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Price is one of the most important factors when it comes to SaaS usage. However, it can be tricky to choose a pricing model that brings value to users and benefits the company over time. Quite often, the business evolves through the years and what worked before, may no longer work now. Companies that find themselves in this situation face a tough dilemma: change the pricing model, with all that that entails, or stick to an outdated one? Let's take a look at Bubble.io's case to draw some conclusions.
In 2019, the company Bubble.io announced that it would be increasing its prices for its no-code tool. Although many companies adjust prices now and then to reflect inflation, this change was very sharp. In fact, the initial plan went from $16 to $29 (a 80% increase) a steep climb for many users who were just starting out or developing applications with a small budget. The move came as a surprise to many users of the platform, that were not informed beforehand and had been paying relatively low fees for access to the tool. Although Bubble.io's decision to increase prices was met with widespread criticism from users and industry experts alike, the dust settled. Even if the price increase was quite pronounced, it’s an everyday occurrence. Companies change prices from time to time to adjust to inflation, supply and demand.
In March 2022, Bubble.io announced its intention to introduce more changes in its pricing . This time, however, it wasn’t just a simple increase: it was a complete rework of the entire pricing model. While the initial model used to set the price according to the capacity of the application created, the new pricing model intends to limit the application's unique visitors and items in the database. Going from unlimited visitors and data items to extremely low limits in the first paid tiers is a dramatic change, which pulled the rug out from under a lot of users.
For a data-driven platform like Bubble.io, these changes are a big disruption. The pricing model that thousands of people and businesses had relied on completely for years was to evolve into something totally new in an unforeseen way. Users energetically expressed their discontent on online forums and social networks. Because of that, Bubble.io announced a halt to their pricing changes, at least for the time being.
Although it looks like the community has been heard and the Bubble.io team is pivoting their position, is the damage already done? Many users have lost confidence in the no-code platform and fear that this change will be paused for now, but enforced again in a few years. It's difficult to predict the impact this will have on Bubble.io, but people are already looking for alternatives and actively switching to other no-code platforms.
When a company sets a pricing model for its product or service, it's not just trying to make money; it's also trying to reflect how much value their product provides and how much people are willing to pay for it. This is especially important in the world of SaaS, where companies often rely on subscription revenue to support their operations. When prices go up, some customers may decide that they no longer want or need the product. But when the entire pricing model is reformulated, the company will certainly lose credibility, which could lead to a decline in subscribers and even an eventual decline in revenue. Therefore, deciding which pricing model to follow and sticking to it is essential.
When it comes to the best pricing strategy for a SaaS, there is no right answer. Some companies may base their pricing on a flat rate, others may choose a tiered model, others may charge based on application usage or per active user... The truth is, as a SaaS company, you need to understand the value of your product and always act in the best interest of your users. Being committed to a clear pricing system that users can trust and maintaining clear communication in the event of a price change is the best way to retain users and attract many more. This is why Triggre has a pay-as-you-go model that is based on actions: tangible and consistent metrics that help users accurately predict the budget needed. In fact, we give users detailed action usage graphs so they can adjust their plan accordingly and allow them to plan for the future. Learn more about our pricing model here.
Regardless of price fluctuations, in the case of SaaS a sudden change in the pricing model may lead to a decline in user adoption and revenue, as well as decreased customer satisfaction. The best way to avoid this is to have a clear, reliable pricing policy from the beginning, that helps users forecast their budget and takes into account the value of the product.
