6 SaaS pricing structure examples: An ultimate guide

Designing the ideal SaaS pricing structure can get complicated without proper guidance.

This guide will discuss different approaches you can take to pricing your SaaS product. We’ll also look at pricing structure examples so it’s easier for you to choose.

Here’s a quick breakdown of what we’ll cover:

• SaaS pricing structures and why they are so important
• An explanation of the most popular SaaS pricing models
• SaaS pricing structure examples
• Key considerations when choosing your SaaS pricing model
• A list of SaaS pricing best practices

Let’s get started.

Understanding SaaS pricing structures

SaaS pricing structures are the models and methods SaaS companies use to charge customers for using their solutions. They define how much customers pay and how often they are billed, whether it's a monthly subscription, annual fee, or based on usage.

Why are these structures so important?

Think of your pricing structure as your company's financial backbone. It affects your bottom line and shapes how potential customers perceive your product.

If you price it too high, you might scare people away. If you price it too low, you might not earn enough revenue to keep the lights on.

A well-thought-out pricing structure can:

• Attract the right customers: It's like a magnet, pulling in those who value your product and are willing to pay for it.
  ‍
• Drive growth: The right pricing model can help your business scale and increase revenue.
  ‍
• Keep customers happy: A transparent and fair pricing structure builds trust and loyalty.

What factors influence SaaS pricing?

There are a few key things that influence how SaaS companies set their prices:

• The product itself: How valuable is it? What features does it offer?
  ‍
• Your target market: Who are you selling to? What's their budget like?
  ‍
• Competition: What are similar products charging?
  ‍
• Your costs: How much does developing and maintaining the software cost you?
  ‍
• Your business goals: Are you aiming for rapid growth or maximizing profit per customer?

6 SaaS pricing models and examples of companies using them

Now that we've covered SaaS pricing structures, let's explore the most popular models. We'll show you how some big-name companies use them to their advantage.

1. Flat-rate pricing

Flat-rate pricing is a model that revolves around offering a single SaaS product with all features for a set price. Customers are usually billed monthly or annually.

Simplicity is the name of the game here. It's easy for customers to understand and makes your revenue predictable. It's also great for building a loyal customer base, as everyone gets the same access and value.

Flat-rate pricing structure example: Basecamp

Basecamp, a project management and team communication platform, uses flat-rate pricing. They offer a plan called Basecamp Pro Unlimited, which costs $299 per month, billed annually. This plan provides unlimited access to all features for an entire organization, regardless of the number of users or usage levels.

This model allows them to focus on delivering a unified product experience without confusing tiers or upsells. Basecamp has been profitable since its inception. Today, it boasts over 3 million accounts, proving that keeping it simple can be incredibly effective.

2. Usage-based pricing

With usage-based pricing, you pay for what you use. It's like using a cloud data platform like Snowflake — the more data it processes and stores, the more you pay. Contrary to metered billing where the quantities or usage are consistent each month, usage-based pricing means you’re paying for individual billable events that can be more variable. This is often a source of confusion, which we clarify in our article on metered billing vs. usage billing.

These individual billable events can go from API calls to the number of transactions processed during a period of time.

Usage-based pricing aligns cost with value, meaning customers only pay for what they use. This can attract budget-conscious customers and those with variable needs. It can also incentivize customers to use your product more, increasing revenue over time.

Usage-based pricing structure example: Amazon Web Services (AWS)

AWS, the cloud computing giant, is a prime example of usage-based pricing. Their vast array of services, from storage to computing power, are charged based on usage.

This allows businesses of all sizes to scale their resources up or down as needed, paying only for what they consume. AWS has become a cornerstone of the modern Internet, demonstrating the power of flexible, usage-based pricing.

3. Tiered pricing

Tiered pricing offers different "packages" at various price points. Each tier typically includes a set of features or usage limits, which is often appealing to different customer segments with varying needs and budgets.

This model allows you to cater to a broader range of customers. You can attract those who only need the basics with a lower-priced tier and upsell power users to higher tiers with more advanced features. It also provides clear upgrade paths for customers as their needs grow.

Tiered pricing structure example: Mailchimp

Mailchimp, the popular email marketing platform, offers a classic tiered pricing model. The free plan is perfect for beginners, and the paid plans offer advanced features like automation, segmentation, and A/B testing.

As businesses grow and their email marketing needs become more sophisticated, they can easily upgrade to a higher tier. This way, users are kept within the Mailchimp ecosystem.

4. Per-user pricing

Each user on your platform is charged a fixed fee, usually monthly or annually. This model is straightforward to understand, especially for team-based tools.

Per-user pricing scales with your customers' businesses. As they grow and add more users, your revenue grows, too. It's also easy to calculate and predict revenue, making it a favorite among SaaS companies.

Per-user pricing structure example: Slack

Slack, the workplace communication platform, charges per user. Its free plan allows for basic communication.

Their paid plans unlock features like unlimited message history, screen sharing, and integrations. The more users a company has on Slack, the more they spend on the product, making it a win-win for both parties.

