Welcome to the world of SaaS pricing, where we will explore how companies decide on the prices for their digital tools. It's like finding the secret recipe to success in the software world.

Understanding how other companies set their prices can be super helpful for you. It's like getting insider knowledge to guide your decisions if you're running a business.

So, whether you're new to this or a seasoned pro, stick around to discover the art and science of getting SaaS product pricing done right in the Software-as-a-service world. Ready for the journey? Let's dive in!

10 SaaS Pricing Model Examples 

1. Drift 

Drift is a smart platform that uses artificial intelligence to understand and learn from buyers, creating personalized experiences. Now, when we look at its pricing option, it follows a value-based approach.

There are three pricing plans: Premium, Advanced, and Enterprise. Premium is great for small businesses, offering valuable features for better customer engagement.

On the other hand, Advanced and Enterprise plans provide custom pricing, meeting diverse business needs. Drift's tiered pricing ensures a personalized and scalable approach, catering to different-sized businesses.

Drift understands users' varied needs. Whether you're a marketer, sales professional, or part of a big enterprise, you can choose a plan that suits your usage requirements. This flexibility is handy for companies seeking basic features, allowing them to pick an option that fits their needs.

Drift-pricing-plan

Must-know points about Value-Based Model

  • Pricing based on the value delivered allows businesses to capture some of the economic value created for customers. This can result in higher profit margins compared to cost-based or competitive pricing.
  • On the downside, there is a risk of misjudging the perceived value and setting prices either too high, leading to customer resistance, or too low, leaving potential revenue untapped. Thus, being smart is the only option in such cases.

2. HubSpot

HubSpot uses freemium pricing model, a popular strategy in the B2B SaaS industry. This means they provide a basic version of their product for free, without the need for direct sales interactions or demos. The idea is to attract users with the free version and encourage them to subscribe for full features later.

With this SaaS pricing strategy, users can sign up for a trial with a simple process. This allows potential customers to try the product before deciding to buy. But, it avoids issues like users staying on the free plan, which can be challenging for businesses.

Must-know points about Freemium Model

  • Freemium models are great for attracting customers with their free version that converts users into paying subscribers.
  • One downside of this plan is that providing free access can strain resources without a guaranteed return, and users might be dissatisfied if they don't get essential resources like bug fixes and customer support.

3. Canva

Canva uses a pay-per-user pricing model, making costs simple and predictable for users. This model lets users trial the service with a couple of users before making a bigger investment, ensuring transparency in expenses.

Charging per user ensures a steady income for Canva, as users usually renew their subscriptions each month without much extra effort. However, managing seat licenses becomes crucial to avoid unnecessary charges under this pricing approach.

Canva's $30 per month pay-per-user option provides access to all Pro features for every paid user on the graphics or marketing team. This pricing suits both individual designers and larger businesses forming teams, offering a straightforward and value-based cost structure.

Canva-Pricing-Page

Must-know points about the Pay-Per-User Pricing Model

  • The simplicity of the pay-per-user model stands out as a significant advantage. Users can calculate monthly expenses, and revenue grows with user adoption, creating a clear link between the number of users and income.
  • This aligns well with the recurring revenue model, which is crucial for SaaS companies, ensuring monthly income predictability.
  • Some downsides include the potential for higher costs as user numbers increase and the risk of user resistance to additional charges.

4. Wix

Wix has a smart pricing plan – a mix of tiered and usage-based SaaS pricing models. This means they let users try all the features in their plans, setting limits that nudge them to upgrade when they use them a lot.

Like many SaaS companies, Wix tracks how much users use features like Storage Spaces and Video Hours. When users get close to these limits, they're more likely to upgrade, following the plan's design to help users grow.

wix-pricing-plan

Must-know points about Tiered and Usage-based Pricing Model

  • In this model, the tiers have more and more features. So, when customers move up a tier, they get higher limits and cooler features. This gives users a reason to upgrade.

