In this article, we're going to talk in detail about the different types of SaaS pricing models, SaaS pricing strategies, SaaS Psychological Pricing etc. With the end of this guide, you will get more clarity about which pricing model is good for your SaaS product!
Why selecting the correct SaaS pricing model is Important?
Setting prices for your products can be tricky. Set prices too high, and you miss out on sales. Set them too low, and you miss out on profit. Some of the Important questions you need to ask while choosing the correct pricing models are.
- Who is your ideal customer?
- How much value does your product offer?
- Competition Pricing Range and Pricing model
Companies used to forget about these important questions and purely focus for that eureka moment of creating the best app they can produce.
I personally know a guy who took 4 years to polish an application with only three client and made sure its the right app in all way before start the marketing, but he got confused at the pricing,
He didn't know which pricing model was good for his app, he first tried one time price with an AMC (annual maintenance charge) model. which was a disaster and his app came in face with extinction. Later he changed to a Per user based pricing model and then his app survived.
The right pricing model for your SaaS you choose will determine the survival or extinction of your app or business.
We’ll discuss about choosing the right pricing model later in the guide.
Now, let’s start with the pricing models,
Types of Pricing Models
1. Flat rate SaaS Pricing Model
Flat rate SaaS Pricing Model is one of the simplest pricing model , as the name denotes, it simply means, you give a flat price for monthly or annually irrespective of no of users of other feature. you provide an all inclusive package with monthly or annual charges
Example of a flat rate pricing
Headlime : Headlime is a headline generation tool created by Danny Postma , In headlime pricing section, Danny only have two packages one is quarterly another is annually, which is easier to the customers to chose with no confusion.
Advantage of a flat rate pricing
- Easier to Understand and Sell - Offering a one price and package is easier to understand by the users which may lead to sell the product easily