Tomasz Tunguz Blog · 2017-05-09 · 3313d

Performance Pricing: Why It's a Challenging Go-to-Market Strategy for SaaS

Performance pricing for SaaS companies, while theoretically rational, creates significant market challenges by shifting pricing power to customers. The model commoditizes categories, increases churn risk, and undermines sales team leverage, making it viable only for startups with substantially superior products and efficient self-serve acquisition.

2 metrics· Cited 0× in the knowledge base ·Open source ↗

Metrics in this report

Blog Readership

150000subscribers

current

Tomasz Tunguz's audience of founders and operators

Performance-Based Fee as Percentage of Value

10-15%

theoretical range

Customer willingness to pay for performance-priced SaaS