I was recently asked the question, “what is the best pricing model for a SaaS provider?”. As the co-founder of an 15 year old SaaS project management software company I felt I had some insight. First of all let me say this. This question has 2 very different answers when you consider:
1) “what’s best for the customer?” or
2) “what’s best for the vendor company?”
At WorkOtter we decided early on to brainstorm all of the barriers to a customer getting started with our software including:
SaaS environment with data outside their datacenter Cost per month Commitment and Risk of getting stuck with the wrong package We then set out to alleviate those risks and I can tell you – to a customer – they love our billing approach and see it as a major differentiation vs. how @Task, Daptiv, Innotas, Microsoft EPM (EPMLive), and other SaaS resource management software, portfolio management software, and project management software providers operate.
Basically we have 4 account types.
SaaS Pricing Per User Type Per Month (USD)
You can start with (or drop down to) a single administrator at anytime and only pay $35/Month. You only pay for users that were active during the month.
|Account Types||User Types||Functionality Available||Per User|
•Projects (Including MS Project integration),
•Report and Dashboards (read and write)
|$35 / month|
•Contractors & Consultants,
•My Home Support Logs,
•Timesheets & Expenses,
|$15 / month|
•Update hours remaining,
•Update delivery dates,
•Update notes on work,
•Status updates to project manager
|$5 / month|
•Track and forecast against work
|$1 / month|
Here is were the really good part comes in.
All customers are month to month with NO commitments for the future. Cancel at any time no questions asked.
Our competitors think we are crazy (I know I have been interviewing many that are getting laid off).
The bottom line is – our customers don’t want to quit every month. This keeps the pressure on us to deliver value, security, and performance every month or we can get fired. In the end it builds a more loyal and trusting customer base.
It takes a long time to realize how valuable your products/services are and that your customers won’t fire you when you every single month. Gaining the confidence in yourself and your business to trust a pricing model that is unorthodox is one of the hardest things.