Seat License Pricing Elasticity
Elasticity = (Δ Q / Q) / (Δ P / P). Inelastic (>−1) means price hike grows revenue. Sticky tools (Salesforce, Workday) typically inelastic.
| Old price/seat | — |
| New price/seat | — |
| Current seats | — |
| Elasticity coefficient | — |
| Projected new seats | — |
| Old monthly revenue | — |
| New monthly revenue | — |
| Revenue change | — |
| Percent change | — |
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.