5. Freemium pricing

Freemium offers a free, basic version of your SaaS product with limited features or usage. To unlock the full power of the software, customers can upgrade to a paid plan.

The free tier acts as a lead magnet. It attracts potential customers and lets them experience your product's value firsthand. It also helps you quickly build a large user base, which can be leveraged for word-of-mouth marketing and upsells.

Freemium pricing structure example: Dropbox

Dropbox, the cloud storage service, has mastered the freemium model. Their free plan offers limited storage space. Paid plans provide more storage and features like file recovery and priority support. This strategy has helped them amass over 700 million users, many of whom eventually upgrade to paid plans.

6. Per-feature pricing

Instead of bundling features into tiers, per-feature pricing lets customers pick and choose. They select the specific features they need and pay for each one individually.

This model gives customers the ultimate flexibility to tailor the product to their needs. It can also lead to higher average revenue per user (ARPU) as customers are more likely to purchase multiple features they find valuable.

Per-feature pricing structure example: Salesforce

Salesforce, the leading CRM platform, offers a wide range of products and features, each with its own price tag. Customers can select the modules they need, such as Sales Cloud, Service Cloud, or Marketing Cloud, and pay for them separately. This modular approach allows them to build a CRM solution that’s tailor-made for them.

How to choose the right pricing model for your SaaS product

Choosing the right pricing model affects everything from customer acquisition to sustained profitability.

Here are some key aspects to consider when choosing the right pricing model for your SaaS:

Carefully assess your product and market

Before you implement a pricing model, you need to ask yourself some critical questions:

• What is your product's value proposition? What problem does it solve for your target customers?
  ‍
• Who is your target market? What are their needs and budgets?
  ‍
• What is the competitive landscape? How are similar products priced?
  ‍
• What are your business goals? Are you aiming for rapid growth or maximizing profit per customer?

By carefully considering these factors, you can clearly understand your product's value and how it fits into the market. This will help you narrow your options and choose the right pricing model.

Make sure to align pricing with customer value

Your pricing should reflect the value that your product delivers to customers. Don't underprice yourself and give away value, but also avoid overpricing and scaring customers away.

Here are some ways to align your pricing with customer value:

• Offer different tiers of service with varying features and prices. This caters to customers with different needs and budgets.
  ‍
• Use usage-based pricing to charge customers based on their actual usage. This can be a good option for products with variable costs.
  ‍
• Offer a free trial or freemium plan. This allows customers to try your product before they buy it, and it can help you attract new customers.

Consider scalability and flexibility

Your pricing model should scale with your business. As you add more features and customers, your pricing should accommodate this growth.

Here are some things to consider for scalability and flexibility:

• Choose a pricing model that is easy to understand and administer. This will make it easier to scale your business and manage your pricing.
  ‍
• Offer flexible billing options. This allows customers to pay for your product in a way that is convenient for them. Think about which payment gateways you’re using and if customers might encounter any issues with them.
  ‍
• Create opportunities for upselling. This is a great way of capitalizing on your customer loyalty. If they’re enjoying your product, there’s a higher chance of them upgrading to a higher tier.

Best practices for SaaS product pricing

To ensure your SaaS pricing strategy is successful, here are some best practices to follow:

• Regularly review and adjust your pricing: As your product and market evolve, your pricing should also evolve. Review your pricing regularly to ensure it's still aligned with your business goals and customer needs.
  ‍
• Monitor competitor pricing: Keep an eye on what your competitors are charging. This will help you guarantee that your pricing is competitive and that you're not leaving money on the table.
  ‍
• Focus on customer satisfaction and retention: Your pricing should be designed to attract new customers and retain existing ones. Offer pricing plans that provide value to your customers and that they are happy to pay for.

Orb: The best tool for managing SaaS pricing

Now that you’ve seen some SaaS pricing structure examples and have a deeper understanding, it's time to take action. The next challenge? Implementing a billing system that can handle the complexities of your chosen model with ease.

That’s where Orb comes into the picture.

Orb is a billing platform designed to handle the intricacies of SaaS pricing. It simplifies every aspect of billing and invoicing, freeing you to focus on the bigger picture.

Here's how Orb helps with SaaS billing:

• Accurate and reliable billing: Orb's meticulous tracking captures every billable event. This guarantees your customers are billed precisely for the value they get.
  ‍
• Effortless scalability: Orb lets you scale your pricing model alongside your business. Our Plan Versioning and Migrations features eliminate the need for complex data migrations.
  ‍
• Granular usage insights: Orb's tracking capabilities transform detailed usage data into actionable insights. It is ideal for services with nuanced usage patterns like API calls or storage.
  ‍
• Better integration: You can connect Orb with your existing data infrastructure natively. This includes but is not limited to data warehouses (like Snowflake) and accounting software (like Netsuite).
  ‍
• Tailored billing metrics: Define your billing metrics to align with how you measure and charge for usage. The result? Fair and transparent pricing. Orb's intuitive interface and custom SQL editor make this a breeze.

Setting up and managing your SaaS pricing is a no-hassle affair with the help of Orb.