Seat License Pricing Elasticity

Elasticity = (Δ Q / Q) / (Δ P / P). Inelastic (>−1) means price hike grows revenue. Sticky tools (Salesforce, Workday) typically inelastic.

New MRR
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Revenue Change
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% Change
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Old price/seat—
New price/seat—
Current seats—
Elasticity coefficient—
Projected new seats—
Old monthly revenue—
New monthly revenue—
Revenue change—
Percent change—
Ad Space

Seat License Pricing Elasticity quantifies how sensitive your customers are to price changes. Inelastic products (e<−1) like Salesforce, Workday can raise prices with minimal seat loss. Elastic products (e<−1) lose more seats than revenue gain.

Reading the Elasticity Coefficient

-0.5: highly inelastic — raise prices freely. -1.0: unit elastic — break-even on price changes. -2.0: highly elastic — losing seats faster than revenue gain. Most B2B SaaS is inelastic (-0.3 to -0.6). Consumer apps more elastic (-1.0 to -2.5).

Estimating Your Elasticity

Survey willingness-to-pay. A/B test price tiers. Look at historical price changes — measure seat loss. Use lookalike public companies. Typically inelastic for: integrations many, switching cost high, mission critical, monopolistic position.

Strategic Price Increases

Most B2B SaaS underpriced. Annual 5-10% increase on existing accounts (with grandfathering carve-out). New prices for new customers. Bundle high-value features into Enterprise tier. Reduce volume discounts to recapture.

Last updated May 2026. Sources: ProfitWell Pricing Research.