In B2B transactions, pricing is the architecture behind every customer relationship you build, scale, and sustain. A strong B2B pricing strategy sets the conditions for long-term growth, higher customer lifetime value (LTV), and smarter expansion. Getting it right takes a clear understanding of how your customers think, buy, and measure success. In 2024, over 94% of pricing leaders in B2B software-as-a-service (SaaS) reported revising their pricing at least once a year.

Below, we’ll explain how to build a B2B pricing strategy that works for you.

What’s in this article?

• What are the big differences between B2B and B2C pricing models?
  
• What pricing structures work best for B2B businesses?
  
• When should a business adopt contract-based or negotiated pricing?
  
• How do you match pricing strategy to long-term customer value?
  
• What data sources should inform your B2B pricing decisions?
  

What are the big differences between B2B and B2C pricing models?

B2B and B2C pricing strategies work for different purchase environments. What works for individual customers can fail when applied to institutional buyers. Here’s where the distinction matters most.

How pricing is structured

In B2B transactions, pricing is usually flexible by design. It shifts based on contract terms, deal size, usage volume, or customer segment. It’s common for two companies that buy the same product to pay different amounts because what they’re actually paying for differs. B2B contracts are often bespoke, discounts are negotiated, and prices might not even be listed on the website.

In B2C transactions, pricing is generally fixed and visible. A customer expects to see the cost up front and pay that exact amount at checkout. The process is designed for speed and scale. There’s one price for all, with no conversation required.

How buyers make decisions

B2C pricing is built for individuals who make fast, emotionally driven decisions. A B2C customer asks, “Do I want this?” B2B pricing supports long buying processes with multiple stakeholders where justification is mandatory. A B2B customer asks, “Will this deliver a return on investment (ROI)?” That difference changes the way pricing is presented, the level of transparency required, and the justification needed to close the sale.

In B2C transactions, value is often subjective, based on factors such as convenience, aesthetic appeal, and emotional resonance. Willingness to pay is shaped more by perception than by quantifiable gain. A B2C customer might balk at a $12 monthly subscription if they don’t feel like they’ll use it often enough.

In B2B transactions, pricing is often more about measurable business value: hours saved, costs avoided, revenue unlocked. What you charge is tied to the size of the impact you deliver. A B2B customer might agree to a $100,000 annual contract because the software replaces $500,000 in labor costs.

Volume, frequency, and relationship context

B2C transactions are typically subscriptions or one-time purchases at low volumes. B2B transactions can involve large-scale deployments, multiyear contracts, or staggered rollouts.

This makes pricing mechanics more complicated. Sellers must factor in:

• Volume-based discounts

• Commitment-based pricing (e.g., lower rates in exchange for a longer term)

• Pricing tied to usage metrics (e.g., per gigabyte of data, per user)

B2B pricing reflects relationship depth, while B2C pricing reflects transaction simplicity.

Type of strategy involved

In B2C transactions, pricing is often part of the marketing strategy, designed to attract impulse purchases or reinforce brand positioning.

In B2B transactions, pricing is an operational strategy. It needs to account for procurement requirements, budget cycles, multiyear forecasting, and expansion potential. It also needs to work with more complicated infrastructure, such as invoicing, collections, and approval workflows.

What pricing structures work best for B2B businesses?

There’s no single “best” B2B pricing model. What works depends on how your customers use your product, how they measure value, and what makes the relationship sustainable for them and for you.

Here are the most common structures B2B businesses rely on and where each one fits best.

Per-user (or seat-based) pricing

This model charges a fixed amount for every user added to the account. It’s straightforward, predictable, and scales neatly with team size. It’s best suited for products where the value grows with the number of users, such as collaboration tools, customer relationship management (CRM) systems, and project management software.

This kind of pricing is transparent and creates clean upgrade paths as customers grow. Watch out for login-sharing work-arounds that undercut seat counts.

Usage-based (metered) pricing

With this model, customers pay based on what they actually use, measured in factors such as application programming interface (API) calls, data processed, and tasks run. This is ideal for tools where usage varies widely between customers or where the value delivered is tied to output. It’s popular with infrastructure tools, platforms, and automation services.

This kind of pricing has a low barrier to entry and carefully matches price and customer value. But it can make revenue less predictable, and some customers dislike invoice variability.

Tiered pricing

This model offers packages with ascending feature sets and limits (e.g., Starter, Pro, Enterprise). It lets you serve multiple segments without building multiple products and fits businesses with broad customer bases or products that provide increasing value at scale.

