The Three Pricing Metrics That Actually Matter

Most SaaS companies track MRR, churn, and CAC religiously. But when it comes to pricing health, these metrics only tell part of the story. If you want to know whether your pricing is actually working, focus on three numbers.

1. Average Revenue Per User (ARPU). This is your pricing efficiency score. If ARPU is flat or declining while your product improves, your pricing isn't capturing the additional value you're delivering. Track ARPU by cohort and segment. A healthy business shows ARPU increasing over time as customers adopt more features and move to higher tiers.

2. Net Revenue Retention (NRR) / Expansion Revenue Rate. This tells you whether your pricing model rewards growth. If customers can get more value from your product without paying more, you have a pricing leak. The best SaaS companies achieve 120%+ NRR because their pricing naturally expands as customers succeed. Usage-based components, seat-based scaling, and well-designed tier structures all contribute to healthy expansion.

3. Price Sensitivity by Segment. Not all customers respond to pricing the same way. Running Van Westendorp or Gabor-Granger studies by customer segment reveals where you have pricing power and where you don't. Startups may be highly price-sensitive; enterprise buyers may not blink at 3x the price if the value story is clear. This data drives segment-specific packaging and pricing that maximizes revenue across your entire customer base.

Together, these three metrics give you a complete picture of pricing health. Track them quarterly, and you'll catch pricing problems long before they show up in your churn numbers.