As a general rule of thumb, businesses should consider flexible subscriptions that help them easily scale as they grow. Businesses change over time and have to quickly adapt to the changing market trends. Regardless of the pricing model you choose, you should be able to upgrade or downgrade your subscription.
The most common pricing models
Per-user pricing is one of the most popular pricing models due to its simplicity. You pay a fixed subscription fee based on the number of users. The per-user cost usually includes all the features and businesses only have to decide on the total number of users.
Tiered pricing is essentially a hybrid pricing model that allows businesses to choose different software packages with varying features and subscription costs.
Features/Functionality based Pricing
Similar to tier-based pricing, the feature-based pricing model allows businesses to choose and pay for features/functionality they need. Costlier subscriptions include more features and integration options and allow users to upgrade their packages as they grow. They might need new solutions to their problems during growth and hence upgrade to the next level. As per the feature pricing model, you’re tying the price directly to the value offered by you to your customers.
Flat Rate Pricing
Flat rate pricing is pretty similar to traditional software licensing i.e. a single software with specific features for a specific price. Although this model has become a rarity these days, it does provide businesses with access to all the features at a fixed price. Basically, the method is based on the “one size fits all” pricing strategy, and you charge your customers the same amount monthly/annually regardless of how many users or their usage is.
Many companies allow businesses to roll their own pricing model in which they can customize the package keeping their unique requirements in mind.
Usage-based pricing model
The usage-based pricing model is also touted as the “pay as you go” model. In this pricing model, the customer is charged based on their usage of the product. If they use more, they’re charged more, and if they use less, they’re charged less. The usage can be charged based on various factors such as the number of Emails being sent, per API, per call, per transaction, etc.
Freemium pricing model
Freemium is a widely adopted pricing model which allows businesses to gain new users and offer them a free but limited version of their product. The idea is to hook users to your product and nudge them later to upgrade to the paid version if they want more advanced or personalized features. In some cases, companies start charging from the second year of subscription.
Also, VYou is constantly evolving and launching new features. VYou offers a FREEmium pricing model during the first year of subscription if developers give extended feedback to keep improving the product and keep growing in the right direction taking into account users’ feedback. If you are interested in this opportunity, please contact us.