B2C SaaS, anyone doing a 1-time charge?
I’m getting close to the point of enforcing licensing on my BrainTool browser extension.
I’ve received comments (from early adopters and [1]) that some people will only consider one time pricing, not monthly or annual subscriptions. I’d love to get some thoughts from this group.
My current model is a 1:10 ratio for monthly to yearly pricing ($4/mo or $40/yr). I’m considering adding one or both of the following:
- 1:10:25 pricing, whereby a lifetime subscription option is 25 times the monthly sub (in this case $100)
- Stop paying the sub at any time, you no longer get updates or support but keep access to the version you are on.
BrainTool is Freemium, open source (the free version will always be, not sure about paid features), and gives you full access to your data in plain text format. I want to compete on features and utility, not lock in. You can see the current pricing page here: https://braintool.org/pricing
Is 1:10:25 the right ratio? Does ongoing access to your paid up version alleviate the need for a one-time price?
Hi Tony,
I’m normally one of those people who never does subscriptions. You’ve pretty much considered all the options:
Personally, I like the last option. May also depend on your churn and hosting costs.
I think that $100 is kinda expensive though, especially since you just posted v1. There is still a risk in a lifetime license that you may never complete the roadmap features I care about or that you may just quit at some point. I can see it eventually reaching that value, but I’m not sure if it’s there today. You can always try it and see whether it works at that price point.
While the utility may be there, I think you are lacking in design and quite frankly it feels a bit rough. Though, that may not matter if your target audience is developers.
P.S.
Usually the org option is subscription only.
Thanks @fromtheexchange for the input and pointers. I agree with everything you are saying, including the rough edges (and am talking to some designer friends).
While $4/40 seems reasonable to me for my planned 1.0, and in line with competitors (subset of my list in the response below), $100 does seem too high, and maybe @Soft_Re has a point that it just complicates things.
@tconfrey It is more complicated. But, remember:
Simply put, I will never use your product if you don’t have one of those three options (versions, year of updates, or lifetime). I just have subscription fatigue—I won’t even consider it.
But, I’m glad you’re going to polish the design. I’m glad you’re asking about pricing feedback. I’m glad the data is exportable. Keep it up!
Also, I read your profile:
I’m curious to learn more about your story
Thanks, and Will Do!
I have some background on the BrainTool Blog.
In summary after a few years happily coding in my early career I started managing teams in my 20s and then spent a couple of decades leading software development organizations, most recently in Healthcare at athenahealth. There was a buy out when they went private and I decided to try to build something myself. I explored a bunch of stuff in the healthcare/ML space (so rich in potential RN BTW) but personal knowledge management was my long term passion project so I also built BrainTool on the side. When it started to take off (a bit) I decided to go all in.
So here I am in my 50s coding, and trying to get the word out on this thing!
That’s really cool @tconfrey! Glad to see you’re already finding success—awesome
I’m at a very similar crossroads. My main client was acquired by a private equity firm. I’m trying to decide whether to go all-in on my long-term passion project or another full-time job.
What was the determining factor in making the jump? Do you have any advice or considerations for me?
Good luck with your journey!
For me the determining factor was that my kids were thru college and, with the payout, financially I could afford to take the risk. I'm still very far from the risk paying off, and my runway is getting shorter, but I'm enjoying not having a boss, not being a boss and getting back to the craft of software.
Hi Tony,
A few thoughts
Thanks @Soft_Re. I agree with your point on keeping it simple. I am seeing most of the competitors in my space being SaaS with freemium subscription pricing (see my list below) which is somewhat confusing given the feedback I'm getting from customers that they want a one-time price. Maybe the products below are missing out on all the customers put off by the subscription?!
My costs are solely the opportunity cost of my time invested. I'd like to get to 10K subs @$40/yr but would be even happier w 100K subs at $4/yr!
Hi Tony,
I’m wondering if you have tested your LTV for your customer base. For an LTD you normally want a 10-25% discount on your LTV times the subscription.
Let’s say
**(10 months LTV subscription price) 0.9= LTD price
What payment gateway have you used for your Billing? Stripe? Paddle?
Hi @kod, maybe I shouldn't admit it, but I don't know what LTV and LTD are in this context!
I'm using Stripe for payments. BrainTool is entirely static code served from github so I have a minimal Firebase setup which creates an anonymous account to interact w Stripe and hold the subscription info.
LTV is Life time value
LTD is Life Time Deal (what you referred as life time subscription)
I get what you’ve done there with Stripe.
Are you having advanced workflows in your billing yet? Like upgrading, downgrading, changing credentials, automating receipts/invoices and taxes?
Is that something interesting at this point?
On the one time charge, I would regard a price that corresponds to 10-12 months run rate from a single customer. So you actually receive cash flow for a year.
Thanks @Kod! I'm not doing anything complicated on billing RN, hopefully don't need to for a while! (I just glanced at PriceWell and definitely would have explored further if I'd seen it in advance of rolling my own.)
My current model for monthly vs annual billing is the annual sub is 10x the monthly. That seems pretty common, so when you suggest 10x monthly for lifetime access it seems low. OTOH I am hearing that my 25x proposal is high, so maybe I need a middle ground!
Thought you were offering a monthly sub and a lifetime deal. I think for the yearly sub you should give one month off. So 11x your monthly(month included). Got mixed up here, apologies 🤗
Alternatively, if your product is used mainly for an extensive period of time, increasing your monthly sub and giving it at 10x on the annual can be proven quite effective too.
ughh, it's a pity! Maybe you can check PriceWell on your next project. Would be glad to help you on that 😃