Tiered pricing helps customers choose the version of your product that best fits their needs today, while subtly steering them towards higher-value tiers as they grow. This model simplifies upselling and encourages account growth, but it can be a challenge to set the correct number of tiers.

Flat-rate pricing

With this model, there’s a single, set price that’s the same for everyone. All features are included and customers have access to unlimited use. It’s best suited for niche products with uniform usage patterns and clear boundaries.

This model is simple, both for buyers and your internal billing ops team. But you might undercharge high-value customers and overcharge light users.

Volume pricing

With this model, per-unit cost drops as purchase quantity increases. It’s common in wholesale, manufacturing, and hardware distribution. It’s ideal for physical goods or digital services where cost per unit falls at scale.

This model incentivizes bigger orders, creates stickier customer relationships, and rewards loyal customers. But you have to ensure that the pricing ladder works with your margin structure.

Project-based or hourly pricing

This kind of pricing is used mostly for services such as consulting, development, and implementation. You charge either a flat fee for a defined project or an hourly fee based on time spent. It’s best suited for custom engagements where the scope varies from client to client.

This model is flexible and easy to justify when tied to clear deliverables. But it can be hard to scale and is often disconnected from the long-term value created.

Contract-based pricing

This kind of pricing enables negotiated deals customized for large or complex accounts. Prices, terms, and scope are all bespoke. Contract-based pricing fits enterprise clients with unique needs, long sales cycles, or multiyear commitments.

This model maximizes deal flexibility and revenue potential, but it’s slower to close and harder to implement without strong systems.

Many B2B companies blend models. A SaaS platform might offer tiered subscriptions with usage-based overages plus custom contracts for enterprise clients. What matters most is that your pricing reflects how your product creates value and that your systems can support it.

When should a business adopt contract-based or negotiated pricing?

Contract-based pricing works for any situation where standard pricing doesn’t fully reflect the scope, scale, or specifics of a customer relationship. Here are some scenarios when it makes sense to use contract-based or negotiated pricing.

You’re working with a large client

Enterprise buyers typically expect pricing that reflects their size, complexity, and long-term potential. That might mean:

• Lower per-unit pricing for high volumes

• Multiyear commitments with price locks or escalators

• Custom packaging (e.g., bundling features or services not available in public plans)

At this scale, the cost of negotiation is covered by the value of the deal. Trying to close a Fortune 500 account with a fixed pricing page is often a nonstarter.

The product or service requires customization

If your offering changes meaningfully from one customer to the next—whether it’s custom implementation, variable scope, or specialized onboarding—then contract-based pricing is often the only way to price accurately.

Fixed pricing assumes predictability. But if one deployment takes 10 hours and another takes 200, your pricing needs to reflect that difference or you’ll lose profit, incorrectly price the work, or both.

The terms are nonstandard

Sometimes the customer wants nonstandard contract terms. Maybe the customer wants net 60 payment terms instead of net 30, a unique service-level agreement (SLA) or uptime guarantee, or a phased rollout across multiple regions.

In those cases, the price you quote needs to absorb the risk or effort those terms create. A contract gives you room to set it.

It’s a long-term customer relationship

If a customer is committing for two or three years or integrating your product into important operations, then the relationship goes beyond a basic transaction. Pricing becomes part of a broader agreement that looks at how usage or needs might change over time and what kind of ongoing support the customer might need throughout the relationship.

Contracts allow you to price in context and account for the full arc of the partnership.

You find yourself frequently adjusting your standard pricing

You can add only so many tiers or plan types before the structure becomes unwieldy. If you find yourself repeatedly making exceptions to your pricing model (e.g., adding manual discounts, bundling features ad hoc, customizing invoices), you’re already doing something similar to contract pricing.

Rather than stretch a fixed model past its limits, you might want to formalize custom pricing as a standard option for certain customer profiles.

How do you match pricing strategy to long-term customer value?

The best pricing strategies are built to sustain customer relationships over years. That means pricing in a way that matches the value customers actually realize over time. Here’s what that looks like.

Focus pricing on outcomes, not inputs

Customers stay when they consistently see a clear return on what they pay. Pricing models that tie directly to customer outcomes, such as usage-based pricing that scales with actual impact, tend to create stronger loyalty.

Think beyond seats or licenses and ask what the clearest signal is that the product is creating value. If you can price according to that metric (e.g., per workflow automated, per transaction processed), you naturally align your revenue with customer milestones.

