The price of something is the amount someone is willing to pay for it.

That sounds obvious. It is also why pricing is so flaky. There is no clear answer. No formula. At the end of the day, you are guessing. You can make an educated guess — and you should — but it is still a guess.

That is what makes pricing different from a lot of decisions in business. Elsewhere, you can gather most of the information before you commit. Pricing is not like that. You can research, benchmark, and debate until you are blue in the face. Then you still have to put a number in front of a customer and find out what happens.

Pricing has to be tested in the marketplace. Everything else is preparation.

I have been thinking a lot about commercialising a SaaS offering properly — not just what to charge, but what we are selling, what the subscription covers, what stays billable as Professional Services, and how not to paint ourselves into a corner with early customers.

Two parts below: a commercialisation process I keep coming back to, and the learnings that stuck. The idea underneath all of it is relative.

This sequence does not invent certainty. It helps you make a better guess before the market tells you the truth.

Validate the opportunity. Confirm demand, the target customer, and the problem being solved. If you cannot explain who wants this and why, pricing is the wrong conversation.

Research the market. Benchmark competitors, pricing, positioning, and expectations. You are not copying a number. You are building a frame of reference.

Define the offering. Nail the MVP and separate core capabilities from future enhancements. Packaging gets easier when you know what is in the box today.

Estimate delivery effort. Assess implementation, support, and maintenance — and distinguish reusable product work from customer-specific effort. Those should almost never be priced the same way.

Define the support model. Decide what the SaaS fee covers — support, maintenance, API upgrades, forced vendor changes — versus billable Professional Services. Get this wrong and you undercharge forever or surprise customers later.

Design the commercial model. Packaging, recurring SaaS versus one-time services, pricing structure, and how implementation complexity shapes the terms.

Validate internally. Review assumptions with Product, Engineering, Professional Services, and Sales. Treat historical deals as reference points, not precedents.

Launch and iterate. Start simple, learn from early customers, standardise implementations, and evolve pricing over time. This is where the guess becomes evidence.

Book the follow-ups at the outset. Commercialisation dies in silence. Leave alignment to "we'll schedule something later" and you will still be debating assumptions three months in.

Pricing is relative. There is no absolute truth to it.

A number on its own means almost nothing. There is no universal "right" price waiting to be discovered. Price only makes sense relative to something else.

Relative to what the customer gets.

Relative to what else they still need to pay for to make it work — integrations, implementation, third-party products, change management, support.

Relative to the overall cost of getting what they want. Your fee is rarely the whole bill. A small slice of a big investment lands differently than the main ticket.

Relative to competitors.

Relative to what they already pay for your whole offering — modules, seats, services, renewals. A new price lives inside an existing commercial relationship.

And relative to value: what they get versus what they pay. Revenue gains. Cost savings. Risk removed. Time freed up. Without that, "expensive" and "cheap" are just feelings.

Treat pricing as relative and the conversation gets honest. You stop asking "is this the right number?" and start asking "right relative to what?"

That is why willingness to pay matters. Cost-plus feels safe, but customers do not buy your effort. They buy an outcome they can justify against the alternatives.

Define what the SaaS fee includes. If a vendor deprecates an API or forces an upgrade, does the subscription cover that work — or is it Professional Services? Ambiguity here either builds a services business inside your SaaS fee, or creates conflict the first time something breaks outside your control.

It is much easier to reduce a price than increase one. Start with a stronger anchor and negotiate down if needed. Lifting a price after customers have calibrated lower is painful for everyone.

Avoid multiple tiers too early. One clear offering is easier to sell and validate. Tiers feel sophisticated; early on they mostly multiply confusion before you have proved willingness to pay.

Use early customers as learning loops. They validate willingness to pay, refine the offering, and help you convert bespoke work into reusable product. Until the market responds, you are still guessing.

That last point connects to From Service-Led to Product-Led. Absorbing customer-specific work without a plan keeps you stuck in a services mindset. Learn from the bespoke work, then turn the repeatable parts into product. Pricing should reinforce that shift — not fight it.

Pricing is relative. There is no absolute answer. Make the best educated guess you can, then test it.