Many SaaS companies outgrow their original pricing models because it’s often difficult to predict how things will shift with widespread adoption. What starts out as a clean good/better/best tier structure often becomes a tangled web as the business matures.

In the early days, the goal for SaaS companies is adoption. You want customers to try your product, love it and spread the word. But at some point, your pricing needs to do more than attract new users. It needs to support scale, speak to increasingly complex buyers and protect long-term profitability.

In this article, I’ll share what I’ve learned about scaling pricing models across product-led growth (PLG), hybrid and enterprise sales environments. This isn’t about theory. It’s about what actually works when you’re moving from $100 million to $1 billion in revenue.

The Freemium Trap

Freemium models are powerful in the early stages. They remove friction and drive growth—a zero-commitment way to encourage new users. But free models can create monetization challenges if you’re not careful.

The key mistake I see is over-generosity, by giving away too many premium features for free. Take Slack, for example. Slack saw incredible adoption early on. Everyone loved Slack! But conversion to paid plans required them to pull back and limit things like message history and integrations. Calendly, too, experienced quick and widespread adoption, but had to shift from a pure freemium model to charging for more collaborative features like team scheduling. Brands have to be careful that their move to monetization doesn’t feel like a bait-and-switch for users.

Freemium should act as a funnel, a way to identify high-value users who are ready to grow. It should not subsidize heavy usage. A free tier should have limits on time or features or have credit caps in place to encourage progression.

Tiered And Usage-Based Pricing

As your product becomes more complex, your pricing should evolve to reflect that. Customers increasingly expect to pay for what they use, especially when AI-powered features and real-time compute are involved. While you want a system that grows with adoption and usage, you want to make sure the progression makes sense and doesn’t get overly complicated.

At this stage, we often see a mix of:

• Tiered access (starter, pro, enterprise)
• Usage-based pricing (based on compute, API calls, storage, etc.)
• Paywalls around admin controls, security and support

Support is a major lever here. The difference between free and paid shouldn’t be just about features. It should also improve customer service. That’s especially true for large enterprise users who expect white-glove treatment.

Companies like Notion have done a good job evolving from simple personal plans to structured team-based tiers with clear feature differentiation. Splunk, where I worked previously, maintained multiple models for different customer types, including perpetual licenses for on-prem users and compute-based pricing for cloud. That kind of flexibility is crucial, but it also means you need strong internal alignment to manage the complexity behind the scenes.

When Product-Led-Growth Isn’t Enough

At a certain scale, PLG alone doesn’t address the procurement processes, security reviews and compliance requirements expected by larger companies. A self-serve model can’t support custom terms, SSO, SOC2 and legal reviews.

That’s when you need to introduce a hybrid or sales-led model. Airtable is a great example. The AI-operations platform started with PLG but added sales teams and built out an “Enterprise” SKU with deployment support and admin features. Datadog also started self-service, but now offers a sophisticated sales offering with multiple SKUs targeting specific buyer personas.

This doesn’t mean PLG stops working. It means you need to design pricing (including the pricing metric) and packaging that supports both bottom-up and top-down growth. And that includes arming your sales teams with the right tools and incentives.

Avoiding Common Pitfalls That Derail Scaling

Scaling pricing isn’t just about adding more SKUs. It’s also about knowing what to avoid. Here are a few common traps:

Holding On To Freemium Too Long: Eventually, you need to move users along. That doesn’t mean killing your free tier—just bounding it more tightly with time-based trials or limited functionality.

Poor SKU Packaging: Too many variants create confusion, internally and externally. You end up with salespeople discounting core products because the “lite” version isn’t selling.

Misaligned Discounting: Sales might offer discounts that don’t align with your self-serve pricing, causing tension and eroding value. At Splunk, we saw this when we tried to introduce a lower-priced version that didn’t get traction but confused our sales teams.

Getting the pricing model or metric wrong: One of the most painful mistakes is anchoring on the wrong value metric. Charging per user when the actual value is usage or outcomes, for example. This can create churn or under-monetization. I’ve seen companies rethink their entire model years in, once it became clear that the original metric was limiting upsell potential or misaligned with how customers derived value. Spend time upfront identifying the right axis for pricing (compute, seats, transactions, data processed) and pressure test it with customers.

I think about pricing maturity as a journey that follows four stages: 1) freemium with basic tiers; 2) usage-based elements layered in with a metric that anchors on value; 3) differentiated enterprise offerings with support and compliance baked in; 4) pricing governance: deal desks, approval flows and discount controls.

That last piece is critical. Build governance early. Don’t wait until the pressure is on to close a big deal. I’ve seen founders discount 75% just to land a logo and then get stuck with that pricing for years. Instead, frame discounts as one-time incentives. Structure contracts with sunset clauses. And set expectations that value will increase along with price.

At the end of the day, smart pricing is not about nickel-and-diming your users. It’s about aligning value, cost and growth. And if you do it right, your pricing model becomes one of your biggest levers for scale.

This article was also published on Forbes. See here.