The most popular software as a service (SaaS) pricing model is typically what is called "subscription billing". What is recurring billing? Simply put, users pay a subscription fee, month after month, over a certain period of time.
From Licensing to SaaS
All pricing attempts try to emphasize the "value" of product or service we sell.
In other words, you get what you pay for. Low-value products and services will likely cost you less than high-value products and services.
In SaaS, the concept of a per-user pricing model is based on the premise of customers deriving more value if more people use the product or service.
Historically, a lot of on-premise software licensing models worked this way (think the old days of Microsoft).
Every desktop represented a separate user, and a copy of the application which was physically installed was sold as a license. Although many companies still pursue the licensing model path, the IT industry has evolved over time into a SaaS model.
The SaaS model allows a lot of flexibility as it does not require complex installations and updates.
Typically, the process of getting started goes like this: you create a user account (email address) to log in, count the number of users logging in, and calculate the bill.
This is an easy way to go, especially for companies that are under pressure of rapid growth. The next step to learning more about SaaS would be to discover the different SaaS metrics that both executives and managers use to drive business growth and maintain a data-driven culture.
Finally, in order to reap the benefits of subscription billing, it is important to follow some best practices that will put you on course for subscription billing success.
Fusebill is an example of SaaS subscription billing management platform that simplifies and fully automates all your recurring billing. Click on the button bellow to learn more about how Fusebill can help manage your recurring billing.