Passcreator/Fobi SaaS PricingWe have many posters pointing out how little Fobi is making from some of these 'large' contracts like the one with Allianz. These posters are correct that the revenue being generated from these contracts is relatively small but there is nothing wrong with what Fobi charges for its services.
For companies providing Software as a Service(SaaS) finding the right pricing strategy is critical to their future success. The main objective of a successful SaaS pricing strategy shoud never be signing a few blockbuster deals that will a lot of money from a few large customers for a few years but to achieve recurring revenues from these customers.
A search in Google will provide multiple articleas about seeting up the SaaS pricing strategy for a company including objectives, pros, cons for each strategy.
These strategies include the following:
- Flat-rate pricing
- Usage-based pricing
- Tiered pricing
- Per-user pricing
- Per-active-user pricing
- Per-feature pricing
- Freemium pricing
In the case of Fobi we might be using some of these models and/or a combination of them. IMO, Fobi is generating enough revenue from these contracts. Keep in mind that some of these contracts were inherited when Fobi bought Passcreator (like the one for Allianz). The main bebefits of current pricing strategy come from (pulled from one of the links below for Freemium model even if this is not the one used by Fobi):
- It's a foot in the door. Initial adoption is one of the biggest challenges facing a SaaS business, and the freemium model makes it as easy as possible for customers to get started with your product.
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Viral potential. With such low barriers to use come significant viral potential: companies like Dropbox grew so rapidly because of user referrals, as their existing users passed on the product to friends and colleagues.
The other fact that we need to look at is the cost/effort that it takes for a SaaS company to gain and setup a customer vs what it takes to maintain and serve these customers after the initial setup is done. Keep in mind that getting a new customer is often the most expensive/hard part on many business relationships. This is not different for SaaS companies.
In the case of software in addition to getting new customers the next biggest expense is the education/trining of these customers on the usage of your software. Once you have these companies and their employees/clients hooked into using your software you have not only overcome your biggest expenses as a SaaS company but also got a good chance that these customer will not go to another company offering a similar service.
As a software user ask yourself what it will take for you to change any of the many applications that you use on a daily basis (your browser, spreadsheet, word processor, etc? will you change them for anything else providing similar capabilities?
Some links in case you want to read about SaaS pricing strategies:
https://www.cobloom.com/blog/saas-pricing-models https://www.paddle.com/resources/saas-pricing-models https://blog.hubspot.com/sales/price-saas-product