Land small and expand strategically

Many businesses use a “land and expand” approach: start with an entry point that makes adoption easy, then build larger deals over time as value becomes undeniable.

Design pricing that enables growth, such as an easy, affordable starter plan with natural upsell paths. Assure that expansions are easy to implement: customers shouldn’t need to renegotiate contracts every time they grow.

Reward commitment without eroding value

Discounts for annual contracts or multiyear agreements can drive customer retention, but they should be calibrated carefully. Offer incentives that make long-term commitments feel smart: for example, a 10%–15% discount for annual prepayment. Be careful with deep discounting when you close deals, however, because this can undermine perceived value and hurt your ability to expand later.

Avoid underpricing early

A common mistake is pricing too low at the start, then trying to correct that later. Customers anchor to the first price they see. If that initial price doesn’t reflect the real value you deliver, you set yourself up for painful renegotiations—or churn—later.

Use promotional discounts or additional features to lower initial barriers rather than cut core prices, and ensure customers understand the full, real value from Day 1.

Measure and adjust based on actual LTV

LTV is a feedback loop. After any pricing change, track whether LTV improves, whether acquisition costs stay sustainable, and whether expansion rates increase.

Watch for patterns: are customers on certain plans upgrading faster or are some pricing models producing longer retention?

From there, refine pricing to produce new sales and maximize the value of customers.

Design pricing to support customer success

Ultimately, pricing should reflect the outcome of using your product. If customers succeed quickly and grow steadily, your pricing should make that easier and natural, not punitive.

Build room for success into your plans and avoid surprise overage fees that penalize fast growth. Instead, set clear thresholds and create positive incentives to expand usage.

What data sources should inform your B2B pricing decisions?

Good B2B pricing decisions are grounded in a full view of customer behavior, market context, and financial reality. The right data turns pricing from a risk into a competitive advantage. Here’s what to focus on.

Customer feedback and usage patterns

Start by listening to your customers—both what they say and what they do.

• Direct feedback: Interviews and surveys can show willingness to pay, value perceptions, and friction points.

• Behavioral data: Usage patterns often reveal which features or services customers value most and where they’re hitting limits.

Together, these signals help you price according to the value customers actually receive.

Market and competitor pricing

Your competitors’ pricing provides important context. It can show:

• The range of acceptable prices in your category

• How competitors package features, structure tiers, and use usage caps or discounts

• Where you can credibly charge more or where differentiation needs to be sharper if you’re pricing at a premium

The goal is to price relative to perceived alternatives while staying true to your unique value.

Cost structure

Even if you’re not using strict cost-plus pricing, you need to know your margins:

• Factor in production, delivery, support, and operational costs.

• Model how discounting, payment terms, and usage variability impact unit economics.

Pricing without considering cost structure can risk undermining profitability, especially as customers scale.

Sales and win-loss data

Your CRM system is a rich source for pricing insight:

• Analyze where deals are lost due to price versus other factors.

• Track which pricing tiers or discount levels lead to faster or bigger deals.

• Watch for patterns across customer segments; small businesses might be more price-sensitive, while enterprise buyers might prioritize flexibility or service level.

This data grounds your assumptions about price sensitivity in real-world outcomes.

Customer segmentation

Different customers extract different types of value, and pricing should reflect that:

• Segment by industry, company size, use case, geography, or maturity stage.

• Understand which segments generate the highest LTV and where pricing flexibility drives the most expansion.

Precision segmentation lets you design packages and price points that match actual customer needs, not averages.

Product usage and value metrics

Pricing is strongest when it aligns closely with the value delivered:

• Identify usage metrics that correlate with customer ROI (e.g., number of workflows automated, transactions processed, or API calls made).

• Build pricing models around those metrics where possible, rather than arbitrary inputs such as the number of seats.

Value-based pricing works only if you know exactly how customers experience success with your product.

External market conditions

Macroeconomic factors such as inflation, supply chain disruptions, and changing tech budgets can and should inform pricing moves. Watch market signals for when pricing power is rising or when affordability concerns might demand more flexible models. In industries prone to cyclical spending, timing matters: a price increase during a downturn might do more harm than good.

LTV and churn rates

Ultimately, pricing should support strong customer economics over time:

• Track LTV and churn across different plans, customer cohorts, and acquisition channels.

• After any pricing change, measure whether retention improves, expansion rates increase, and customer acquisition cost stays sustainable.

Good pricing decisions both raise average revenue per user and strengthen the overall health of the customer base.