Profitroom is a booking engine platform that employs 300 people and serves over 3,000 hotels in 50 countries. At the time of our project, they were going for more than $15M in annual recurring revenue. The company was recently acquired by MCI Capital, one of the region's biggest software investors. It's one of the fastest-growing SaaS products in the travel and hospitality industry.
The main value proposition is an engine that allows hotels to increase direct bookings on their websites, therefore hedging them against fees of online travel agencies (OTAs) such as Booking.com or Expedia. On top of that, Profitroom has a set of sub-products such as a channel manager, marketing automation, payments, and a few others. These differentiating products were one of the primary reasons for their success - and, as we'd discover, one of the primary reasons the pricing strategy needed to evolve.
It was one of the first times we have worked with external consultants. The Valueships team did an excellent job carving out an entire pricing strategy, shifting our business model into new territories. Interestingly enough, we have felt or discussed some of these things internally, but they facilitated the discussion and pushed us in the right direction. They also supported the reasoning with fact-based analyses and data-driven arguments, which were required then. On top of that, we brought them to our annual all-employees meeting to deliver the workshop for the whole company, and they did really well.
We were approached by Anna Harris, who leads GTM and International Expansion at Profitroom, to ask if we could help create a new pricing policy for their business. While Profitroom grew substantially over the years, the company had accumulated a lot of discrepancies in its pricing policy - various discounts, numerous pricing models, caveats, and edge cases. The lack of a unified pricing model made it difficult to scale and optimize pricing effectively.
This is completely typical when a company grows at 50% CAGR, as Profitroom did. Fast growth creates pricing debt. Deals get closed with custom terms, discounts pile up, and before you know it, you have dozens of pricing variations across geographies and customer segments with no coherent structure behind them. Selecting the right pricing model was a key challenge due to the diversity of customer needs and market segments. The company experimented with different pricing models, such as flat rate, usage-based, and per user pricing, which contributed to the overall complexity. It’s something Valueships experts as a SaaS pricing consultant had deep experience in.
Analytically speaking, it was one of the hardest projects we had to do. Profitroom’s business model operated on multiple revenue streams: commission revenue from direct bookings, flat subscription fees, transactional consulting revenue, additional charges from add-ons, and user-based fees. This complexity is what makes hospitality SaaS pricing particularly challenging - and particularly rewarding to get right. A comprehensive competitive analysis was needed to understand how Profitroom's pricing compared to the broader market.
The goals ahead of us were clear but ambitious:
In essence, this was a full-scale B2B SaaS pricing transformation. Not just a price increase - a fundamental rethinking of how Profitroom monetizes value across multiple products, revenue streams, and 50 countries. The question wasn’t simply how to increase SaaS revenue, but how to build a pricing architecture that scales with the business.
Our project consisted of three main stages, each building on the previous one. The project was grounded in a value based pricing approach to ensure that prices accurately reflected customer-perceived value.
Our usual go-to approach had to be customized to the utmost extent for this engagement. The multi-stream revenue model meant we couldn’t just look at MRR in isolation - we needed to understand the full picture.
We compared commission and subscription revenue streams to the revenue flows created by the hotels. Usage based pricing was also one of the models contributing to the complexity of the revenue structure, as it charges customers according to their actual usage and can align costs with value. This led us to identify real impact in areas such as discounting and geolocalization differences, and to the main hypothesis that a commission-led model should be the primary source of revenue creation.
The key output was establishing an effective take rate baseline. Take rates are critical for the travel and hospitality industry because they’re the foundation for capturing customer value. What is your part in the entire value creation chain? Answering that question gave us the starting point for everything that followed.
We went the extra mile to analyze competitors’ business models, prices, and effective take rates, with a primary focus on direct competitors. This competitive pricing analysis included something we don’t always get to do - we received quotes via mystery shopper exercises and gathered insights from industry experts. Extensive market research, including customer surveys and competitor analysis, was conducted to gather data for the benchmarking process.
Triangulating multiple data points led us to conclude which areas Profitroom was more expensive in and where it was cheaper than leading competitors. This kind of pricing strategy for marketplace platforms requires understanding not just your own pricing, but the entire ecosystem of how value flows between the platform, the hotels, and the end guests. Understanding the competitive landscape is crucial to inform pricing decisions and optimize value.
We also ran scenario modeling exercises based on various use cases to identify which business model is most effective in terms of generated lifetime value. During workshops with the whole Profitroom team, we compared multiple options - full commission-based, hybrid, user-based, tiered pricing model, flat rates - weighing the pros and cons of each. This analysis was fundamental for the next step: a full understanding of the value creation process.
This was the moment where both Profitroom and Valueships could shine. The client’s products were outstanding and differentiable on the market. And we at Valueships love identifying sources of value creation.
During live workshops with approximately 50 employees, we identified key value drivers for each product and built successful value equations. As part of this process, we explored how customers assign value to different product features and outcomes, ensuring our analysis reflected real customer perceptions. This economic value analysis exercise was the foundation for the entire value-based pricing strategy. We calculated the size of potential revenue or cost savings for each of Profitroom’s products - in other words, we dollarized the value.
