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We are providing a SaaS Service (currently in open beta) and thinking about our pricing tiers. We want to offer plans that grow at the same pace that our customers businesses grow.

We are thus thinking about using "user limitations". The simple idea behind this thoughts is "The more users they have, the more money they make, the more resources they use and the more we have to charge".

Based on our statistics and surveys, the pricing tiers will suit most of our future customers. We have however a few customers that will not fit.

These customers have thousands of end-users that are using our services but they do not make any income or far less than our services would cost them.

I'm looking for ideas on howto handle these customers. They like our services but will no longer be able to use them because they will reach the user limitations and cannot afford to switch to a bigger paid plan.

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1 Answer

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First off as I am sure you know you should base your pricing on the value that a customer will gain. You often can't do that directly so you have to choose a proxy. # Users is a good one for a lot of circumstances but not all - so is there a better way of segmenting your market?

Your q. indicates there is not ("suit most of our customers") so

  • Is there an easy way to identify and segment these customers e.g. special non-profit pricing perhaps with a few restricted features?
  • Is there an easy way to self-identify and segment - e.g. free if you provide a "Powerd By" backlink to your site (so you're getting something from it)
  • You can always do it the simple way of giving discounts to those who ask.

Finally - do you even want to do this? You can't please all the people all the time and its a mistake to try, so why not focus on delighting that subset of all potential customers whom have the most to gain and the highest profit potential for you?

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+1 - Great point on thinking about focusing the market. Customers may outgrow your app. Give yourself some room at the top. +1000 user pricing can be customized/negotiable. Your company may be in a better position to offer volume discounts. – JeffO Feb 29 '12 at 13:43
I'm a new entrepreneur and the mistake that I made was trying to find a solution that satisfies all of our customers. Thank you very much for the great answer! – Sam Feb 29 '12 at 22:52

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