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.
- 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 think 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.
Featured image from here