Based on that, we built calculators and passed them to the sales team so they could create compelling ROI calculations for their customers and win more deals at higher prices. This is where SaaS pricing optimization becomes tangible for the whole organization - when every salesperson can demonstrate, with real numbers, why the pricing is justified.
Dynamic pricing has become a cornerstone strategy for SaaS companies looking to accelerate market growth and maintain a competitive edge. By leveraging customer data and advanced analytics, businesses can adjust their pricing in real time to reflect shifts in market demand, customer behavior, and other critical market factors. This approach allows SaaS companies to optimize pricing for maximum revenue, whether that means offering discounts during periods of low demand or capitalizing on peak times with premium price points.
The power of dynamic pricing lies in its ability to respond instantly to changing market dynamics. With the help of machine learning algorithms, SaaS businesses can identify emerging trends and patterns in customer purchasing behavior, enabling them to set prices that align with both customer expectations and business objectives. This not only helps to maximize profit margins but also ensures that pricing remains competitive in a rapidly evolving landscape.
Moreover, dynamic pricing provides valuable insights into customer needs and preferences, which can inform more effective marketing strategies. By analyzing customer data, SaaS companies can uncover opportunities for upselling, cross-selling, and targeted promotions that resonate with specific customer segments. Ultimately, dynamic pricing is more than just a revenue optimization tool—it’s a strategic lever for driving market growth, enhancing customer value, and staying ahead in the competitive SaaS marketplace.
Customer segmentation is a vital practice for SaaS companies aiming to refine their marketing strategies and deliver greater value to their customer base. By dividing customers into distinct segments based on factors such as company size, industry, usage patterns, or job function, businesses can develop highly targeted marketing campaigns that address the unique needs and pain points of each group.
Effective customer segmentation enables SaaS companies to tailor their messaging, product offerings, and pricing models to different customer segments, ensuring that each group receives solutions that are relevant and compelling. For example, a SaaS provider might create specialized marketing strategies for small businesses versus large enterprises, or for different industries within the hospitality sector. This targeted approach not only increases engagement and conversion rates but also strengthens customer loyalty by demonstrating a deep understanding of customer needs.
Leveraging data analytics and machine learning, SaaS companies can continuously analyze customer behavior and preferences, allowing for ongoing refinement of segmentation and marketing strategies. This data-driven approach helps identify new opportunities for upselling, cross-selling, and customer retention, ultimately driving business growth and expanding the customer base. In today’s competitive environment, customer segmentation is essential for SaaS companies seeking to optimize their marketing strategies and achieve sustainable success.
For SaaS businesses, customer acquisition and retention are the twin engines of sustainable growth. A successful pricing strategy starts with value-based pricing, which focuses on setting prices according to the perceived value delivered to the customer. This approach not only attracts high-quality, paying customers who recognize the product’s worth but also helps maximize customer lifetime value by aligning pricing with customer expectations and outcomes.
Tiered pricing models further enhance customer acquisition by offering a range of pricing plans tailored to different customer segments and budgets. Whether targeting startups with entry-level features or large enterprises with advanced functionality, tiered pricing ensures that potential customers can find a plan that fits their needs—making it easier to convert leads into loyal, long-term users.
Retention strategies are equally critical. By actively seeking and acting on customer feedback, SaaS companies can continuously improve their offerings, address customer dissatisfaction, and introduce new features that increase perceived value. This ongoing dialogue not only boosts customer loyalty but also extends customer lifetime, driving recurring revenue and strengthening the overall customer base.
Incorporating value-based and tiered pricing, along with a strong focus on customer feedback, enables SaaS companies to optimize both acquisition and retention. The result is a robust, loyal customer base, higher customer lifetime value, and a market position that supports long-term growth and profitability.
The results are outstanding, mostly because of great execution skills on the Profitroom side. It’s been over 6 months since the initial pricing implementation, and we see the highest impact on international expansion:
Additionally, the new pricing structure helped maintain and even improve profit margin, ensuring profitability while expanding internationally.
On top of the financial results, Profitroom now has:
The sales team has a much better understanding of how to show the client the value of the products. They can provide compelling ROI equations to justify the purchasing process - which is exactly what a value-based pricing strategy should deliver. It’s not just about charging more. It’s about proving why the price is fair.
And it’s not over yet - there are things left on the implementation side, so we’re expecting the overall impact to be even more substantial. As ongoing pricing changes are implemented, it is crucial to manage them transparently to maintain customer trust and alignment across teams.
Increased commission take rates by 30%
The value of new deals increased by 5-15%
The conversion managed to stay at the same level
Expert in B2B pricing, monetization and value-based selling strategies. Over the past year, he has completed over 40 consulting projects in Europe. Prior to founding Valueships, he worked at McKinsey & Company, mainly in the TelCo, software, and banking industries. He completed his doctorate in pricing in SaaS start-ups at the University of Economics in Wrocław, where he also lectures.
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Expert in B2B pricing, monetization and value-based selling strategies. Over the past year, he has completed over 40 consulting projects in Europe. Prior to founding Valueships, he worked at McKinsey & Company, mainly in the TelCo, software, and banking industries. He completed his doctorate in pricing in SaaS start-ups at the University of Economics in Wrocław, where he also lectures.
