MSPs


GETTING YOUR SAAS PRICING STRATEGY RIGHT IN 2024


As businesses continue to scrutinise expenditures and seek cost- savings where possible, SaaS products are increasingly coming under pressure to adapt their pricing to make them feasible investments for companies. Demed L’Her, CTO at DigitalRoute explains how to tackle the issue.


A


s a regular, oſten monthly cost for businesses, SaaS subscriptions can be one of the first places the finance team looks to save some money.


With that in mind, SaaS sellers have a choice. Do they continue


with their existing fixed subscription model, or do they transition to a more flexible model where customers pay for the value they gain? Off-the-shelf billing platforms, whose expertise is in billing, weren’t


built for enriching data for usage-based revenue. Tey were built for simple billing tasks for businesses that offer one-off sales, perpetual licenses, and flat fee subscriptions. Don’t get me wrong. Tey are still


38 | March/April 2024


indispensable as they need to generate the final invoices for your customers and partners, but they don’t oſten communicate with other systems to unlock the full value of usage data. From a business perspective, subscriber loss is not the only issue


facing SaaS models. Revenue leakage is also proving problematic. Due to the nature of subscription billing models, there is a constant risk that users will share accounts beyond the limits of their agreement. According to research, 42% of companies experience revenue leakage with every company losing 1% to 5% of realised EBITA to leakage annually.


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