How to Price Software

The fundamental elements to effective software pricing.

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TABLE OF CONTENTS

1. Introduction: Why Pricing Needs a Fresh Look

2. Why Most Teams Struggle

3. What’s Changed in the Market

4. Modern Monetization Models

5. AI and Pricing Strategy

6. Tooling and Pricing Infrastructure

7. Building a Pricing Discipline

8. Closing: Where to Go From Here

Looking for profitable growth?

1. Introduction: Why Pricing Needs a Fresh Look

It's 2025. Pressure on pricing has never been greater, and there’s a whole new level of complexity. Growth expectations are high, budgets are tight, and software companies are navigating shifts that go far beyond product strategy.

Pricing is usually determined once, often too early, and rarely revisited. It’s commonly left to spreadsheets, back-of-napkin math, inherited models, or advice from the loudest voice. Internally, it’s often avoided. Externally, it’s distorted by competitors making promises they can’t back up, or selling strategies that were designed for a different
decade. If you’re aiming to be intentional about growth, what worked to get to this stage likely won’t get you to the next one.

AI features, changing buyer behaviors, software-service convergence, and rising enterprise expectations are all reshaping how companies determine value, and how they should charge for it. The result? Poor value capture, over-discounting, confused packaging, or stalled sales. Not because of the product, but because of how it’s priced.

Whether you’re planning a new AI-based SKU, rethinking monetization to align with new value in your products, or trying to escape the dreaded “spreadsheet sprawl,” the principles in this guide can help cut through the noise, so you can make smarter, faster decisions. It’s not about theoretical models or chasing trends. It’s about how to think clearly about pricing today, and how to build the systems and strategy required to price software with confidence.

2. Why Most Teams Struggle

Most teams today suspect their pricing has issues, but they can’t pinpoint what’s wrong, or what to do about it. At least not in a way that won’t disrupt momentum or cost an arm and a leg.

Some assume they have a problem because salespeople keep discounting. Others hear buyer complaints or watch deals slow to a crawl. But those are just symptoms, and it’s hard to tell the difference between a symptom and a growing trend. The deeper issue usually comes down to how pricing decisions were made (or not made) over time. Further, companies often avoid pricing reviews because they lack the skill, are following the founder’s gut, or are hesitant to have the deep debate that could require core changes that are fundamentally hard, but necessary.

At SPP, we hear these stories from our customers every day. Pricing structures no one wants to own, packages built around internal logic instead of customer value, bloated SKU lists, vague discount rules, and tools that weren’t built for defining pricing in the first place.

On top of that, companies get mixed signals from the market. Some vendors claim AI will solve everything. Others still push legacy pricing “projects” that don’t
reflect how SaaS or modern GTM teams actually work. So pricing can often end up feeling like some kind of mysterious black box, even to experienced teams.

Which leads to another tricky dynamic where companies go too far and over-correct. Piling on more spreadsheets, more approvals, and more processes is rarely the right move. What’s needed is a clearer strategy, sharper execution, and the right infrastructure that enables you to learn and iterate. So you can more efficiently tune your packaging and pricing with multiple rollouts throughout the year. This allows organizations to better tie products to their optimal monetization approach, iterating packaging and pricing alongside the development lifecycle.

We call this continuous monetization.

Get My Copy

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