SaaS Pricing Calculator
Work out the monthly price you’d need to charge to hit a target MRR, and see how churn shapes your customer lifetime value.
How we estimate this
## Working back from an MRR target
Pricing reviewed: June 2026.
Pricing reviewed June 2026. Indicative Australian costs, not a quote.
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Understanding saas pricings in Australia
Working back from an MRR target
The starting price is the easy part. Divide your target monthly recurring revenue (MRR) by the number of paying customers you realistically expect, and you have the average price each one must pay. Chasing $20,000 MRR from 200 customers means an average of $100 a month. But average is the operative word, and almost no successful SaaS business charges everyone the same. Most reach that figure with tiers: a cheap entry plan that lowers the barrier to trying the product, a mid plan where most customers land, and a pricier pro or enterprise plan that a minority choose and that pulls the average up. The art is designing tiers so the blended price hits your target while each tier feels fairly matched to the value its users get.
Churn is the number that decides everything
The metric that quietly determines whether the whole model works is churn, the rate at which customers cancel each month. Average customer lifetime is roughly one divided by your monthly churn rate, so 3 per cent churn means a customer sticks around about 33 months, while 7 per cent cuts that to around 14. Multiply that lifetime by the monthly price and you get lifetime value (LTV), the total a customer is worth before they leave. Two companies charging the identical $100 a month but running 3 versus 7 per cent churn have completely different businesses: one customer is worth roughly $3,300, the other barely $1,400. This is why investors and operators obsess over retention long before they worry about price.
LTV only matters next to acquisition cost
Lifetime value means nothing in isolation, it only matters against what it costs to win a customer. The widely used yardsticks are an LTV-to-CAC ratio of about 3 to 1 or better, and a CAC payback period under roughly 12 months so you are not waiting years to recover marketing and sales spend. If a $100-a-month plan costs $1,500 to sell and the customer stays only 14 months ($1,400 of revenue), you are underwater on every acquisition and growth makes the hole bigger, not smaller. The same $100 price suddenly works the moment you either lift retention so the customer stays longer, or cut acquisition cost so each one is cheaper to win. Price, churn and CAC are three dials on the same machine.
Retention usually beats a price rise
When you want to grow the business, improving retention is often more powerful, and less risky, than raising price. Shaving churn from 5 to 3 per cent stretches average lifetime by roughly half and lifts LTV across your entire customer base at once, without the cancellations and goodwill cost a price increase can trigger. A price rise lifts revenue on customers who stay but can push marginal customers out the door; a retention improvement compounds quietly on everyone. That said, many SaaS businesses are simply underpriced and leave money on the table for years, so the two are not mutually exclusive, test small price increases on new signups while you work the churn problem on the existing base.
Annual plans, expansion and the levers that compound
Two structural moves strengthen the whole model. Annual billing removes eleven monthly opportunities to cancel and pulls a year of cash forward, which improves both retention and the cash you have to fund growth, this is why so many pricing pages discount the annual tier hard. The second is expansion revenue: usage-based add-ons, seat growth and upsells that lift what existing customers pay over time. Strong expansion can produce net negative churn, where revenue from your existing base grows even as some customers leave, the holy grail of SaaS economics. A useful way to see this is the difference between gross churn (the revenue you lose from cancellations and downgrades) and net churn (that loss offset by upgrades and expansion); a business with 6 per cent gross churn but 8 per cent expansion is actually growing its existing base, which transforms the economics even before a single new customer signs up. Treat the price this calculator returns as a starting hypothesis, then watch churn, CAC payback and expansion in your real data and adjust, and confirm any major pricing change with your accountant or adviser before rolling it out.
A worked example of the same MRR target, two different businesses
Two founders both target $20,000 MRR and both land on a $100 average price, and their businesses are not remotely comparable. Founder A runs 3 per cent monthly churn, so average lifetime is about 33 months and LTV is roughly $3,300. At a $900 acquisition cost the LTV-to-CAC ratio is about 3.7 to 1 and payback lands in nine months, comfortably inside the usual yardsticks, so every dollar into marketing is worth spending. Founder B runs 7 per cent churn, giving a 14-month lifetime and roughly $1,400 of LTV. At the same $900 CAC the ratio is 1.6 to 1 and payback takes nine months out of a 14-month life, leaving almost nothing. Founder B also has to replace 7 per cent of the base every month just to stand still, which at 200 customers means winning 14 new ones monthly before any growth at all. Same price, same target, entirely different economics.
Frequently asked questions
How do I price my SaaS to hit an MRR target?
Divide your target monthly recurring revenue by the number of paying customers you expect to get the average price each must pay, so $20,000 MRR from 200 customers is $100 each. In practice you reach that average through tiers, an entry plan and a pricier plan blending to the figure, rather than charging everyone one flat price.
How does churn affect lifetime value?
Customer lifetime is roughly one divided by your monthly churn rate, so 3% churn means about 33 months and 7% about 14. Multiply lifetime by price for lifetime value (LTV). At $100 a month that is the difference between a customer worth $3,300 and one worth $1,400, so lower churn lifts LTV across your whole base, often more powerfully than raising price.
What LTV to CAC ratio should I aim for?
A common target is LTV at least three times your customer acquisition cost (CAC), with payback under about 12 months. If it takes longer than a customer's lifetime to recover what you spent winning them, you are underwater, and scaling spend deepens the loss. Improve retention or cut acquisition cost before pouring more into growth.
Why do SaaS companies push annual plans?
Because annual billing removes eleven monthly chances to cancel, which improves retention, and it pulls a full year of cash forward to fund growth. That is why pricing pages so often discount the annual tier, the lower retention risk and earlier cash usually outweigh the discount given up.
Should I raise prices or reduce churn to grow?
Reducing churn is usually the safer lever because it compounds across your entire base without triggering cancellations, cutting churn from 5% to 3% lifts every customer's lifetime value at once. But many SaaS products are underpriced, so the strongest play is often both: test small increases on new signups while working the churn problem on existing customers.
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