What inputs does the SaaS Pricing Strategy Calculator need?

It takes 5 inputs: cogs_per_user (default 28), target_gross_margin_percent (default 80), target_payback_months (default 8), cac (default 450), competitor_price (default 89). Outputs returned: recommendedPrice, marginFloor, paybackFloor, gapVsCompetitor / competitorGrossMargin.

Can I verify the SaaS Pricing Strategy Calculator with a worked example?

Yes. With cogs_per_user = $2, target_gross_margin_percent = 80, target_payback_months = 12, cac = $100, competitor_price = $89. the tool returns marginFloor = $10, paybackFloor = $10.33 (= 2 + 100/12), recommendedPrice ≈ $10.33.

Where does the SaaS Pricing Strategy Calculator get its benchmark data?

Reference data is sourced from: OpenView SaaS Benchmarks 2024 (CAC payback percentiles) (as of 2024).

What can the SaaS Pricing Strategy Calculator not tell me?

Known limitations: Willingness-to-pay is context-dependent and cannot be inferred from costs alone. A price floor says "do not go below", not "this is the right price". No value-based pricing logic. For that, pair the output with customer interviews and competitive benchmarking.

Methodology: SaaS Pricing Strategy Calculator

1. Scope

Derives a monthly price floor from gross-margin and CAC-payback constraints. It is not a willingness-to-pay estimator and does not run Van Westendorp or conjoint analysis.

2. Inputs and outputs

Inputs

cogs_per_user number (currency/mo) default: 28
target_gross_margin_percent percent default: 80
target_payback_months number default: 8
cac number (currency) default: 450
competitor_price number (currency/mo) default: 89

Outputs

recommendedPrice

max(marginFloor, paybackFloor) (primary value).
marginFloor

cogs_per_user / (1 − target_gross_margin).
paybackFloor

cogs_per_user + cac / target_payback_months.
gapVsCompetitor / competitorGrossMargin

recommendedPrice − competitor_price, and the margin the competitor price implies at your COGS.

Engine source: src/lib/saas-pricing-strategy-calculator/engine.ts

3. Formula / scoring logic

margin_floor  = cogs_per_user / (1 - target_gross_margin)
payback_floor = cogs_per_user + cac / target_payback_months
recommended   = max(margin_floor, payback_floor)

4. Assumptions

The payback floor is cogs_per_user PLUS cac amortised over the target payback months — not cac divided by (months × margin).
Price floor is a minimum, not a market-clearing price. Discovery (user interviews, A/B pricing) sets the ceiling.
No tiered-pricing logic — one user, one price.

5. Data sources

OpenView SaaS Benchmarks 2024 (CAC payback percentiles) as of 2024

6. Known limitations

Willingness-to-pay is context-dependent and cannot be inferred from costs alone. A price floor says "do not go below", not "this is the right price".
No value-based pricing logic. For that, pair the output with customer interviews and competitive benchmarking.

7. Reproducibility

Input
cogs_per_user = $2, target_gross_margin_percent = 80, target_payback_months = 12, cac = $100, competitor_price = $89.

Expected output
marginFloor = $10, paybackFloor = $10.33 (= 2 + 100/12), recommendedPrice ≈ $10.33.

8. Change log

2026-04-24 methodology page first published.

Worked example

Run live against the same engine this site ships (/engines/saas-pricing-strategy-calculator.js). The inputs and outputs below are recomputed on every build and independently re-verified in CI — they are never hand-authored.

Input

tool: saas_pricing_strategy
cogs_per_user: 28
target_gross_margin_percent: 80
target_payback_months: 8
cac: 450
competitor_price: 89

Output

primaryLabel: Recommended monthly price
primaryValue: 140
primaryFormat: currency
summary: Price floor takes the higher of margin requirement and CAC payback requirement.
metrics[0].label: Margin floor
metrics[0].value: 140
metrics[0].format: currency
metrics[1].label: Payback floor
metrics[1].value: 84.25
metrics[1].format: currency
metrics[2].label: Gap vs competitor
metrics[2].value: 51
metrics[2].format: currency
metrics[3].label: Competitor gross margin
metrics[3].value: 68.54
metrics[3].format: percent
warnings[0]: Competitor price is below your target margin floor under current COGS.
assumptionsEcho.cogs_per_user: 28
assumptionsEcho.target_gross_margin_percent: 80
assumptionsEcho.target_payback_months: 8
assumptionsEcho.cac: 450
assumptionsEcho.competitor_price: 89

Frequently asked questions

What does the SaaS Pricing Strategy Calculator calculate?: Derives a monthly price floor from gross-margin and CAC-payback constraints. It is not a willingness-to-pay estimator and does not run Van Westendorp or conjoint analysis.
What inputs does the SaaS Pricing Strategy Calculator need?: It takes 5 inputs: cogs_per_user (default 28), target_gross_margin_percent (default 80), target_payback_months (default 8), cac (default 450), competitor_price (default 89). Outputs returned: recommendedPrice, marginFloor, paybackFloor, gapVsCompetitor / competitorGrossMargin.
What formula does the SaaS Pricing Strategy Calculator use?: The exact computation is: margin_floor = cogs_per_user / (1 - target_gross_margin); payback_floor = cogs_per_user + cac / target_payback_months; recommended = max(margin_floor, payback_floor)
Can I verify the SaaS Pricing Strategy Calculator with a worked example?: Yes. With cogs_per_user = $2, target_gross_margin_percent = 80, target_payback_months = 12, cac = $100, competitor_price = $89. the tool returns marginFloor = $10, paybackFloor = $10.33 (= 2 + 100/12), recommendedPrice ≈ $10.33.
Where does the SaaS Pricing Strategy Calculator get its benchmark data?: Reference data is sourced from: OpenView SaaS Benchmarks 2024 (CAC payback percentiles) (as of 2024).
What can the SaaS Pricing Strategy Calculator not tell me?: Known limitations: Willingness-to-pay is context-dependent and cannot be inferred from costs alone. A price floor says "do not go below", not "this is the right price". No value-based pricing logic. For that, pair the output with customer interviews and competitive benchmarking.