Software as a Service (SaaS) is a significantly popular service model for several business applications. It is a way of offering Software solutions to the end-user through the web. SaaS can provide excellent opportunities for most businesses and most startups, generally in pricing and versatility.
In contrast to regular Software, clients using your SaaS products pay for it regularly i.e. recurring payment. One of the essential benefits of Software as a Service (SaaS) is that you have the option to think in a different way about the product’s pricing model.
In this article, we are going to show you how to choose a pricing model for your SaaS business.
Flat fee pricing is a SaaS pricing model where a business charges a fixed or decided rate for a product rather than charging by the hrs or use of a product or service. Providing a single product at a single price makes it easier to concentrate on product sales and marketing upon selling a unique, evidently-described offer.
A tiered pricing model in SaaS is a pricing model where a business sells its products or services in an individual selling price range. With Tiered pricing, the first ten units would cost, say, $5 each. The next 21-30 units would cost $4 each, and the following 31-40 units would cost $3 each. This is also a popular pricing strategy used by many SaaS providers because it offers several pricing options for a product.
As the name suggests, Feature-Based Pricing Model in SaaS refers to users paying for features, the more you spend, the more features you’ll get. This model is also one of the most popular pricing models among many SaaS providers because it is easy for vendors to create a feature-based pricing model, and consumers also know it.
In SaaS, per-user pricing is a pricing model where a user is charged differently for every product it uses. It is one of the most controversial pricing models in SaaS, and it is said that the per-user pricing model kills your monthly active users metric and sets you up for a long term failure.
Other SaaS Pricing Models Include: –
- Storage Pricing: Web Hosting, RDP’s, and Cloud storage companies use this pricing model. The pricing depends on the amount of storage you are going to consume.
- Active User Pricing: In this model, only pay for the users who use the Software; it doesn’t matter how many users you pay for.
- Pay as you go: You are charged based on the usage of a particular service. AWS uses this pricing model.
- Freemium: A freemium pricing model in Saas refers to Software, service, or product which is free to use but is limited, and to get more features; you need to pay for additional packages. Slack and Evernote are some of the examples.
Pricing is one of the significant issues among the SaaS business model. If you are a SaaS owner and want to improve your pricing, revenue, and profit, then you can check out Payvoice – The Best Subscription Management and Recurring Billing Software.Payvoice makes it easy to create beautiful subscription portals from Stripe products and plans. Payvoice syncs with your Stripe products and plans and allows you to create beautiful subscription portals from any number of those plans. It will also enable your sales team to manage Stripe’s subscription billing from outside Stripe.