Glossary > Pricing Matrix

Pricing Matrix

A pricing matrix is a tool used by SaaS companies to determine the pricing for their software products. It is a table that lists the different pricing tiers or plans offered by the company, along with the features and benefits included in each plan.

The pricing matrix typically includes several different variables, such as the number of users, the level of support provided, the amount of storage or data transfer allowed, and the availability of advanced features. By using a pricing matrix, SaaS companies can create multiple pricing tiers that cater to different customer segments and provide different levels of value.

SaaS companies also use pricing matrices to experiment with different pricing strategies and to optimize their pricing plans over time. They may offer a free trial or a freemium model to attract new customers and then gradually introduce pricing tiers as customers’ needs and usage levels increase.

A well-designed pricing matrix can help SaaS companies to generate more revenue, increase customer retention, help differentiate the product from competitors, and build a loyal customer base that values the software’s features and benefits.

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