Let’s get started: here are the top 7 SaaS Pricing models
Please-Commit Pricing 🙏
Per-Your Client Pricing
Basic is always free
The Pros and Cons of each model are below + examples from the best SaaS companies in the world.
SaaS Pricing Model 1: Please-Commit Pricing
Please-Commit Pricing is all about saving money. if you commit of course. Amazon’s Prime Service presents two prices to a regular customer. Price per month and Price per year (almost 25% off)
Pros Please-Commit Pricing
Easy to implement. The discount is given when committing to a year or more.
A commitment of a one-year or more can assist in estimating the company’s future profits and thus enables proper budget planning.
Clients who commit for a one-year or more are loyal customers. Therefore it is possible to offer them additional products, services, or features for an extra charge.
Potential Clients can easily understand the difference in price between the two options, so it is easy for them to decide on a one-year commitment.
Little surprises. When Clients commit to a one-year, you can surprise them during the year with updates and improvements to the product/service (such activities increase customer loyalty)
Cons Please-Commit Pricing
The commitment goes both ways. The company also promises to provide an excellent product/service throughout the year.
A one-year or longer commitment focuses less on the value of the product/service for the customer and more on the price. Thus it is difficult to get the customer to spend more money on extras, like new features or various benefits.
SaaS Pricing Model 2: Feature-Based Pricing
Slack (a chat system for organizations and companies) offers a price for a basic package that contains a limited number of features. As more features are added, then the package price increases accordingly.
Pros Feature-Based Pricing
No surprises. Clients know exactly what they are paying for.
Encourage clients to upgrade. Clients can easily compare the packages offered, and if the additional features are relevant to them, they will upgrade.
Feature-Based Pricing is one of the models based on a value-based pricing strategy. Clients can appreciate how much each feature is necessary for their business or not.
Cons Feature-Based Pricing
Some SaaS companies (for example, Data Storage companies) offer packages with a long and cumbersome list of features. If comparing prices between packages is tedious and incomprehensible, clients can look for less detailed and easier-to-understand alternatives.
Pricing is unclear to Clients . Why a, b, c cost more than d, e. When there is over-detailing, customers do not always understand the pricing, and this can hurt credibility.
SaaS Pricing Model 3: Per-User Pricing
The Per-User Pricing model is one of the most popular SaaS pricing models where the main clients are business clients and not private. Monday offers a project management SaaS product. At the pricing page entrance, customers are asked to indicate the size of their team. Pricing changes according to the amount of “seats” you choose. The number of users determines the cost.