Software-as-a-Service (SaaS) is an amazing way to deliver a product for many reasons, one of which is that there’s almost no marginal cost save for hosting bills and customer service. With high gross margins generally, there’s a fair amount of flexibility in how the service is priced.
Here are some of the more common pricing options for SaaS products:
- Per user that uses the system with pricing differentiation based on type of user (e.g. an administrator user would be more expensive than a report viewer user)
- Per module used (e.g. based on functionality)
- Per instance of a type of object used (e.g. based on how many of X are used, like projects managed or emails sent)
- Per transaction (e.g. a percentage of a deal, like how eBay does)
There’s no right or wrong answer, but in general, pricing should be kept as simple as possible while also representing the value delivered to the customer.
What else? What are some other pricing options for SaaS products?