5. Ixact Contact

IXACT Contact keeps it simple with a flat-rate pricing model. Everyone pays the same fixed rate, no matter how much they use it or what features they need. This kind of pricing works well for SaaS businesses with just one product and a steady group of customers.

With IXACT Contact, you get a clear price and even a free trial. The flat-rate model makes it easy for customers to know exactly what they're paying for.

Must-know points about the Flat Rate Pricing Model

  • As this is a fixed pricing, businesses might try different prices to determine what works best. It's like a trial-and-error process to find the right price that customers are comfortable with.
  • The clear structure helps customers understand the cost, and it's great for predicting expenses since it uses recurring billing. This pricing is especially good for new businesses with a main product.
  • There is one downside too, flat rate pricing may not always reflect the perceived value of the service for different customer segments. Some customers may feel they are not getting sufficient value for the fixed price.

6. Appcues

AppCues keeps it simple with a tiered + active user pricing strategy, blending the best of both worlds. Their platform, which needs no coding, creates engaging product onboarding experiences and allows users to track and understand usage data.

AppCues has three tiers for small businesses, high-growth companies, and enterprises, perfect for different stages of a company's growth, ensuring flexibility and scalability.

Let's break down their pricing. The plans are straightforward, reflecting the value they offer. Starting at $249/month, each tier is designed for different customer segments or business sizes. This tailored approach means users get varying features, functionalities, and support based on their specific needs.

Now, here's where it gets interesting. AppCues follows the traditional tiered structure and factors in active users. This means the number of monthly active users influences the cost of the service.

This way, AppCues ensures a fair and value-driven cost structure catering to businesses of all sizes.

Must-know points about the Tiered + Active User Pricing Model

  • It's a flexible and scalable approach, letting customers choose a tier that fits their business, and the pricing adjusts based on the active user count.
  • Businesses are incentivized to keep users active and involved, creating a win-win situation where the platform's success is tied to user activity.

7. Mailchimp

Mailchimp, the email marketing and automation tool, has a unique way of charging you based on how often you send emails. It's great if you don't send emails all the time.

You use a certain number of credits for each email you send and only pay for what you use. This flexibility lets you buy credits when needed, making it a customized and cost-effective choice. 

Even though Mailchimp has other ways to pay, the pay-as-you-go or usage-based option is special for its adaptability. It suits people who don't send many emails, ensuring they only pay for the credits they use. This payment method is practical and efficient for those who don't email too often.

Mailchimp also has a free plan for up to 500 contacts and allows 2,500 sends every month. This free plan is a great way to get started, letting you explore what Mailchimp can do without spending money immediately.

With Mailchimp's type of pricing, you can control your email marketing costs based on how you use it and what you need. 

limited-time-offer-on-pricing-mailchimp-conversion

Must-know points about the Pay-as-you-go Pricing Model

  • Customers might find it challenging to predict monthly expenses, leading to budgetary uncertainty. This can make it difficult for businesses to attract and retain customers who prefer fixed, predictable costs.
  • The model provides flexibility as customers can scale their usage up or down according to their needs. This adaptability is advantageous for businesses with dynamic requirements.

8. Chartmogul

ChartMogul's way of charging keeps things easy and works for businesses with subscriptions. Businesses pay based on how big and successful their subscription is.

ChartMogul is fantastic because of its real-time insights into financial performance, thanks to how they charge. By basing the cost on recurring revenue, businesses get timely information to make quick decisions and adapt to changes in the market. It's like having a financial guide to help you navigate the world of subscriptions. 

What makes this way of charging great is how much it covers. ChartMogul doesn't focus on the basics; it looks at a lot of important things for subscription model businesses.

It's like having a toolbox full of tools to understand and make subscriptions work better. This makes ChartMogul a reliable friend for businesses that want to do well in the world of subscriptions. 

Must-know points about the Recurring Revenue Based Pricing Model

  • Businesses get a lot of information, from how much money comes in every month to how many customers stay and how much they're worth. 

