The Nisos Guide to Value-Based Pricing: Converting Professional Services into Enterprise SaaS

The Nisos Guide to Value-Based Pricing: Converting Professional Services into Enterprise SaaS

Most discussions about converting services to SaaS focus on technology. But in a recent Category Visionaries episode, Nisos CEO David Etue revealed that pricing transformation was actually the key to their successful transition.

The Problem with Hourly Pricing

When David joined Nisos in 2020, he encountered a common services pricing model. “Having come from a consulting company background, were still doing a lot of things that were time, materials, hourly rate type work,” he explains. The fundamental problem? “That work, from my perspective, isn’t good for anyone because the company wants to maximize the hourly rate, the consumer wants to minimize it. But it doesn’t really drive any goals of efficiency.”

This misalignment created friction beyond just pricing. When prospects asked about solutions, the response was always conditional: “If someone calls you and said, ‘hey, can you solve this problem?’ And you’re like, ‘yes, maybe, let me go figure out how much that costs, let me ask you ten more questions.'”

Rethinking Value Delivery

The transformation began with a fundamental insight about value creation in the intelligence market. David notes, “What’s fascinating about this $6 billion cyber threat intelligence market is that it actually doesn’t sell intelligence. It sells data or information.”

Rather than competing on hourly rates, Nisos could package their expertise differently. As David explains, “Intelligence is information that’s curated to enable a timely, actionable and relevant decision.” This became the foundation for their value-based pricing model.

The Transition Metrics

The shift to subscription pricing was dramatic. The company took their subscription revenue “from nearly zero to 20% subscription revenue business to north of 90%.” More importantly, they achieved over 108% net dollar retention, proving that customers saw sustained value in the new model.

But the transformation wasn’t just about recurring revenue. It changed how they engaged with prospects: “Yes, we can solve that problem. Here’s our offering and here’s what it cost.” Clear packaging and pricing accelerated sales cycles by eliminating the back-and-forth of traditional consulting scoping.

Balancing Standardization with Value

A key challenge was maintaining service quality while standardizing offerings. “Our products are combinations of people, process and technology,” David explains. “But in our case, it’s our people who are a superpower and it’s our people who enable our clients to be heroes.”

The solution? Rather than trying to automate everything, they focused on making their analysts more scalable through technology enablement. This allowed them to deliver consistent value while maintaining the human expertise their clients needed.

The Impact on Retention

The subscription model proved particularly powerful in the threat intelligence space, where traditional vendors struggled with churn. As David notes, “Even if you’ve built the best data feed for something, if your customer can’t bring it to life, that creates a value challenge and a renewable challenge for you.”

By packaging their offering as managed intelligence rather than just data or consulting hours, Nisos created stronger alignment with customer success. This helped drive their impressive net dollar retention numbers.

Key Lessons for Founders

The Nisos story offers several crucial insights for founders considering similar transitions:

1. Start with value alignment: Understand how customers measure success and align your pricing model accordingly
2. Package for clarity: Make it easy for prospects to understand what they’re buying without lengthy scoping discussions
3. Focus on enablement: Use technology to make expertise more scalable rather than trying to eliminate it
4. Measure the right metrics: Track not just subscription revenue, but also retention and expansion as indicators of value delivery
5. Be willing to say no: Some customers will want to continue with the old model – be prepared to turn them away

The key insight? Successfully transitioning from services to SaaS isn’t just about building technology – it’s about fundamentally rethinking how you package and deliver value to customers. As Nisos demonstrated, getting the pricing model right can transform not just your revenue, but your entire go-to-market motion.