Sales & Conversion
Personas
SaaS & Startup
Time to ROI
Medium-term (3-6 months)
Here's something that'll make you uncomfortable: your best customers shouldn't get the biggest discounts.
I know, I know. It goes against everything we've been taught about customer loyalty and volume pricing. But after working with dozens of SaaS and e-commerce clients, I've discovered that traditional discount strategies are actually killing your revenue potential with high-usage customers.
Most businesses fall into the same trap - they see a customer using their product heavily and immediately think "discount time!" They offer volume discounts, loyalty pricing, or enterprise deals. The result? You're literally paying your best customers to use more of your product.
The reality is counterintuitive: high-usage customers often have the highest willingness to pay. They're getting massive value from your product, they're deeply integrated into their workflows, and switching costs are enormous. Yet we're training them to expect cheaper pricing as they scale.
In this playbook, you'll discover:
Why volume discounts destroy profit margins with your most valuable customers
The psychology behind high-usage customer pricing expectations
How to identify when discounting actually makes sense vs. when it's revenue suicide
Alternative strategies that increase customer satisfaction AND revenue
The exact framework I use to determine pricing for power users
Let's dive into what the industry gets wrong about high-usage customer pricing, and what actually works in practice.
Industry Reality
What every business thinks they know about power user pricing
Walk into any SaaS company boardroom or e-commerce strategy meeting, and you'll hear the same tired advice about high-usage customers. The conventional wisdom sounds logical on the surface:
"Reward your best customers with volume discounts." The thinking goes: these customers use your product the most, so they deserve the best pricing. Give them tiered discounts that scale with usage. Make them feel special with enterprise pricing.
"Volume pricing drives retention." Industry experts preach that discounts create stickiness. Lower per-unit costs mean customers are less likely to churn. It's basic customer loyalty 101, right?
"Match the competition's discount structures." Every pricing consultant will tell you to benchmark against competitors. If they offer 20% discounts at certain volume thresholds, you should too.
"Higher usage means lower margins are acceptable." The logic being that volume makes up for reduced profit per transaction. Scale economics will save you.
This approach exists because it feels fair and logical. It mimics traditional manufacturing where bulk purchasing actually reduces costs. Sales teams love it because they can "give" something to close deals. Customers expect it because it's what everyone else does.
But here's the problem: this conventional wisdom was built for physical products, not digital ones. When your marginal cost is nearly zero (like with SaaS) or when high-usage customers actually cost you more to serve (like with e-commerce), traditional volume economics don't apply.
The result? You're systematically undercharging the customers who get the most value from your product. You're creating a pricing structure that punishes success - both yours and theirs.
Consider me as your business complice.
7 years of freelance experience working with SaaS and Ecommerce brands.
The wake-up call came from an e-commerce client running a Shopify store with over 3,000 products. They had a sophisticated customer base - some buying single items occasionally, others placing massive monthly orders worth thousands.
Like most businesses, they'd implemented a classic tiered discount structure. Spend $500, get 5% off. Spend $1,000, get 10% off. Spend $2,500, get 15% off. It seemed logical - reward the big spenders, encourage larger orders, increase customer lifetime value.
The problem hit me when I was analyzing their conversion rate optimization data. I noticed something strange in their customer behavior patterns. The highest-value customers - those placing $2,000+ orders monthly - were actually the least price-sensitive group. They barely looked at pricing pages. They didn't shop around for deals. They just bought what they needed, when they needed it.
Meanwhile, we were giving these customers our biggest discounts automatically.
I dug deeper into the data and found something even more revealing. These high-volume customers had the highest support costs, required the most custom handling, and had complex shipping requirements that actually increased our operational expenses. We weren't just giving them discounts - we were giving discounts to our most expensive customers to serve.
The breaking point came when one of their biggest customers - someone who'd been getting 15% automatic discounts for two years - casually mentioned they'd been budgeting for full price all along. "The discount is nice," they said, "but honestly, we'd pay more if we had to. This product saves us so much time."
That's when it clicked. We were solving the wrong problem. Instead of asking "How can we reward high usage?" we should have been asking "How can we capture the value we're actually creating for these customers?"
Here's my playbook
What I ended up doing and the results.
After that revelation, I developed a completely different approach to high-usage customer pricing. Instead of automatic discounts, I implemented what I call "Value Capture Pricing" - a system that actually increases revenue from your best customers while improving their satisfaction.
