In a recent video on the "AI, SaaS & Agentic Pricing with Monetizely" channel, SaaS pricing expert Akhil Gupta from Monetizely addresses a critical question that many SaaS executives struggle with: how pricing and packaging function as tools for competitive positioning. Gupta draws on insights from his book "Price to Scale" to demonstrate that pricing decisions are fundamental strategic choices rather than merely operational considerations.
The Positioning-Pricing Connection
Akhil Gupta begins with a powerful premise that reframes how we should think about pricing challenges: "Most pricing problems are not pricing problems. They are just the casual impact of poorly understood and communicated positioning." This insight suggests that before companies dive into pricing tactics, they must first establish clarity around their market position.
Pricing isn't just about determining what to charge—it's a strategic decision that communicates your value proposition to the market. When properly aligned with your overall positioning strategy, your pricing structure tells a cohesive story about your offering.
Three Ways Pricing Functions as a Competitive Positioning Tool
Gupta outlines three critical ways that pricing and packaging serve as competitive positioning tools:
1. Price Point Signals Quality Positioning
The price you set immediately shapes customer perceptions about your product's quality relative to competitors.
"Premium pricing communicates premium value, while value pricing suggests accessibility," Gupta explains. This price-quality association creates immediate expectations in the customer's mind.
When you position yourself at a premium price point—say, 30% above alternatives—you're making a bold statement about superior quality or capabilities. Importantly, this premium positioning must be substantiated by the actual product experience. Customers will expect tangible differences that justify the higher price.
2. Package Structure Communicates Target Segments
Your tiering strategy and feature allocation reveal which customer segments you're prioritizing.
"When you examine your tiers and what features live in each tier, you are telling the market who your ideal customer is," says Gupta. This structuring determines which competitors you'll be compared against in the marketplace.
For example, placing enterprise-focused features in higher tiers signals an upmarket positioning strategy. Conversely, simplified packages with limited customization options typically target SMB segments. These choices shape not only who buys your product but also which competitors they'll evaluate you against.
3. Pricing Metrics Reflect Value Delivery Model
The way you structure your pricing metrics—whether per seat, per transaction, or consumption-based—frames how customers perceive the value they receive.
"Whether you charge per seat, per transaction, or through a consumption model, your pricing metric frames how customers perceive value," Gupta notes. This choice becomes particularly strategic when you diverge from industry norms.
When competitors charge one way and you choose a different approach, you're making a statement about your differentiation. This can reshape how customers evaluate your offering compared to alternatives.
Real-World Application: DocuSign's Strategic Pivot
To illustrate these principles in action, Gupta shares DocuSign's strategic response when facing commoditization pressures:
"When they faced commoditization of their core e-signature functionality, they recognized competitors were undercutting them on basic signature capabilities. Their strategic response wasn't to engage in a race to the bottom."
Instead of competing on price for basic e-signature capabilities, DocuSign transformed their positioning by:
- Shifting pricing emphasis to advanced features and workflows
- Creating a tiered structure that maintained premium positioning
- Transitioning from usage-based pricing to feature-based pricing
This strategic shift allowed DocuSign to continue charging premium rates by positioning their solution as comprehensive document workflow management rather than just an e-signature tool. The case demonstrates how pricing structure can reinforce a company's differentiation narrative.
Aligning Pricing with Positioning for Maximum Impact
The core insight Gupta emphasizes is that effective competitive positioning requires deliberate alignment between pricing, packaging, and your value proposition.
"When your pricing structure aligns with your value proposition, it creates a coherent narration that helps customers understand why you are different and potentially worth a premium," he explains.
This alignment must be intentional and cross-functional. Gupta warns against a common organizational pitfall: "Too often, companies develop positioning in their marketing department while pricing decisions happen separately in finance or product." This disconnection creates mixed signals that confuse customers and weakens competitive standing.
Moving Forward: Strategic Pricing as Competitive Advantage
For SaaS executives looking to strengthen their market position, the key takeaway is clear: pricing and packaging decisions should flow directly from your positioning strategy rather than being treated as separate tactical concerns.
When properly executed, this alignment creates a reinforcing cycle where pricing validates positioning, and positioning justifies pricing. The result is a stronger competitive stance that resonates with your target customers and differentiates you meaningfully from alternatives.
By treating pricing as a strategic tool rather than just a revenue mechanism, SaaS companies can create more coherent go-to-market strategies that communicate value more effectively and defend against competitive pressures.