes manual processes or entirely different categories of software. As Tamara Ceman recommended in a previous blog article, a comprehensive analysis of the competitive landscape should always include potential partners and adjacent solution providers, and should extend to elements such as pricing strategies, feature sets, marketing approaches and customer bases, as all these insights can help you identify potential differentiation opportunities and market gaps, as well as influence your pricing strategy.

Localization Beyond Language

Currency Considerations

One of the strongest recommendations for international expansion is localizing your pricing currency. Displaying prices in the local currency builds trust and reduces cognitive friction for potential customers.

Kris emphasizes, "It turns out that in most cases, it's worth having at least local currency in place. If you're a US company going to Europe, at least make sure you are going with Euro."

By presenting pricing in Euros for European markets, you eliminate concerns about conversion rates, fees, and fluctuations, demonstrating a commitment to serving that market properly and avoiding the risk that these small friction points combine to erode your potential customers’ trust in your brand, as Vincent Jong pointed out in a recent article.

Payment Methods and Billing Systems

Payment preferences vary significantly across regions. As Kris recommends, having a local payment provider that is trusted in the market can really make a difference. This is especially true for companies relying on product-led growth, where customers will typically move at their own pace throughout the different steps of the buying journey, until they subscribe to your service. Adapting to these preferences isn't just about convenience: it's about showing cultural awareness and reducing barriers to purchase. Companies that integrate local payment providers often see measurable improvements in conversion rates.

Messaging and Value Proposition

Cultural differences extend to how value is perceived and communicated. Kris advises: "Some countries are more cost-sensitive. While other ones are more value-sensitive." Understanding these nuances allows you to structure offers that align with local business practices and priorities and to craft the most effective messaging for each market.

In a previous blog post, our guest Graziella Moschella discussed extensively the key role of localization in shaping a brand’s messaging for a specific market.

Other elements that can vary significantly from one market to the other are purchasing power and willingness to pay. These variables should be considered carefully when putting together a value proposition and a pricing strategy, as advised by Ayon Bhattacharyya, who shared with us some surprising data: the willingness to pay in Southeast Asian markets is 33% below average, as opposed to 28% above average in the Nordics.

Measuring Success: Key Performance Indicators 

To evaluate whether your international pricing strategy is working, Kris recommends focusing on these critical metrics:

Average Revenue Per User (ARPU)

This fundamental metric helps determine if your pricing is effectively capturing value. When tracked by region, ARPU can reveal:

• Markets where your value proposition is strongest  

• Opportunities for price optimization

• Segments where you might be leaving money on the table

Kris emphasizes, "Pricing-wise, especially for technologically differentiated products, it's worth understanding what your average revenue per user is."

Expansion Revenue

This metric measures whether customers spend more with you over time, through upgrading, adding users, or purchasing additional features. Strong expansion revenue suggests your pricing model successfully encourages customers to increase their investment as they realize more value.

Margin Considerations

While revenue growth is important, maintaining healthy margins across markets is essential for sustainable expansion. Kris advises looking at the full margin, especially in relation to the cost of acquisition. If by looking at this data you realize your customer acquisition cost (CAC) is much higher than in your domestic market, but your pricing strategy has stayed the same (except for maybe converting to the local currency), this added cost is going to be eating away your margin, so it might be worth considering a pricing adjustment.

Your pricing strategy must account for varying customer acquisition costs, support expectations, compliance requirements, and partnership needs to ensure profitability across all markets.

Case Study: From Local Champion to Global Contender

As an example, Kris recommends looking at the journey of Brand24, a social media monitoring tool that originated in Poland and successfully expanded to the U.S. market. Their approach illustrates several key principles:

1. Evolution over time: They didn't get pricing perfect immediately, but adjusted based on market feedback. As Kris notes, "The CEO used to say that it took them too much time. But in the end, the scaling was a very, very good decision."

2. Value demonstration: They created localized case studies showing how their tool addressed specific challenges in each market. The case studies with global brands they worked with in the Polish market helped establish credibility.

3. Pricing structure: They maintained consistent feature sets across markets but adjusted price points to reflect regional value perception and purchasing power.

This company now generates significant revenue from international markets, with pricing that varies by region, while maintaining consistent margins.

Innovative Pricing Models Worth Considering

While traditional subscription models dominate SaaS, several alternative approaches are gaining traction:

Usage-Based Components

Adding usage-based elements to your pricing can help align costs with value received. As Kris explains, "If you're charging based on usage, you are only being charged when you use the product. So again, the tangibility, your contribution to the value delivery of the client is higher."

This approach works particularly well when usage correlates strongly with value received.

Output-Based Pricing 

Some companies are now charging based on the outputs or deliverables their product enables. So, rather than paying a fixed subscription cost, this model ties pricing directly to something more tangible, making value more immediately perceivable.

Success-Based Pricing

The most advanced pricing models charge based on the actual success and outcomes the customer achieves. While challenging to implement, this approach powerfully aligns the vendor's interests with their customers.

Kris cautions, "If you crack the code in terms of success-based, which is very plugged into the value that you deliver, then you win the game, in my opinion. But it's not for everyone. If you can't prove that this value was delivered by you, and if you're not contributing to the client's success in the end, these models are not for you."

Conclusion: Pricing as an Ongoing Strategy

Strategic pricing for B2B SaaS businesses isn't a one-time decision, but rather a process that requires continuous attention and periodic re-evaluation. The most successful global SaaS companies treat pricing as a core competency, with dedicated resources for monitoring, analyzing, and optimizing their approach across markets.

As Kris emphasizes, "There is no one model that serves them all. Your model should support and should be easy to understand for clients, but also should be scalable for you, scalable for your clients, be predictable, and easy to accept."

By combining data-driven analysis with cultural awareness and flexibility, B2B SaaS companies can develop pricing strategies that accelerate international growth while maintaining healthy unit economics. Remember that pricing communicates value, sets expectations, and directly impacts how customers perceive your commitment to their market.

As B2B SaaS companies expand globally, they should invest the time to develop thoughtful, localized pricing strategies, as the return on this investment will be reflected not just in improved conversion rates but in stronger customer relationships and sustainable competitive advantage. 

In Kris' words: "Pricing is typically not a one and only factor. From my experience, it's really rarely one and only a factor." So while pricing is critical, it must be part of a holistic go-to-market approach that also encompasses product, messaging, and customer engagement. Get the combination right, and you'll be well on your way to international success.

At Undertow, we understand the unique challenges B2B SaaS businesses face in their international expansion efforts, and we commit to helping them establish scalable localization processes that can sustain their growth. Get in touch if you want to find out more about how you can leverage localization to grow your business internationally.