What are the cons of a pay-per-user SaaS pricing model?


This post is by Jason Lemkin from SaaStr


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The pros are that the revenue is highly predictable, and most SaaS applications are still priced this way. The cons are that it the one-size-fits-all approach to subscription pricing is a bit … dated … in SaaS. And does not always reflect the way customers use applications anymore. Why:
  • Can’t a customer pay in part based on usage, if they want to?
  • Does my price automatically go up, even if I just add 1 or 2 users to my account?
  • Does every type of user “cost money”?
  • Is it so hard to downgrade?
  • Do I have to manually downgrade if I use less?
  • Do I have to figure out now how many users I need for the best pricing, when I don’t really know?
  • Do you push me to pre-pay annually, if I also have to pay per user? Isn’t this sort of the worst of all worlds, if you about it? I lose all the flexibility in SaaS?
Start with a presumption of pay-per-user. But be more flexible in 2019/2020. Let customers buy more the way they want to buy. Do this right, you will close faster, and in the end, close more. View original question on quora The post What are the cons of a pay-per-user SaaS pricing model? appeared first on SaaStr.

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