Ask HN: SaaS prcing. Why not charge the little guy?

3 pointsp0d2y ago7 comments

I wonder why Saas pricing models do not often charge the little guy? I am not a business and I am not a team. I will not make the leap to business prices but I would put my hand in my pocket for more features (which are probably already there) as an individual.

7 comments

7 comments · 5 top-level

leandot2y ago· 2 in thread

Because it's not worth the support and complaints. A business account paying $$$ is more likely to see the benefit and the money goes out from preallocated budget.

p0dOP2y ago

Your comment made me wonder if this is the reason a lot of software is a nigthmare. As in, workers will put up with something if they are mandated to but individuals will not.

The analogy in my head is the most excellent little bespoke bun shop I go to every week with my wife which is awesome. Compared to buns made for the masses in the supermarket.

Maybe there is a market for craft software as in craft beer :-)

jjice2y ago

Anecdotally, I've seen at the SaaS companies I've worked at that the larger customers are often a way better ratio of revenue to support time and easier to work with.

Not that smaller customers are bad, but the ROI isn't as good. I've found that they're much more relaxed and easy to work with compared to working with other startups. The other startups I've worked with on deals often have shorter timelines and the person you're talking to is either a founder or early employee and has way more stake in this transaction that a manager at a larger company does.

giorgioz2y ago

Depending on the product and the go to market strategy offering a free plan can allow users to try the product and then start to use it daily and eventually switch up to a paid plan. As an example, Adobe offers a 60% for students and teachers: https://www.adobe.com/creativecloud/buy/students.html Students tend to have little money and they would either use another free tool or pirate Adobe anyway. So offering the product for free to someone that can't afford it now might turn into profit later when they are used to your software and they convert to a paid plan.

muzani2y ago

They still likely make less than 20% of the revenue, maybe even less than 5%. They're not going to get rich off it. Besides, charging people isn't free, there are now much higher expectations and responsibilities on customer support.

In my experience, the customer that brings in the least money also makes up for most of the work. It's a larger percentage of their budget. For a Fortune 500, your fees could well be a rounding error. These small guys are also the ones who would go out and post bad reviews, demand the most features, demand the most uptime and the fastest response times.

nicbou2y ago

People try it at home for their hobby projects, then convince their employer to pay for it at the office. It reduces the cost of trying and adopting the product, and the need to pay only comes once you're familiar with the product and invested in it.

Free users also have lower expectations. Low-paying users might not be worth the hassle. If you sell candy by the hundreds of kilograms it's better to give free samples than to sell little bags.

shivc2y ago

I guess this would depend on the users. Canva is a great example of that. The freemium model gives most of what average users would need then comes the small pricing band because they can add a bit more value and then the team plan.

The point being how big of a workflow advantage someone would have from a paid account and their business goals based on that.

Adobe suite is a great example - student pricing, normal pricing, teacher pricing etc etc.

j / k navigate · click thread line to collapse