Comments on: Saas pricing debates

By: Pearl goes to V2.0, new pricing options, MYOB safe haven | AccMan

Pearl goes to V2.0, new pricing options, MYOB safe haven | AccMan — Mon, 27 Apr 2009 02:57:32 +0000

[...] As always, we’ll need to wait and see what happens because as I’ve said before, pricing is all over the map for on-demand [...]

By: Hayley

Hayley — Sun, 08 Mar 2009 10:18:28 +0000

I like the monthly SaaS pricing systems (and I’ve seen a lot of them having just put together a blog post on accounting and invoicing apps!), it makes things much more palatable for my cashflow system but I do find it confusing when there’s a lot of different options offered.

Companies like FreeAgent and Tactile CrM have got it right in my book, their prices are based on the type of company you operate rather than the number of invoices you send.

By: Chris Yeh

Chris Yeh — Wed, 18 Feb 2009 16:15:31 +0000

Will people never learn?

The temptation to carefully sculpt your pricing to optimize revenue always seems to afflict the inexperienced.

Pricing should be fair, simple, and understandable. Anything beyond that confuses the customer and negatively impacts revenues.

By: sig

sig — Wed, 18 Feb 2009 09:00:45 +0000

Dennis,

seems the SaaS crowd is trying the old trick that’s used by Telecoms, Insurance and others to retain customers: What Dilbert termed as “Confusopolies”, the natural next step after the outlawed “Monopolies” and “Oligopolies”

By: chris Jangelov

chris Jangelov — Wed, 18 Feb 2009 07:43:07 +0000

If this would be fair sharing the “right” price would be for a medium volume alternative. At high volumes profit would be higher, and the customers business hopingly thriving, but at low volumes you would get more functionality “than you pay for”.
I don’t think that will happen.
So most customers would pay more than they do today and that is a nice business model. For the industry.

By: David Turner

David Turner — Wed, 18 Feb 2009 07:07:42 +0000

Dennis, I agree that this model has much to commend it in principle, but my experience from years in the software industry is that customers will look at the model, but almost always end up opting for a predictible payment/month or year, instead.

As you say they are used to consumption based pricing in utilities, and even in areas like outsourced payroll (£x per member of staff) but I guess they are easier to predict. The challenge is that when you ask them how much they will use a system, by virtually any measure (time, transactions, value of transactions) they just find it very hard to estimate.

Even if they can, there is a suspicion that if they effectively pay a % of revenue / transaction value or similar, they will end up ‘over-paying’ if their business picks up. In other words, they want all the ‘upside’ if their business slows down, but not the other way round…

I’ve always thought this model would take off, but I’m not sure it