Pricing strategy is a major component of any business, whether brick-and-mortar or bits-and-bytes. In addition to being an important strategy to hash out, it is also generally quite tricky to do correctly. Should pricing be value based or cost based? Should it focus on maximizing income per unit or volume? For all of the things our beloved SaaS delivery model does for us, it does not ease pricing strategy pains. I’d even venture to say that it makes pricing strategy even more complicated. After all, SaaS providers pride themselves in allowing tenants to pay a periodic base cost and tack on optional (and potentially intricately priced) bells and whistles. So how should a SaaS offering be priced? Clearly, this is something that should be considered on a case-by-case basis, however, I do feel there is a good framework to work from that focuses on boosting adoption rate and deferring creation of income and healthy margins to a path of least resistance.
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