9. Gusto

Gusto adopts a per-employee pricing or per-user pricing model for its payroll software, presenting businesses with tailored plans to suit their individual requirements.

The structure comprises three main plans: Simple, Plus, and Premium, along with a subscription-free plan for businesses employing contractors.

The Simple Plan costs $40 per month, with an extra $6 per employee. Moving up, the Plus Plan is priced at $80 per month, accompanied by a $12 per employee fee. Gusto offers a Premium Plan with custom pricing for businesses with unique needs.

The decision to employ per-employee pricing is rooted in its advantages for businesses:

Cost Control: This model allows businesses to scale costs with workforce changes. Thus, offering flexibility in budgeting.

Fairness: It aligns with the principle of proportional payment. Thus, it ensures businesses pay based on actual usage.

Feature-Rich Plans: Gusto's plans, even at the basic level, provide a robust set of features, accommodating diverse business sizes.

Transparency and Predictability: Per-employee pricing brings transparency and predictability to payroll costs, simplifying budget management.

In essence, Gusto's per-employee pricing model offers businesses a fair, flexible, and feature-rich solution. Thus, enhancing transparency and customization in payroll management.

Must-know points about the Recurring Revenue Based Pricing Model

  • Businesses get a lot of information, from how much money comes in every month to how many customers stay and how much they're worth. 

10. Loom 

Loom has done really well by using a smart tiered pricing model that helps all kinds of customers. This way, they can grow, show their value, and make customers stick around.

They even have a free Starter plan, so it's easy for businesses to start and change to different plans as they need more. Loom's clear prices, smart way of making money, and focus on what customers need to make it really attractive.

With three plans – Starter, Business, and Enterprise – Loom ensures everyone gets what they need. This way, each plan gives a lot of value and options. Their pricing plan is great for businesses at different points of growth.

Must-know points about the Tiered Based Pricing Model

  • Lower-tier plans provide an accessible entry point for customers who may be testing the waters or have limited budget constraints. This encourages initial adoption and facilitates upselling over time.

Ready to take inspiration from the best SaaS Companies?

In summing up our look into the best pricing methods, it's clear that the world of (SaaS) is as varied as the businesses it supports.

From straightforward subscription plans to the smart appeal of freemium and adaptable tiers, there's the right pricing style for every situation.

As companies journey through the SaaS landscape, the main point is evident. It is that getting pricing right is a strong force, connecting customer expectations with excellent service and ensuring that every piece of software is worth it.

Which model example can be the best for your SaaS business? Tell us in the comments.

Apart from this, if you need assistance to boost your SaaS business, from building a website to optimizing it for search engines to do marketing, contact webdew.

Recommended Reads

SaaS Conversion Rates 101: Maximizing Conversions for Business Growth

SaaS Customer Acquisition Cost 101: Driving growth in 2024 and beyond

Frequently Asked Questions

Software as a Service (SaaS) pricing models refer to the strategies and structures that SaaS companies use to determine the cost of their services. These different pricing models vary and can include approaches like subscription-based, usage-based, freemium, and tiered pricing, each tailored to meet different business needs and customer preferences.

SaaS companies decide pricing based on a combination of factors such as the value delivered, market demand, competition, features offered, and the overall cost of service provision. Pricing decisions often involve a balance between capturing market share, maximizing revenue, and ensuring customer satisfaction.

Value-based pricing in SaaS revolves around determining the worth of the software to the customer. This model focuses on aligning the price with the perceived value of the service, emphasizing the benefits and outcomes it provides. SaaS companies employing value-based pricing aim to reflect the value customers receive in their pricing structures.

Various types of popular SaaS pricing models exist in the SaaS landscape. Subscription-based models involve regular payments for continuous access. Freemium models offer basic services for free, with premium features at an additional cost. Usage-based pricing models charge according to the extent of usage, and tiered models provide different packages with increasing features at different price points. Each type of SaaS pricing model serves specific business strategies and customer preferences.