Step 1: Identify True Value Creation
First, I stopped looking at usage as a reason to discount and started treating it as evidence of value creation. For the e-commerce client, high-volume customers weren't just buying more - they were saving massive amounts of time on procurement, reducing their vendor management overhead, and often buying exclusive or hard-to-find items.
I created a simple framework: if a customer's usage pattern indicates they're saving more money or time than they're paying you, there's room to capture more value, not give discounts.
Step 2: Replace Discounts with Value Adds
Instead of percentage discounts, I implemented value-based tiers that actually cost us very little but provided enormous customer value. For high-volume customers, this meant priority fulfillment, dedicated account management, and access to pre-release products.
The key insight: customers who use your product heavily don't want it to be cheaper - they want it to work better for them. They want reliability, priority, and customization, not discounts.
Step 3: Usage-Based Service Levels
Rather than giving discounts for high usage, I created service tiers that scaled with customer value. High-usage customers got white-glove treatment that actually justified higher pricing, not lower pricing.
For the Shopify store, this meant same-day shipping for orders over $1,000, dedicated customer service lines, and early access to new products. These "benefits" actually commanded premium pricing while delivering what high-usage customers really wanted.
Step 4: Transparent Value Communication
I completely restructured how we communicated pricing to high-usage prospects. Instead of leading with discounts, we led with value demonstration. "Here's what customers like you save by working with us" became more powerful than "Here's your volume discount."
The messaging shifted from "Buy more, pay less per unit" to "Use more, get more value." This reframing allowed us to maintain premium pricing while actually increasing customer satisfaction.
Step 5: Retention Through Improvement, Not Discounts
Finally, I focused retention efforts on making the product more valuable to heavy users, rather than making it cheaper. This meant better integrations, more customization options, and proactive account management - all things that justified higher prices while reducing churn.
Value Mapping
Track what customers save vs. what they pay to identify pricing opportunities
Tiered Benefits
Replace percentage discounts with service levels that cost little but provide high perceived value
Premium Positioning
Frame high usage as qualification for better service, not cheaper pricing
Retention Investment
Improve product value for power users instead of reducing their costs
The results from this approach were dramatic and immediate. Within six months of implementing value-based pricing for high-usage customers, the e-commerce client saw a 23% increase in average order value from their top customer segment.
More importantly, customer satisfaction actually increased. When we surveyed their biggest customers, the feedback was overwhelmingly positive. They appreciated the priority service, the dedicated support, and the feeling that they were valued customers rather than just high-volume buyers.
The retention numbers told the story even more clearly. Before the change, we had about 15% annual churn in the high-volume segment - customers would occasionally switch suppliers for better discounts. After implementing value-based tiers, churn in this segment dropped to less than 5%.
Perhaps most surprisingly, customer acquisition actually got easier. When prospects saw that high usage led to better service rather than just discounts, it changed the sales conversation entirely. We were no longer competing on price but on value delivery.
The financial impact was substantial. The client's profit margins on high-volume customers increased by 18% while their customer lifetime value grew by 31%. They were making more money from customers who were happier with the service.
What I've learned and the mistakes I've made.
Sharing so you don't make them.
This experience taught me several counterintuitive lessons about customer pricing psychology and business model optimization:
1. High-usage customers have the lowest price sensitivity - They're getting massive value and have high switching costs. Discounting to this segment is leaving money on the table.
2. Value perception beats cost reduction - Customers would rather get better service than cheaper prices, especially when the product is central to their operations.
3. Automatic discounts train bad behavior - When discounts are expected, they stop being special and start being entitlements. This destroys pricing power.
4. Service differentiation scales better than price competition - You can always improve service delivery, but you can only cut prices so far before destroying profitability.
5. Premium positioning attracts premium customers - When you charge more for high usage, you attract customers who value quality over cost savings.
6. Churn happens when value delivery stops, not when prices increase - Customers leave when products stop working for them, not because competitors are slightly cheaper.
7. The best retention strategy is becoming more valuable - Focus on making your product indispensable rather than making it cheap.
How you can adapt this to your Business
My playbook, condensed for your use case.
For your SaaS / Startup
For SaaS startups implementing this approach:
Replace usage-based discounts with feature unlocks and priority support
Position high usage as qualification for "enterprise" service levels
Focus on retention through product improvement, not price reduction
For your Ecommerce store
For e-commerce stores applying this strategy:
Offer faster shipping and dedicated support instead of percentage discounts
Create VIP tiers based on purchase history rather than order size discounts
Use early access and exclusive products as high-value, low-cost benefits