Saas license pricing

Plus, once customers become used to using your software for free, they may become annoyed if you begin to charge for certain features or upgrades. Example: Many drag-and-drop web builders, like Weebly, allow customers to build and launch basic websites for free.

Increasingly, SaaS companies are deploying hybrid pricing models that combine multiple tactics. One of the most powerful combinations is a flat-rate plus usage-based pricing model that gives users both pricing and feature flexibility.

Pros: This pricing model provides SaaS businesses with countless opportunities to upsell customers in addition to recurring cash flows. Cons: Hybrid pricing can get very complicated, very quickly.

SaaS businesses must have a powerful billing solution to efficiently manage these pricing tactics at scale. Example: Zoom uses hybrid pricing to give customers options around how they use and pay for platform access. The company offers four different pricing tiers, each with its own set of add-ons and usage rates.

To optimize your revenue potential, you need a sophisticated, cloud-based billing solution that gives your pricing team the functionality they need to differentiate your offerings through flat-rate, consumption-based or a hybrid approach.

With BillingPlatform, not only can you support those models, but with our innovative pricing strategies, you can go a step further.

For example, using workflow automation and mediation , you can create hybrid models with consumption-based pricing elements. Alternatively, you can fluctuate price based on demand , such as when the price for an airline seat goes up when availability decreases. Contact our team today to learn more about how BillingPlatform can help accelerate your business growth! Industry-specific billing methods, products, and services supported by billing systems designed for a specific purpose and The new momentum around cloud computing is a natural counterpart to the historic, global, technological progression Flat-rate Subscription SaaS Pricing Frequently used in the early days of cloud computing, this pricing model enables SaaS businesses to charge customers fixed, recurring fees for access to products and services.

Usage-Based SaaS Pricing SaaS businesses that need more advanced billing capabilities are gravitating towards usage-based pay-as-you-go pricing that scales with utilization. Tiered SaaS Pricing A popular and flexible pricing model, SaaS companies are able to offer multiple packages at different price points. Freemium SaaS Pricing To attract customers to an unfamiliar brand, some SaaS companies offer free access to a limited set of features. Deploy Any Combination of SaaS Pricing Models With BillingPlatform To optimize your revenue potential, you need a sophisticated, cloud-based billing solution that gives your pricing team the functionality they need to differentiate your offerings through flat-rate, consumption-based or a hybrid approach.

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Manage consent. Close Privacy Overview This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website.

These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience. Necessary Necessary. Necessary cookies are absolutely essential for the website to function properly. With SaaS budgets and the cost-per-employee quickly rising, organizations need to implement an effective License Management strategy.

There may be some cases, for example, where longer-term contracts can save the organization money over more flexible licensing options, if teams are going to use a guaranteed number of licenses. Tracking SaaS renewals can get tricky, especially since they happen at different points throughout the year. While some vendors are great about reminding you about subscription renewals, others just come and go with little fanfare.

A Collaborative IT approach can help teams keep renewals in check. Consider following this checklist for SaaS vendor renewals :. Without the proper protections in place from both a user and vendor security perspective, sensitive data could be at risk. Often, organizations track SaaS licenses in a very ad-hoc or disorganized way. Some individual teams may keep their own spreadsheets, which can be difficult to maintain or gain a collective view across the entire organization.

Still others may have no system in place at all. Even if your organization does use spreadsheets, it can still be impossible to get data on the number of licenses available, usage of key subscriptions, and other important information that could determine the course of your budgeting strategy.

Luckily, there are solutions available to serve as a single pane of glass for visibility purposes, and help teams effectively collaborate across all key SaaS stakeholders. Having the right systems and automation in place will help make some of these SaaS License Management challenges much easier. Instead of depending on ad-hoc processes, automating many rote tasks—such as checking renewals, configuring accounts, or tracking team changes—can save a lot of time and allow the IT team to focus on more strategic tasks.

Solutions like Blissfully provide IT, HR, finance, and team leaders with a single pane of glass to gain visibility across all of your SaaS vendors.

Blissfully can help manage key License Management workflows including employee on- and off-boarding, team changes, vendor approvals, renewals, app usage, and more.

My advice? To put it bluntly, value-based pricing is the only pricing strategy you should choose for your SaaS company. Instead of looking inwardly at your own company or laterally towards your competitors, with value-based pricing, you look outward. You look for pricing information from the people who are going to make a decision depending on your price: your customers.

Value-based pricing truly gives customers what they need in order to trust your product and brand:. You can offer packages and price points that precisely meet their needs because you understand what your customers truly want. You can start at a higher price point than your competitors—if you find that customers are willing to pay that price—which leads to higher revenue from the start. You can also re-evaluate prices as you add value to your product and find out more about your customers and their needs.

All this research takes time. You have to be dedicated to finding out about your customers and your product to perform value-based pricing effectively. Instead, it spits out a range of prices that still forces you to make a decision on the exact price and how you package those prices for customers, leading perfectly into our next section: how should you package your SaaS pricing?

Just like skinning a cat, there are dozens of ways to price your SaaS product, but most companies tend to follow a handful of popular pricing models.

Like cell phone data, prices increase along with usage—the more you use, the more you pay. Pricing based on usage also makes predicting costs and revenue more difficult since usage can often change dramatically from month to month.

The de facto pricing model for many SaaS companies, per-user pricing is just as it sounds. Per-user pricing kills your growth and sets you up for long-term failure—it should never be the be-all and end-all of your pricing strategy. Tiered pricing tends to be the best pricing model for most SaaS companies, and the one we most often recommend.

It's the same strategy used by companies like HubSpot and Slack—we'll dig into their pricing in more detail below. Tiered pricing lets SaaS companies offer two or more packages, or fixed sets of features, for a specific price.

Each tier can be tailored to meet the specific needs of a particular buyer persona—for example, beginner users versus enterprise—with tier prices increasing as you provide more value. Why is tiered pricing so effective? Upselling customers also becomes easy, assuming your tiers are structured right—customers can simply step up to the next tier when they outgrow their current package. Be careful not to offer too many tiers, however— overcomplicating your pricing tiers can confuse customers and reduce conversions.

Flat-rate pricing is the most basic pricing model for SaaS companies. One price, one product, one set of features—every customer is on the exact same plan. Even though flat-rate pricing is easy to communicate and easy to sell, it isn't used by many SaaS companies today, since tiered plans that cater to the needs of different users are far more profitable. Charging one rate for unlimited access blocks off any possibility of aligning your pricing with your value metric—you don't make more money for providing more value.

Per-feature pricing is somewhat similar to tiered pricing, but instead of charging by users, customers pay for different features within each tier—as tier prices increase, so does the functionality you provide with your product. The pros? Now, Slack combines two different pricing models, charging per seat but also giving customers multiple tiers to choose from. New buyers have a choice of three tiers, and each tier unlocks additional functionality:.

Once customers join the Free plan, adding team members and making Slack an essential part of their communication, the ability to go back and search past messages becomes invaluable, giving a clear path to upgrade to the Standard plan.

Likewise, Slack also knows that for larger teams—say, 50 to people—enterprise features like single sign-on and compliance reports become essential, which Slack provides through their Plus tier.