A common issue in B2B SaaS sales is the presence of a “pricing gap” that discourages customers from upgrading to multi-seat plans. A recent buying experience with the podcasting tool Riverside highlighted this problem, where the jump from individual seats priced at $15 and $24 per month to a business plan costing $500 per month for two linked accounts was too steep for the buyer, according to saastr.com.
The buyer initially subscribed to single-seat plans and was satisfied but hesitated when faced with the business plan’s $6,000 upfront cost, which was required to link two accounts. This pricing gap between the $24 per seat Pro plan and the $500 business plan led to the loss of the account at first, despite the customer’s willingness to pay a price between these two tiers. The sales team likely remained unaware that the pricing structure caused the lost sale.
Pricing gaps often arise where SaaS vendors require customers to “Contact Sales” for plans above a certain threshold, typically around $5,000 annually. This creates a barrier for customers who want to scale incrementally but are forced into expensive plans or multiple individual seats. The Riverside example underscores how such gaps can hinder customer acquisition and growth, reflecting a broader challenge in SaaS pricing strategies.
Riverside has since adjusted its pricing to allow linked accounts at a lower cost, addressing the gap that initially deterred the buyer. This case illustrates the importance of aligning pricing tiers with customer needs to avoid losing potential revenue due to abrupt cost increases, as detailed by saastr.com.